Form 10-Q DYAX CORP For: Sep 30

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November 6, 2015 4:04 PM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2015

Or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission File No. 000-24537

DYAX CORP.

(Exact Name of Registrant as Specified in its Charter)



Delaware		04-3053198
(State of Incorporation)		(I.R.S. Employer Identification Number)

55 Network Drive, Burlington, MA 01803

(Address of Principal Executive Offices)

(617) 225-2500

(Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ý NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on it corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

YES ý NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "accelerated filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO ý

Number of shares outstanding of Dyax Corp.’s Common Stock, par value $0.01, as of October 30, 2015: 147,128,033

DYAX CORP.

TABLE OF CONTENTS



			Page
PART I		FINANCIAL INFORMATION	3

Item 1	-	Financial Statements	3

		Condensed Balance Sheets (Unaudited) as of September 30, 2015 and December 31, 2014	3

		Condensed Statements of Operations and Comprehensive Loss (Unaudited) for the three and nine months ended September 30, 2015 and 2014	4

		Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2015 and 2014	5

		Notes to Condensed Financial Statements (Unaudited)	6

Item 2	-	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3	-	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4	-	Controls and Procedures	39

PART II		OTHER INFORMATION	40

Item 1A	-	Risk Factors	40

Item 5	-	Other Information	58

Item 6	-	Exhibits	58

Signatures			61

Exhibit Index			62

PART I – FINANCIAL INFORMATION

Item 1 – FINANCIAL STATEMENTS

Dyax Corp.

Condensed Balance Sheets (Unaudited)



	September 30, 2015			December 31, 2014
	(In thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	116,687		$	19,392
Short-term investments	191,698			165,260
Accounts receivable, net	13,178			12,221
Inventory	4,771			4,504
Other current assets	6,324			7,053
Total current assets	332,658			208,430
Fixed assets, net	5,213			4,631
Restricted cash	1,100			1,100
Other assets	9,948			2,972
Total assets	$	348,919		$	217,133
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	24,799		$	17,373
Current portion of deferred revenue	3,743			3,373
Other current liabilities	—			1,159
Total current liabilities	28,542			21,905
Deferred revenue	3,115			4,201
Notes payable	—			82,165
Deferred rent and other long-term liabilities	2,793			3,059
Total liabilities	34,450			111,330
Commitments and contingencies	—			—
Stockholders' equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	—			—
Common stock, $0.01 par value; 200,000,000 shares authorized; 147,122,377 and 136,662,175 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	1,471			1,367
Additional paid-in capital	886,140			650,249
Accumulated deficit	(573,224		)	(545,841		)
Accumulated other comprehensive income	82			28
Total stockholders' equity	314,469			105,803
Total liabilities and stockholders' equity	$	348,919		$	217,133

The accompanying notes are an integral part of the unaudited condensed financial statements.

Dyax Corp.

Condensed Statements of Operations and Comprehensive Loss (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands, except share and per share data)
Revenues:
Product sales, net	$	17,807		$	20,274		$	51,580		$	49,363
Development and license fees	1,362			1,035			6,622			5,648
Royalty revenue	5,560			684			13,318			684
Total revenues, net	24,729			21,993			71,520			55,695

Costs and expenses:
Cost of product sales	784			1,393			4,303			3,153
Cost of royalty revenue	2,780			342			6,659			342
Research and development expenses	15,624			8,268			40,376			23,593
Selling, general and administrative expenses	14,033			10,132			39,227			30,186
Total costs and expenses	33,221			20,135			90,565			57,274
Income (loss) from operations	(8,492		)	1,858			(19,045		)	(1,579		)

Other income (expense):
Interest and other income	217			81			508			192
Interest and other expenses	(3,426		)	(2,755		)	(8,846		)	(8,201		)
Total other expense, net	(3,209		)	(2,674		)	(8,338		)	(8,009		)
Net loss	(11,701		)	(816		)	(27,383		)	(9,588		)

Other comprehensive income:
Unrealized gain on investments	58			33			54			123
Comprehensive loss	$	(11,643	)	$	(783	)	$	(27,329	)	$	(9,465	)

Basic and diluted net loss per share	$	(0.08	)	$	(0.01	)	$	(0.19	)	$	(0.07	)
Shares used in computing basic and diluted net loss per share	146,793,249			136,282,842			142,814,337			132,301,051

The accompanying notes are an integral part of the unaudited condensed financial statements.

Dyax Corp.

Condensed Statements of Cash Flows (Unaudited)



	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Cash flows from operating activities:
Net loss	$	(27,383	)	$	(9,588	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of purchased premium/discount	795			455
Depreciation of fixed assets	745			642
Non-cash interest expense	—			487
Compensation expenses associated with stock-based compensation plans	13,595			5,294
Changes in operating assets and liabilities:
Accounts receivable	(450		)	991
Other current assets	2,956			(2,881		)
Inventory	(7,201		)	1,078
Accounts payable and accrued expenses	4,037			232
Deferred revenue	(1,224		)	(1,492		)
Other	(190		)	35
Payment related to discounts and interest converted to principal	(6,450		)	—
Net cash used in operating activities	(20,770		)	(4,747		)
Cash flows from investing activities:
Purchase of investments	(236,160		)	(114,573		)
Proceeds from sale and maturity of investments	208,982			2,000
Purchase of fixed assets	(1,325		)	(420		)
Net cash used in investing activities	(28,503		)	(112,993		)
Cash flows from financing activities:
Gross proceeds from common stock offering	229,770			85,100
Fees associated with common stock offering	(14,019		)	(5,392		)
Repayment of long-term obligations	(75,715		)	(931		)
Proceeds from the issuance of common stock under employee stock purchase plan and exercise of stock options	6,532			3,218
Net cash provided by financing activities	146,568			81,995
Net increase (decrease) in cash and cash equivalents	97,295			(35,745		)
Cash and cash equivalents at beginning of the period	19,392			68,085
Cash and cash equivalents at end of the period	$	116,687		$	32,340
Supplemental disclosure of cash flow information:
Interest paid	$	7,687		$	7,878

The accompanying notes are an integral part of the unaudited condensed financial statements.

DYAX CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. BUSINESS OVERVIEW

Dyax Corp. (“Dyax” or the “Company”) is a biopharmaceutical company developing and commercializing therapies to address orphan diseases. The Company's current areas of focus include:


•	Hereditary Angioedema

The Company develops and commercializes treatments for hereditary angioedema (HAE). The Company discovered and developed KALBITOR^® (ecallantide), a plasma kallikrein inhibitor, and is selling it in the United States for the treatment of acute attacks of HAE. Additionally, the Company discovered and is developing DX-2930, a fully human monoclonal antibody inhibitor of plasma kallikrein, which is an investigational product candidate to treat HAE prophylactically. The Company has also developed a biomarker assay that detects the activation of plasma kallikrein in patient blood and is using this assay to expedite the development of DX-2930.


•	Pipeline Development Programs

The Company is expanding upon its expertise in the plasma kallikrein pathway and has an evolving pipeline of fully human monoclonal antibody drug candidates that the Company believes have the potential to address various orphan diseases. These drug candidates include:

•DX-2930 for diabetic macular edema (DME)

•DX-2507 for antibody-mediated autoimmune diseases

•DX-4012 for anti-thrombotic therapy


•	Licensing and Funded Research Portfolio (LFRP)

The Company has a portfolio of product candidates being developed by licensees based on its phage display technology. This portfolio currently includes one approved product, CYRAMZA^® (ramucirumab) marketed by Eli Lilly & Company (Lilly), and multiple product candidates in various stages of clinical development for which the Company is eligible to receive future royalties and/or milestone payments.

On November 2, 2015, the Company entered into an Agreement and Plan of Merger pursuant to which Dyax would become a wholly owned subsidiary of Shire plc. See Note 11, Subsequent Event, and the description of the merger agreement included under the heading “Business Overview-Merger Agreement” in Item 2 below.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. It is management’s opinion that the accompanying unaudited interim condensed financial statements reflect all adjustments (which are normal and recurring) necessary for a fair statement of the results for the interim periods. The financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying December 31, 2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the dates of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

Basis of Consolidation

The accompanying financial statements for the three and nine months ended September 30, 2014 include the accounts of the Company and the Company's European subsidiaries Dyax S.A., Dyax BV and Dyax Holdings B.V. In 2014, Dyax S.A. and

Dyax BV were dissolved and during the nine months ended September 30, 2015, Dyax Holdings B.V. was dissolved. All inter-company accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The significant estimates and assumptions in these financial statements include revenue recognition, product sales allowances, effective interest rate calculation, useful lives with respect to long-lived assets, valuation of stock options, accrued expenses and tax valuation reserves. Actual results could differ from those estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments and trade accounts receivable. At September 30, 2015 and December 31, 2014, approximately 97% and 98%, respectively, of the Company's cash, cash equivalents and short-term investments were invested in money market funds backed by U.S. Treasury obligations, U.S. Treasury notes and bills, and obligations of United States government agencies held by one financial institution. The Company maintains balances in various operating accounts in excess of federally insured limits.

The Company provides most of its services and licenses its technology to pharmaceutical and biomedical companies worldwide, and makes all product sales to its distributors. Concentrations of credit risk with respect to trade receivable balances associated with the Company’s development and license fee revenue are usually limited, due to the diverse number of licensees and collaborators comprising the Company's customer base. Trade receivable balances associated with the Company’s product sales are comprised of a few customers, due to the Company’s limited distribution network. The Company conducts ongoing credit evaluations of its customers. As of September 30, 2015, three companies accounted for 76% of the receivable balance: 47% (Lilly), 15% (Walgreens) and 14% (Prodigy) of the accounts receivable balance. The balance due from Lilly includes $5.6 million in unbilled accounts receivable related to estimated royalties earned during the quarter ended September 30, 2015. As of December 31, 2014, three companies accounted for 68% of the accounts receivable balance: 27% (Lilly), 21% (US Bioservices) and 20% (Walgreens) of the accounts receivable balance.

Cash and Cash Equivalents

All highly liquid investments purchased with an original maturity of ninety days or less are considered to be cash equivalents. Cash and cash equivalents consist principally of cash, money market and U.S. Treasury funds.

Investments

Short-term investments primarily consist of investments with original maturities greater than ninety days and remaining maturities less than one year at period end. The Company has also classified its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company considers its portfolio of investments as available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices.

Inventories

Inventories are stated at the lower of cost or market with cost determined under the first-in, first-out, or FIFO, basis. The Company evaluates inventory levels and would write-down inventory that is expected to expire prior to being sold, inventory that has a cost basis in excess of its expected net realizable value, inventory in excess of expected sales requirements, or inventory that fails to meet commercial sale specifications, through a charge to cost of product sales. Included in the cost of inventory are capitalized employee stock-based compensation costs for those employees dedicated to manufacturing efforts. Inventory on-hand that will be sold beyond the Company's normal operating cycle is classified as non-current and grouped with other assets on the Company's condensed balance sheet.

Inventories consist principally of raw materials and work-in-process. In certain circumstances, the Company will make advance payments to vendors for future inventory deliveries. These advance payments are recorded as other current assets on the condensed balance sheet.

Fixed Assets

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method. Laboratory and production equipment, furniture and office equipment are depreciated over a three to seven year period. Leasehold improvements are stated at cost and are amortized over the lesser of the non-cancelable term of the related lease or their estimated useful lives. Leased equipment is amortized over the lesser of the life of the lease or their estimated useful lives. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation and amortization are eliminated from the balance sheet and any resulting gains or losses are included in operations in the period of disposal.

The Company records all proceeds received from the lessor for tenant improvements under the terms of its operating lease as deferred rent. The amounts are amortized on a straight-line basis over the term of the lease as an offset to rent expense.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flow to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value, which is computed based on a discounted cash flow basis.

Revenue Recognition

The Company’s principal sources of revenue are product sales of KALBITOR, royalties, and development and license fees derived from collaboration and license agreements. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, collectability of the resulting receivable is reasonably assured and the Company has no further performance obligations.

Product Sales and Allowances

Product Sales. Product sales are generated from the sale of KALBITOR to the Company’s customers, primarily wholesale and specialty distributors, and are recorded upon delivery when title and risk of loss have passed to the customer. Product sales are recorded net of applicable reserves for distributors, prompt pay and other discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances.

Under certain arrangements the Company has provided its distributors with extended payment terms. In these circumstances, revenue is not recognized until collectability is reasonably assured or payment from the distributor has been received.

Product Sales Allowances. The Company establishes reserves for trade distributor, prompt pay and volume discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances. Reserves established for these discounts and allowances are classified as a reduction of accounts receivable (if the amount is payable to the customer) or a liability (if the amount is payable to a party other than the customer).

Allowances against receivable balances primarily relate to prompt payment discounts and are recorded at the time of sale, resulting in a reduction in product sales revenue. Accruals related to government rebates, patient financial assistance programs, product returns and other applicable allowances are recognized at the time of sale, resulting in a reduction in product sales revenue and an increase in accrued expenses.

The Company maintains service contracts with its distributors. These contracts include services such as inventory maintenance and patient support services, which have included call center and on-demand nursing services. Accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor’s product, specify that each consideration given by a vendor to a customer is presumed to be a reduction of the selling price. Consideration should be characterized as a cost if the company receives, or will receive, an identifiable benefit in exchange for the consideration, and fair value of the benefit can be reasonably estimated. The Company has established that patient support services are at fair value and represent a separate and identifiable benefit because these services could be provided by separate third-party vendors. Accordingly, these costs are classified as selling, general and administrative expense.

Fees paid to distributors for inventory maintenance are calculated as a percentage of the KALBITOR sales price and accordingly, are classified as a reduction in product sales revenue.

Prompt Payment and Other Discounts. The Company offers a prompt payment discount to its United States distributors. Since the Company expects that these distributors will take advantage of this discount, the Company accrues 100% of the prompt payment discount that is based on the gross amount of each invoice, at the time of sale. This accrual is adjusted quarterly to reflect actual earned discounts. The Company has also offered volume discounts to certain distributors which are accrued quarterly based on sales during the period.

Government Rebates and Chargebacks. The Company estimates reductions to product sales for Medicaid and Veterans' Administration (VA) programs and the Medicare Part D Coverage Gap Program, as well as for certain other qualifying federal and state government programs. The Company estimates the amount of these reductions based on available KALBITOR patient data, actual sales data and rebate claims. These allowances are adjusted each period based on actual experience.

Medicaid rebate reserves relate to the Company’s estimated obligations to state jurisdictions under the established reimbursement arrangements of each applicable state. Rebate accruals are recorded during the same period in which the related product sales are recognized. Actual rebate amounts are determined at the time of claim by the state, and the Company will generally make cash payments for such amounts after receiving billings from the state.

VA rebates or chargeback reserves represent the Company’s estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at a price lower than the list price charged to the Company’s distributor. The distributor will charge the Company for the difference between what the distributor pays for the product and the ultimate selling price to the qualified healthcare provider. Rebate accruals are established during the same period in which the related product sales are recognized. Actual chargeback amounts for Public Health Service are determined at the time of resale to the qualified healthcare provider from the distributor, and the Company will generally issue credits for such amounts after receiving notification from the distributor.

Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to six months or longer after the sale. Reserve estimates are evaluated quarterly and if necessary, adjusted to reflect actual results. Any such adjustments will be reflected in the Company’s operating results in the period of the adjustment.

Product Returns. Allowances for product returns are recorded during the period in which the related product sales are recognized, resulting in a reduction to product revenue. The Company does not provide its distributors with a general right of product return. The Company permits returns if the product is damaged or defective when received by customers or if the product shelf life has expired. The Company estimates product returns based upon actual returns history and data provided by a distributor.

Patient Financial Assistance. The Company offers a financial assistance program for commercially insured KALBITOR patients in order to defray patients’ out-of-pocket expenses, including co-payments, to aid patients’ access to KALBITOR. The Company estimates its liability for this program based on actual but unpaid reimbursements, as well as, an estimated reserve for product sold to and held by distributors as of period end, based on the Company’s historical redemption rates.

An analysis of the amount of, and change in, reserves related to sales allowances is summarized as follows:



(In thousands)	Prompt pay and other discounts			Patient Financial assistance			Government rebates and chargebacks			Returns			Total
Balance, as of December 31, 2013	$	484		$	90		$	1,634		$	323		$	2,531
Current provisions relating to sales in current year	3,593			443			3,270			267			7,573
Adjustments relating to prior years	6			11			(209		)	44			(148		)
Payments relating to sales in current year	(3,154		)	(385		)	(1,800		)	—			(5,339		)
Payments/returns relating to sales in prior years	(383		)	(16		)	(908		)	(42		)	(1,349		)
Balance, as of December 31, 2014	$	546		$	143		$	1,987		$	592		$	3,268
Current provisions relating to sales in current year	2,741			315			2,760			48			5,864
Adjustments relating to prior years	—			3			(46		)	(137		)	(180		)
Payments relating to sales in current year	(2,357		)	(373		)	(1,228		)	—			(3,958		)
Payments/returns relating to sales in prior years	(440		)	(21		)	(730		)	(117		)	(1,308		)
Balance, as of September 30, 2015	$	490		$	67		$	2,743		$	386		$	3,686

Development and License Fee Revenues

Collaboration Agreements. The Company enters into collaboration agreements with other companies for the research and development of therapeutic and diagnostic products. The terms of the agreements may include non-refundable signing and licensing fees, funding for research and development, payments related to manufacturing services, milestone payments and royalties on any product sales derived from collaborations. These multiple element arrangements are analyzed to determine how the deliverables, which often include license and performance obligations such as research, steering committee and manufacturing services, are separated into units of accounting.

For agreements entered into prior to 2011, the Company evaluated license arrangements with multiple elements in accordance with Accounting Standards Codification (ASC), 605-25 Revenue Recognition – Multiple-Element Arrangements. Since 2011, the Company has applied the guidance of ASU 2009-13to evaluate license arrangements with multiple elements. This guidance amended the accounting standards for certain multiple element arrangements to:


•	Provide updated guidance on whether multiple elements exist, how the elements in an arrangement should be separated and how the arrangement considerations should be allocated to the separate elements;

•

Require an entity to allocate arrangement consideration to each element based on a selling price hierarchy, also called the relative selling price method, where the selling price for an element is based on vendor-specific objective evidence (VSOE), if available; third-party evidence (TPE), if available and VSOE is not available; or the best estimate of selling price (BESP), if neither VSOE or TPE is available; and


•	Eliminate the use of the residual method and require an entity to allocate arrangement consideration using the selling price hierarchy.

The Company evaluates all deliverables within an arrangement to determine whether or not they provide value to the licensee on a stand-alone basis. Based on this evaluation, the deliverables are separated into units of accounting. If VSOE or vendor objective evidence (VOE) is not available to determine the fair value of a deliverable, the Company determines the best estimate of selling price associated with the deliverable. The arrangement consideration, including upfront license fees and funding for research and development, is allocated to the separate units based on relative fair value.

VSOE is based on the price charged when an element is sold separately and represents the actual price charged for that deliverable. When VSOE cannot be established, the Company attempts to establish the selling price of the elements of a license arrangement based on VOE. VOE is determined based on third party evidence for similar deliverables when sold separately. In circumstances when the Company charges a licensee for pass-through costs paid to external vendors for development services, these costs represent VOE.

When the Company is unable to establish the selling price of an element using VSOE or VOE, management determines BESP for that element. The objective of BESP is to determine the price at which the Company would transact a sale if the element within the license agreement was sold on a stand-alone basis. The Company’s process for establishing BESP involves

management’s judgment and considers multiple factors including discounted cash flows, estimated direct expenses and other costs and available data.

Based on the value allocated to each unit of accounting within an arrangement, upfront fees and other guaranteed payments are allocated to each unit based on relative value. The appropriate revenue recognition method is applied to each unit and revenue is accordingly recognized as each unit is delivered.

For agreements entered into prior to 2011, revenue related to upfront license fees was spread over the full period of performance under the agreement, unless the license was determined to provide value to the licensee on a stand-alone basis and the fair value of the undelivered performance obligations, typically including research or steering committee services was determinable.

Steering committee services that were not inconsequential or perfunctory and were determined to be performance obligations were combined with other research services or performance obligations required under an arrangement, if any, to determine the level of effort required in an arrangement and the period over which the Company expected to complete its aggregate performance obligations.

Whenever the Company determined that an arrangement should be accounted for as a single unit of accounting, it determined the period over which the performance obligations would be completed. Revenue is recognized using either an efforts-based or time-based proportional performance (i.e. straight-line) method. The Company recognizes revenue using an efforts-based proportional performance method when the level of effort required to complete its performance obligations under an arrangement can be reasonably estimated and such performance obligations are provided on a best-efforts basis. Direct labor hours or full-time equivalents are typically used as the measurement of performance.

If the Company cannot reasonably estimate the level of effort to complete its performance obligations under an arrangement, then revenue under the arrangement is recognized on a straight-line basis over the period the Company is expected to complete its performance obligations.

Many of the Company's collaboration agreements entitle it to additional payments upon the achievement of performance-based milestones. Milestones that are tied to development or regulatory approval are not considered probable of being achieved until such approval is received. All milestones which are determined to be substantive milestones are recognized as revenue in the period in which they are met in accordance with Accounting Standards Update (ASU) No. 2010-17, Revenue Recognition – Milestone Method. Milestones tied to counter-party performance are not included in the Company’s revenue model until performance conditions are met. Milestones determined to be non-substantive are allocated to each unit of accounting within an arrangement when met. The allocation of the milestone to each unit is based on relative value and revenue related to each unit is recognized accordingly.

Costs of revenues related to licensees’ product development, including license fees and development and regulatory milestones are classified as research and development in the statements of operations and comprehensive loss.

Phage Display Library Licenses. Standard terms of the proprietary phage display library agreements generally include non-refundable signing fees, license maintenance fees, development milestone payments, product license payments and royalties on product sales. Signing fees and maintenance fees are generally recognized on a straight line basis over the term of the agreement as deliverables within these arrangements are determined to not provide the licensee with value on a stand-alone basis and therefore are accounted for as a single unit of accounting. As milestones are achieved under a phage display library license, a portion of the milestone payment, equal to the percentage of the performance period completed when the milestone is achieved, multiplied by the amount of the milestone payment, will be recognized. The remaining portion of the milestone will be recognized over the remaining performance period on a straight-line basis. If the Company has no future obligations under the license, milestone payments under these license arrangements are recognized as revenue when the milestone is achieved. Product license payments, which are optional to the licensee, are substantive and therefore are excluded from the initial allocation of the arrangement consideration. These payments are recognized as revenue when the license is issued upon exercise of the licensee’s option, if the Company has no future obligations under the agreement. If there are future obligations under the agreement, product license payments are recognized as revenue only to the extent of the fair value of the license. Amounts paid in excess of fair value are recognized in a manner similar to milestone payments. Payments received that have not met the appropriate criteria for revenue recognition are recorded as deferred revenue.

LFRP Milestones

Non-substantive Milestones. Under the LFRP licenses, the Company is eligible to receive clinical development, regulatory filing and marketing approval milestones, which vary from licensee to licensee. Achievement of these milestones is contingent upon each licensee’s efforts and involves risks and uncertainty related to drug development, regulatory approval and intellectual property that could lead to milestones never being met.

Based on information available to the Company regarding pre-clinical and clinical candidates in the LFRP developed using its technology and through intellectual property rights granted, it is estimated that the Company could receive up to $58 million in development milestones, $53 million in regulatory filing milestones and $79 million in marketing approval milestones. As achievement of these milestones is outside the control of the Company and is contingent upon the licensees’ efforts, they have been determined to be non-substantive milestones.

The Company recognized revenue of approximately $691,000 and $4.2 million for the three and nine months ended September 30, 2015 associated with non-substantive milestones, respectively, and approximately $152,000 and $2.3 million related to non-substantive milestones under the LFRP for each of the three and nine months ended September 30, 2014.

Substantive Milestones. There are no substantive milestones under the LFRP for the three and nine months ended September 30, 2015 and 2014.

Non-LFRP Milestones

In certain countries outside of the U.S., the Company has entered into licensing agreements for the development and commercialization of KALBITOR for the treatment of HAE and other angioedema indications. Under these agreements, the Company is eligible to receive certain development and sales milestones. Achievement of these milestones is contingent upon each licensee’s efforts and involves risks and uncertainty related to regulatory approval and commercialization process that could lead to milestones never being met. There was no amount recognized for these milestones during the three and nine months ended September 30, 2015 and 2014.

Royalty Revenue

Royalty revenue is recognized when it becomes determinable and collectability is reasonably assured. For royalties recognized related to CYRAMZA, the first therapeutic product in the LFRP, which is commercialized by Lilly, the Company recognizes royalty revenue using an estimate of the royalties earned for the quarter based on Lilly’s reported sales of CYRAMZA.

Cost of Product Sales and Royalties

Cost of product sales includes costs to procure, manufacture and distribute KALBITOR and manufacturing royalties.

Cost of royalties is derived from pass-through fees under a cross license agreement related to royalties from product sales by its LFRP licensees.

Research and Development

Research and development costs include all direct costs, including salaries and benefits for research and development personnel, outside consultants, costs of clinical trials, sponsored research, clinical trials insurance, other outside costs, depreciation and facility costs related to the development of drug candidates, as well as certain pass-through costs under the Company’s cross license agreements related to product development by its LFRP licensees, including license fees and development and regulatory milestones.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes in accordance with ASC 740 Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using the enacted statutory tax rates. At September 30, 2015 and December 31, 2014, there were no unrecognized tax benefits.

The Company accounts for uncertain tax positions using a "more-likely-than-not" threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The provision for income

taxes includes the effects of any resulting tax reserves or unrecognized tax benefits that are considered appropriate as well as the related net interest and penalties, if any. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

Translation of Foreign Currencies

Assets and liabilities of the Company's foreign subsidiaries are translated at period-end exchange rates. Amounts included in the statements of operations are translated at the average exchange rate for the period. Historically, the Company’s foreign subsidiaries are U.S. dollar functional currency denominated and local currency is re-measured in U.S. dollars and recorded to other income (expense) in the statement of operations and comprehensive loss. The Company recorded other expense of $10,000 for the nine months ended September 30, 2015 for the translation of foreign currency. No other expense or income was recorded for the three months ended September 30, 2015 as the company has liquidated all foreign subsidiaries. The Company recorded other expense of $20,000 and $23,000 for the three and nine months ended September 30, 2014, respectively.

Share-Based Compensation

The Company’s share-based compensation program consists of share-based awards granted to employees in the form of stock options and restricted stock units (RSUs), as well as its 1998 Employee Stock Purchase Plan, as amended (the Purchase Plan). The Company’s share-based compensation expense is recorded in accordance with ASC 718 Compensation - Stock Compensation.

Income or Loss Per Share

The Company follows the two-class method when computing net loss per share, as it had issued shares that met the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends, as if all income for the period had been distributed. For the three and nine months ended September 30, 2015 and 2014, there were no outstanding securities that would be considered participating securities.

The Company presents two earnings or loss per share (EPS) amounts, basic and diluted in accordance with ASC 260 Earnings per Share. Basic earnings or loss per share is computed using the weighted average number of shares of common stock outstanding. The Company excluded the following common stock equivalents, outstanding as of September 30, 2015 and 2014 (prior to consideration of the treasury stock method), from the computation of diluted net loss per share attributable to common stockholders because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2015	2014	2015	2014
Options to purchase common stock	13,974,241	11,850,440	13,854,056	11,721,260
Unvested restricted stock units	560,115	480,161	549,349	437,164
Total	14,534,356	12,330,601	14,403,405	12,158,424

Comprehensive Income (Loss)

The Company accounts for comprehensive income (loss) under ASC 220, Comprehensive Income, which established standards for reporting and displaying comprehensive income (loss) and its components in a full set of general purpose financial statements. The statement required that all components of comprehensive income (loss) be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company is presenting comprehensive income (loss) as part of the statements of operations and comprehensive loss.

Business Segments

The Company discloses business segments under ASC 280, Segment Reporting. The statement established standards for reporting information about operating segments and disclosures about products and services, geographic areas and major

customers. The Company operates in one business segment as a biopharmaceutical company within predominantly one geographic area. Long-lived assets consist entirely of property and equipment and are located in the United States for all periods presented.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies, which are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In July 2015, the FASB issued amendments which simplify the existing guidance which requires entities to subsequently measure inventory at the lower of cost or market value. Under the amendments, an entity should measure inventory valued using a first-in, first-out or average cost method at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This update is effective for public business entities during fiscal years beginning after December 15, 2016. Early adoption is permitted. This amendment is not expected to have a material impact on the Company's financial statements.

In May 2015, the FASB issued amendments which remove the requirement to categorize within the fair value hierarchy all investments for which fair value measured using the net asset value (NAV) as a practical expedient for fair value. Removing investments measured using the practical expedient from the fair value hierarchy is intended to eliminate the diversity in practice that currently exists with respect to the categorization of these investments. The new guidance requires reporting entities to continue to disclose information on investments for which fair value is measured at net asset value (or its equivalent) as a practical expedient to help users understand the nature and risks of the investments and whether the investments, if sold, are probable of being sold at amounts different from net asset value. A reporting entity should apply the amendments retrospectively to all periods presented. This update is effective for public business entities during fiscal years beginning after December 15, 2015. Early adoption is permitted. This amendment is not expected to have a material impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-3, “Interest - Imputation of Interest” (ASU 2015-3) that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This update is effective for annual reporting periods beginning on or after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. The Company has assessed and determined that adoption of ASU 2015-03 will have no material impact on its financial statements.

In May 2014, the FASB issued an amendment which will replace most of the existing revenue recognition guidance within U.S. GAAP. The core principle of this guidance is that an entity should recognize revenue for the transfer of goods or services to customers in an amount that it expects to be entitled to receive for those goods or services. In doing so, companies will be required to make certain judgments and estimates, including identifying contract performance obligations, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price among separate performance obligations. Additionally, the amendment requires disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, significant judgments reached in the application of the guidance and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB voted to defer the effective date of the amendment to apply to public business entities for annual and interim periods ending after December 15, 2017. The amendment allows for two methods of adoption: a full retrospective method or a modified retrospective approach with the cumulative effect recognized at the date of initial application. The Company is in the process of determining the method of adoption and the impact of this amendment on its financial statements.

3. SIGNIFICANT TRANSACTIONS

CVie Therapeutics

In 2013, the Company entered into an agreement with CVie Therapeutics (CVie), a subsidiary of Lee’s Pharmaceutical Holdings Ltd., to develop and commercialize KALBITOR for the treatment of HAE and other angioedema indications in China, Hong Kong and Macau. Under the terms of this exclusive license agreement, Dyax received a $1.0 million upfront payment and is eligible to receive up to $11 million in future regulatory and sales milestones. In September 2014, the contract was amended to expand CVIE’s territories to include the Republic of Korea, Taiwan and Singapore. The Company is eligible to receive royalties on net product sales in all licensed territories. CVie is solely responsible for all costs associated with development, regulatory activities and the commercialization of KALBITOR in its licensed territories. CVie will purchase drug

product from the Company on a cost-plus basis for its commercial supply when and if KALBITOR is approved for commercial sale in the CVie territories.

The Company analyzed this multiple element arrangement in accordance with ASC 605-25 and evaluated whether the performance obligations under this agreement, including the product license, steering committee, and manufacturing services should be accounted for as a single unit or multiple units of accounting. Because of the risk associated with obtaining approval for commercial sale in the CVie territories, manufacturing services associated with commercial supply are considered a contingent deliverable and will be accounted for if and when performed. As CVie is required to obtain all drug product for both clinical development and commercial demand from the Company, all other deliverables under this arrangement were determined to provide no stand-alone value to the licensee. Accordingly, it was determined that the license, manufacturing services associated with clinical supply, and steering committee performance obligations under this agreement represent a single unit of accounting.

At this time, the Company cannot reasonably estimate the level of effort required to fulfill its obligations and, therefore, is recognizing revenue associated with the upfront payment on a straight-line basis through mid-2020, the estimated development period in the CVie territories.

The Company recognized revenue of $34,000 and $82,000 for the three and nine months ended September 30, 2015, respectively, and $36,000 and $69,000 revenue was recorded for the three and nine months ended September 30, 2014, respectively. As of September 30, 2015 and December 31, 2014, the Company has deferred $640,000 and $723,000, respectively of revenue related to this arrangement, which is recorded in deferred revenue on the accompanying condensed balance sheets.

Pint Pharma

In 2013, the Company entered into an exclusive agreement with Novellus Biopharma AG (Novellus) to develop and commercialize KALBITOR for the treatment of HAE and other angioedema indications in select countries in Latin America, including Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. In 2014, this agreement was assigned to Pint Pharma (Pint) and amended to include the territories of Algeria, Tunisia, Morocco, and South Africa. Under the terms of the exclusive license agreement, the Company received upfront payments totaling $500,000 and is eligible to receive up to $5.2 million in future regulatory and sales milestones and royalties on net product sales. Pint is solely responsible for all costs associated with development, regulatory activities, and the commercialization of KALBITOR in their licensed territories. Pint will purchase drug product from the Company on a cost-plus basis for its commercial supply.

The Company will recognize revenue related to this arrangement, including the upfront payments, on a unit output basis, as products under clinical and commercial supply are provided to Pint. As no supply has been provided to Pint to date, no revenue has been recognized under this agreement. The Company has deferred recognition of the upfront payments of $500,000, which is recorded in deferred revenue on the accompanying balance sheets.

4. FAIR VALUE MEASUREMENTS

The following tables present information about the Company's financial assets that have been measured at fair value as of September 30, 2015, and December 31, 2014, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices, for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.



Description (in thousands)	September 30, 2015		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money Market Funds	$	108,904	$	108,904	$	—	$	—
US Treasury Bills and Notes	191,698		—		191,698		—
Total	$	300,602	$	108,904	$	191,698	$	—



Description (in thousands)	December 31, 2014		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money Market Funds	$	15,610	$	15,610	$	—	$	—
US Treasury Bills and Notes	165,260		—		165,260		—
Total	$	180,870	$	15,610	$	165,260	$	—

The following tables summarize the Company’s marketable securities at September 30, 2015, and December 31, 2014:



	September 30, 2015
Description (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
US Treasury Bills and Notes (due within 1 year)	$	93,548	$	26	$	—	$	93,574
US Treasury Bills and Notes (due after 1 year through 2 years)	98,068		56		—		98,124
Total	$	191,616	$	82	$	—	$	191,698



	December 31, 2014
Description (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
US Treasury Bills and Notes (due within 1 year)	$	165,232	$	28	$	—	$	165,260
Total	$	165,232	$	28	$	—	$	165,260

As of September 30, 2015 and December 31, 2014, the Company's cash equivalents and short-term investments have been initially valued at the transaction price and subsequently valued utilizing a third party pricing service. The Company validates the prices provided by its third-party pricing service by understanding the models used and obtaining market values from other pricing sources.

The Company classifies its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations.

The carrying amounts reflected in the balance sheets for cash, cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities.

5. INVENTORY

Costs associated with the manufacture of KALBITOR are recorded as inventory.

Inventory that will be sold beyond the Company's normal operating cycle is classified as non-current and grouped with Other Assets on the Company's balance sheet. As of September 30, 2015 and December 31, 2014, approximately $9.8 million and $2.7 million of inventory, respectively, are classified as non-current.

Inventory consists of the following:



	September 30, 2015		December 31, 2014
	(in thousands)
Raw Materials	$	1,035	$	1,074
Work in Progress	9,023		3,872
Finished Goods	4,488		2,282
Total	$	14,546	$	7,228

6. FIXED ASSETS

Fixed assets consist of the following:



	September 30, 2015			December 31, 2014
	(in thousands)
Laboratory equipment	$	4,504		$	4,134
Furniture and office equipment	1,075			944
Software and computers	3,897			3,071
Leasehold improvements	4,554			4,554
Total	14,030			12,703
Less: accumulated depreciation	(8,817		)	(8,072		)
	$	5,213		$	4,631

Depreciation expense for the three and nine months ended September 30, 2015 was approximately $266,000 and $745,000, respectively and $219,000 and $642,000 for the three and nine months ended September 30, 2014, respectively.

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:



	September 30, 2015		December 31, 2014
	(in thousands)
Accounts payable	$	1,409	$	999
Accrued employee compensation and related taxes	6,485		5,759
Accrued external research and development and sales expenses	7,919		3,020
Accrued license fees	3,317		3,165
Accrued sales allowances	2,869		2,368
Other accrued liabilities	2,800		2,062
Total	$	24,799	$	17,373

8. LONG-TERM OBLIGATIONS

Notes Payable - HealthCare Royalty Partners

In August 2015, the Company repaid in full all indebtedness outstanding under a loan agreement with an affiliate of HC Royalty (the Loan) which included $84.1 million in principal. In connection with the Loan, which bore interest at a rate of 12% per annum, the Company had entered into a security agreement granting HC Royalty a security interest in the intellectual property related to the LFRP, and the revenues generated by the Company through the licenses of the intellectual property related to the LFRP. This security agreement terminated at the time of the Loan repayment.

For financial reporting purposes, the Company’s $84.1 million principal repayment was recorded as an $82.2 million debt extinguishment and a $1.9 million extinguishment loss associated with discounts from the debt issuance that had not been accreted to principal prior to repayment. Previously, these charges were accreted to the principal balance over the expected term of the Loan, which was scheduled to mature in August 2018.

Activity under the Loan, adjusted for discounts associated with the debt issuance, including warrants and fees, is presented for financial reporting purposes, as follows:



	September 30, 2015			December 31, 2014
	(in thousands)
Beginning balance	$	82,165		$	81,516
Accretion of discount	727			198
Loan activity:
Interest expense	8,078			10,588
Payments applied to principal	(84,472		)	—
Payments applied to interest	(6,498		)	(8,978		)
Accrued interest payable	—			(1,159		)
Ending balance	$	—		$	82,165

Facility Lease

The Company’s principal offices and corporate headquarters are located in Burlington, Massachusetts. As of September 30, 2015, the leased premises consist of approximately 45,000 rentable square feet of office and laboratory facilities. The ten year term of the lease extends to 2022 and the Company has rights to extend the term for an additional five years at fair market value, subject to specified terms and conditions. The aggregate minimum lease commitment over the term of the lease is approximately $15.0 million. The Company has provided the landlord a Letter of Credit of $1.1 million to secure its obligations under the lease for which the Company has restricted cash recorded in the accompanying condensed balance sheet. Under the terms of the lease agreement, the landlord has provided the Company with a tenant improvement allowance of $2.6 million, including a loan totaling $671,000, which was used towards the cost of leasehold improvements. As of September 30, 2015 and December 31, 2014, the outstanding balance of the loan was $484,000 and $527,000. The Company has capitalized approximately $4.6 million in leasehold improvements associated with the Burlington facility. Costs reimbursed under the tenant improvement allowance have been recorded as deferred rent and are being amortized as a reduction to rent expense over the lease term.

Subsequent to September 30, 2015, the Company amended its lease to add approximately 20,000 rentable square feet of office space on terms that are equivalent to the original lease.

9. STOCKHOLDER’S EQUITY AND STOCK-BASED COMPENSATION

Issuance of Common Stock

In April 2015, the Company issued 8,510,000 shares of common stock at $27.00 per share in an underwritten public offering. Net proceeds from the offering were approximately $215.8 million, after deducting offering expenses.

Equity Incentive Plan

The Company's 1995 Equity Incentive Plan (the Equity Plan), as amended, is an equity plan under which equity awards, including awards of restricted stock, RSUs and incentive and nonqualified stock options to purchase shares of common stock

may be granted to employees, consultants and directors of the Company by action of the Compensation Committee of the Board of Directors. Options are granted at the current fair market value on the date of grant, generally vest ratably over a 48-month period, and expire within ten years from date of grant. RSUs are valued at the current fair market value on the date of grant, and generally vest annually in equal installments over a four-year period. The Equity Plan is intended to attract and retain employees and to provide an incentive for employees, consultants and directors to assist the Company to achieve long-range performance goals and to enable them to participate in the long-term growth of the Company.

At September 30, 2015, a total of 6,188,704 shares were available for future grants under the Equity Plan.

The following table summarizes stock option and RSU activity for the period ended September 30, 2015:



	Number of Options		Number of RSUs
Outstanding as of December 31, 2014	11,587,079		486,174
Granted/Awarded	4,090,351		241,250
Options Exercised/Shares Issued	(1,767,097	)	(153,177	)
Cancelled	(133,648	)	(13,708	)
Outstanding as of September 30, 2015	13,776,685		560,539

Exercisable as of September 30, 2015	7,461,978		—

Employee Stock Purchase Plan

The Company's 1998 Employee Stock Purchase Plan (the Purchase Plan) allows employees to purchase shares of the Company's common stock at a discount from fair market value. Under the Purchase Plan, eligible employees may purchase shares during six-month offering periods commencing on June 1 and December 1 of each year at a price per share of 85% of the lower of the fair market value price per share on the first or last day of each six-month offering period. Participating employees may elect to have up to 10% of their base pay withheld and applied toward the purchase of such shares, subject to the limitation of 875 shares per participant per quarter. The rights of participating employees under the Purchase Plan terminate upon voluntary withdrawal from the Purchase Plan at any time or upon termination of employment. The compensation expense recognized in connection with the Plan was approximately $87,000 and $221,000 for the three and nine months ended September 30, 2015, respectively, and approximately $90,000 and $177,000 for the three and nine months ended September 30, 2014, respectively. There were 30,584 and 29,051 shares purchased under the Plan during the nine months ended September 30, 2015 and 2014.

At September 30, 2015, a total of 672,168 shares were reserved and available for issuance under this Plan.

Stock-Based Compensation Expense

The Company measures compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options was determined using the Black-Scholes valuation model. Such value is recognized as expense over the service period, net of estimated forfeitures and adjusted for actual forfeitures. The estimation of stock awards that will ultimately vest requires significant judgment. The Company considers many factors when estimating expected forfeitures, including historical experience. Actual results and future changes in estimates may differ substantially from the Company's current estimates.

The following table reflects stock compensation expense recorded, net of amounts capitalized into inventory:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(in thousands)
Compensation expense related to:
Equity Incentive Plan	$	5,782	$	1,952	$	13,374	$	5,117
Employee Stock Purchase Plan	87		90		221		177
	$	5,869	$	2,042	$	13,595	$	5,294

Stock-based compensation expense charged to:
Research and development	$	1,662	$	794	$	4,381	$	2,021

Selling, general and administrative	$	4,207	$	1,248	$	9,214	$	3,273

Stock-based compensation expense of $36,000 and $117,000 for the three and nine months ended September 30, 2015, respectively, and $22,000 and $45,000 for the three and nine months ended September 30, 2014, respectively, has been excluded from the chart above and was capitalized into inventory. Capitalized stock-based compensation is recognized into cost of product sales when the related product is sold.

10. INCOME TAXES

Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets for which the Company determines that it does not meet the criteria under ASC 740.

As of December 31, 2014, the Company had federal tax net operating loss carryforwards (NOLs) of $347.4 million, available to reduce future taxable income, which expire at various times beginning in 2018 through 2034. The Company also had federal research and experimentation and orphan drug credit carryforwards of approximately $68.1 million as of December 31, 2014, available to reduce future tax liabilities which will expire at various dates beginning in 2018 through 2034. The Company had state tax net operating loss carryforwards of approximately $54.0 million as of December 31, 2014, available to reduce future state taxable income, which will expire at various dates beginning in 2029 through 2034. The Company also had state research and development and investment tax credit carryforwards of approximately $8.8 million as of December 31, 2014, available to reduce future tax liabilities which expire at various dates beginning in 2015 through 2029.

Included in the Company’s NOL carryforward of $347.4 million are approximately $16.7 million of tax deductions from the exercise of stock options at December 31, 2014. The Company has recorded a deferred tax asset of approximately $1.8 million at December 31, 2014 reflecting the benefit of the deduction from the exercise of stock options which has been fully reserved until it is more likely than not that the benefit will be realized. The benefit from these deductions will be recorded as a credit to additional paid-in capital if and when realized through a reduction of taxes paid in cash.

As required by ASC 740, management of the Company has evaluated the positive and negative evidence bearing upon the reliability of its deferred tax assets, which are comprised principally of NOL carry forwards, research and experimentation credit carryforwards, and capitalized start up expenditures and research and development expenditures amortizable over ten years straight-line. Management has determined at this time that it is more likely than not that the Company will not recognize the benefits of its federal and state deferred tax assets and, as a result, a valuation allowance of approximately $219.8 million has been established at December 31, 2014.

Utilization of the NOLs and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986 (Section 382), as well as similar state and foreign provisions. Ownership changes may limit the amount of NOLs and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of 5% shareholders or public groups in the stock of a corporation by more than 50 percent in the aggregate over a three-year period. The Company has completed studies through December 31, 2014, to determine whether any ownership change has occurred since the Company's formation and has determined that transactions have resulted in two ownership changes, as defined by Section 382. There could

be additional ownership changes in the future that could further limit the amount of NOLs and tax credit carryforwards that the Company can utilize.

As of December 31, 2014, the Company’s federal tax NOLs available to reduce future taxable income without limitation are $280.9 million, which expire at various times beginning in 2024 through 2034. The Company’s federal research and experimentation and orphan drug credit carryforward as of December 31, 2014 available to reduce future tax liabilities without limitation are $63.3 million, which will expire at various dates beginning in 2024 through 2034. In addition, the Company has NOL and federal tax credits that are subject to limitation and expire at various times beginning in 2018 through 2024. These NOLs and federal tax credits of $67.2 and $4.8 million, respectively, may be utilized in part, subject to an annual limitation. The cumulative annual limitation as of December 31, 2014 was large enough to allow the Company to utilize the $67.2 and $4.8 million of NOL and federal tax credits to currently offset income until expiration. However, additional ownership changes after December 31, 2014 could restrict the use of the Company’s NOLs and federal tax credits.

11. SUBSEQUENT EVENT

On November 2, 2015, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Shire Pharmaceuticals International, a company incorporated in Ireland (“Parent”), Parquet Courts, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) and Shire plc, a company incorporated in Jersey (“Parent Holdco”). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Dyax and the separate corporate existence of Merger Sub will thereupon cease, pursuant to the provisions of the General Corporation Law of the State of Delaware (DGCL), as provided in the Merger Agreement, with Dyax being the surviving corporation (the “Merger”). Parent Holdco has guaranteed the performance by Parent and Merger Sub of their obligations under the Merger Agreement.

At the effective time of the Merger (the “Effective Time”), each issued and outstanding share of the common stock of Dyax will be cancelled and converted into the right to receive (a) $37.30 per share in cash, subject to any applicable withholding of taxes, without interest and (b) one (1) contractual contingent value right per share (each, a “CVR”), which represents the right to receive a contingent payment of $4.00 in cash, without interest, if the specified milestone is achieved, pursuant to a Contingent Value Rights Agreement (the “CVR Agreement”) to be entered into between Parent Holdco and a rights agent.

The completion of the Merger is subject to adoption of the Merger Agreement by holders of a majority of the outstanding shares of Dyax entitled to vote on the matter, the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) and other customary closing conditions. Parent Holdco has agreed to use reasonable best efforts to obtain antitrust approval of the transaction, but is not obligated to divest any assets other than assets of Dyax aggregating no greater than $77.0 million in revenue for 2014. Consummation of the Merger is not subject to a financing condition. The Company and Parent may terminate the Merger Agreement if the Merger is not consummated by August 2, 2016, which date may be extended to November 2, 2016 under certain circumstances described in the Merger Agreement.

The Merger Agreement includes customary representations, warranties and covenants by the Company, Parent, Merger Sub and Parent Holdco. The Company has agreed to operate its business in the ordinary course until the Effective Time. The Company has also agreed not to solicit or initiate discussions with third parties regarding other proposals to acquire it and to certain restrictions on its ability to respond to any such proposals. The Merger Agreement also includes customary termination provisions for both the Company and Parent, subject, in certain circumstances, to (a) the payment by the Company of a termination fee of $180 million (the “Company Termination Fee”) or (b) the payment by Parent of a termination fee of $280 million (the “Parent Termination Fee”). The Company must pay Parent the Company Termination Fee in the event that the Merger Agreement is terminated by Parent following a change of recommendation by the Company’s board of directors or if the Company enters into an agreement with respect to a proposal from a third party that is superior to Parent’s, in each case, as is more particularly described in the Merger Agreement. Under certain additional circumstances described in the Merger Agreement, the Company must also pay Parent the Company Termination Fee if the Merger Agreement is terminated and, within 12 months following such termination, the Company enters into an agreement for a business combination transaction of the type described in the relevant provisions of the Merger Agreement and such transaction is subsequently consummated. The Company is also required to reimburse Parent for documented out-of-pocket expenses of up to a maximum of $15 million under circumstances specified in the Merger Agreement. Any payment of such expenses to Parent will be credited against any Company Termination Fee paid to Parent by the Company. Parent must pay the Company the Parent Termination Fee in certain circumstances specified in the Merger Agreement where the required antitrust approval is not obtained. The parties to the Merger Agreement are also entitled to an injunction or injunctions to prevent breaches of the Merger Agreement, and to specifically enforce the terms and provisions of the Merger Agreement.

The Company’s board of directors unanimously (i) approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth in the Merger Agreement, (ii) determined that the Merger Agreement and such transactions are fair to, and in the best interests of, Dyax and its stockholders (other than Parent Holdco, Parent and its subsidiaries) and (iii) resolved to recommend that Dyax’s stockholders approve the adoption of the Merger Agreement.

Prior to consummation of the Merger, Parent Holdco will enter into the CVR Agreement with a rights agent mutually agreeable to Parent Holdco and Dyax governing the terms of the CVR portion of the merger consideration. Each CVR represents the right to receive a contingent payment of $4.00 in cash, without interest, upon receipt, prior to December 31, 2019, of approval from the U.S. Food and Drug Administration (“FDA”) of a biologic license application for DX-2930 that does not require, among other things, the inclusion of a “boxed warning” (as defined in 21 CFR §201.57(c)(1)) in the product labeling and the implementation of a risk evaluation and mitigation strategy with elements to assure safe use required by the FDA (other than elements limited to the distribution of educational materials). This approval would grant the right to market and sell DX-2930 in the United States in accordance with applicable law for the prevention of attacks of Type 1 and Type 2 hereditary angioedema in patients with Type 1 or Type 2 hereditary angioedema. The right to the CVR portion of the merger consideration as evidenced by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement.

Item 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 and certain plans and objectives of our board of directors. Such forward-looking statements are based on current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by our management and may include, but are not limited to, statements regarding:


•	risks and uncertainties related to the proposed transaction with Shire Pharmaceuticals International, Parquet

Courts, Inc. and Shire plc including, but not limited to:


◦	the expected timing and likelihood of completion of the pending merger, including the timing, receipt and terms and conditions of any required governmental approvals of the pending merger that could cause the parties to abandon the transaction;


◦	the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, including a termination of the merger agreement under circumstances that could require us to pay a termination fee;


◦	the possibility that our stockholders may not approve the merger;


◦	the risk that the parties may not be able to satisfy the conditions to the proposed merger in a timely manner or at all;


◦	the failure of the merger to close for any other reason;


◦	the non-occurrence of the milestone event specified in the contingent value rights agreement;


◦	risks related to disruption of management time from ongoing business operations due to the proposed merger;


◦	limitations placed on our ability to operate the business by the merger agreement;


◦	the outcome of any legal proceedings instituted against us and/or others relating to the merger agreement, and the transactions contemplated thereby, including the merger;


◦	the risk that any announcements relating to the proposed merger could have adverse effects on the market price of our common stock;


◦	the risk that the proposed transaction and its announcement could have an adverse effect on our ability to retain and hire key personnel and maintain relationships with suppliers and customers, and on our operating results and business generally; and certain presently unknown or unforeseen factors, including, but not limited to, acts of terrorism and natural disasters.


•	the potential benefits and usage of KALBITOR for treating HAE;


•	the commercial potential of KALBITOR, including revenues and costs;


•	the prospects for therapeutic benefits and clinical development of DX-2930, DX-2507 and DX-4012;


•	estimates of potential markets for our products and product candidates;


•	prospects for future milestone payments and/or royalties with respect to licensee product candidates in our LFRP;


•	the potential for market approval for KALBITOR in markets outside the United States;


•	plans to enter into additional collaborative and licensing arrangements for ecallantide and for other compounds in development;


•	the sufficiency of our cash, cash equivalents and short-term investments; and


•	expected future revenues and operating results and cash flows.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. Statements that are not historical facts are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections for our business and the industry and markets in which we compete. We often use words or phrases of expectation or uncertainty like "guidance," "believe," "anticipate," "plan," "expect," "intend," "project," "future," "may," "will," "could," "would" and similar words to help identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Such risks and uncertainties include, but are not limited to, those discussed later in this report under the section entitled "Risk Factors". Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether because of new information, future events or otherwise. Readers should carefully review the risk factors set forth in this report and other reports or documents we file from time to time with the U.S. Securities and Exchange Commission (SEC).

BUSINESS OVERVIEW

Entry into a Definitive Merger Agreement

On November 2, 2015, we entered into a Merger Agreement, with Shire Pharmaceuticals International, a company incorporated in Ireland (“Parent”), Parquet Courts, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) and Shire plc, a company incorporated in Jersey (“Parent Holdco”). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Dyax and the separate corporate existence of Merger Sub will thereupon cease, pursuant to the provisions of the DGCL, as provided in the Merger Agreement, with Dyax being the surviving corporation. Parent Holdco has guaranteed the performance by Parent and Merger Sub of their obligations under the Merger Agreement.

At the Effective Time of the Merger, each issued and outstanding share of our common stock (other than (i) shares owned by Parent, Merger Sub or any other direct or indirect wholly owned subsidiary of Parent and shares owned by Dyax, and in each case, not held on behalf of third parties and (ii) shares that are owned by stockholders who have perfected and not withdrawn a demand for (or lost their right to) appraisal rights pursuant to Section 262 of the DGCL) will be cancelled and converted into the right to receive (a) $37.30 per share in cash, subject to any applicable withholding of taxes, without interest and (b) one (1) CVR per share, which represents the right to receive a contingent payment of $4.00 in cash, without interest, if the specified milestone is achieved, pursuant to a CVR Agreement to be entered into between Parent Holdco and a rights agent.

The completion of the Merger is subject to adoption of the Merger Agreement by holders of a majority of the outstanding shares of Dyax entitled to vote on the matter, the expiration of the waiting period (and any extension thereof) under the HSR Act and other customary closing conditions. Parent Holdco has agreed to use reasonable best efforts to obtain antitrust approval of the transaction, but is not obligated to divest any assets other than assets of Dyax aggregating no greater than $77.0 million in revenue for 2014. Consummation of the Merger is not subject to a financing condition. We and Parent may terminate the Merger Agreement if the Merger is not consummated by August 2, 2016, which date may be extended to November 2, 2016 under certain circumstances described in the Merger Agreement.

The Merger Agreement includes customary representations, warranties and covenants by us, Parent, Merger Sub and Parent Holdco. We have agreed to operate our business in the ordinary course until the Effective Time. We have also agreed not to solicit or initiate discussions with third parties regarding other proposals to acquire us and to certain restrictions on our ability to respond to any such proposals. The Merger Agreement also includes customary termination provisions for both us and Parent, subject, in certain circumstances, to (a) the payment by us of a Company Termination Fee of $180 million or (b) the payment by Parent of a Parent Termination Fee of $280 million. We must pay Parent the Company Termination Fee in the

event that the Merger Agreement is terminated by Parent following a change of recommendation by our board of directors or if we enter into an agreement with respect to a proposal from a third party that is superior to Parent’s, in each case, as is more particularly described in the Merger Agreement. Under certain additional circumstances described in the Merger Agreement, we must also pay Parent the Company Termination Fee if the Merger Agreement is terminated and, within 12 months following such termination, we enter into an agreement for a business combination transaction of the type described in the relevant provisions of the Merger Agreement and such transaction is subsequently consummated. We are also required to reimburse Parent for documented out-of-pocket expenses of up to a maximum of $15 million under circumstances specified in the Merger Agreement. Any payment of such expenses to Parent will be credited against any Company Termination Fee paid to Parent by us. Parent must pay us the Parent Termination Fee in certain circumstances specified in the Merger Agreement where the required antitrust approval is not obtained. The parties to the Merger Agreement are also entitled to an injunction or injunctions to prevent breaches of the Merger Agreement, and to specifically enforce the terms and provisions of the Merger Agreement.

Our board of directors unanimously (i) approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth in the Merger Agreement, (ii) determined that the Merger Agreement and such transactions are fair to, and in the best interests of, Dyax and its stockholders (other than Parent Holdco, Parent and its subsidiaries) and (iii) resolved to recommend that Dyax’s stockholders approve the adoption of the Merger Agreement.

Prior to consummation of the Merger, Parent Holdco will enter into the CVR Agreement with a rights agent mutually agreeable to Parent Holdco and Dyax governing the terms of the CVR portion of the merger consideration. Each CVR represents the right to receive a contingent payment of $4.00 in cash, without interest, upon receipt, prior to December 31, 2019, of approval from the FDA of a biologic license application for DX-2930 that does not require, among other things, the inclusion of a “boxed warning” (as defined in 21 CFR §201.57(c)(1)) in the product labeling and the implementation of a risk evaluation and mitigation strategy with elements to assure safe use required by the FDA (other than elements limited to the distribution of educational materials). This approval would grant the right to market and sell DX-2930 in the United States in accordance with applicable law for the prevention of attacks of Type 1 and Type 2 hereditary angioedema in patients with Type 1 or Type 2 hereditary angioedema. The right to the CVR portion of the merger consideration as evidenced by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement.

The foregoing description of the (i) Merger Agreement and the transactions contemplated thereby and (ii) the CVR Agreement and the transactions contemplated thereby, in each case, do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement and by the CVR Agreement both which of are incorporated herein by reference. The Merger Agreement and the CVR Agreement have been filed to provide information to investors regarding its terms. They are not intended to provide any other factual information about Dyax, Parent, Merger Sub or Parent Holdco, their respective businesses, or the actual conduct of their respective businesses during the period prior to the consummation of the Merger or the other transactions contemplated by the Merger Agreement. The Merger Agreement, the CVR Agreement and this summary should not be relied upon as disclosure about Dyax or Parent. None of our stockholders or any other third parties should rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of Company, Merger Sub, Parent, Parent Holdco or any of their respective subsidiaries or affiliates. The Merger Agreement contains representations and warranties that are the product of negotiations among the parties thereto and that the parties made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part by confidential disclosure schedules delivered in connection with the Merger Agreement. The representations and warranties may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.

Overview

We are a biopharmaceutical company focused on:


•	Hereditary Angioedema and Other Plasma-Kallikrein-Mediated Disorders

We develop and commercialize treatments for HAE. We discovered and developed KALBITOR, a plasma kallikrein inhibitor, and are selling it in the United States for the treatment of acute attacks of HAE. Additionally, we discovered and are developing DX-2930, a fully human monoclonal antibody inhibitor of plasma kallikrein, which is an investigational product candidate to treat HAE prophylactically. We have also developed a biomarker assay that

detects the activation of plasma kallikrein in patient blood and are using this assay to expedite the development of DX-2930.


•	Pipeline Development Programs

•DX-2930 for diabetic macular edema (DME)

•DX-2507 for antibody-mediated autoimmune diseases

•DX-4012 for anti-thrombotic therapy


•	Licensing and Funded Research Portfolio

We have a portfolio of product candidates being developed by licensees based on our phage display technology. This portfolio currently includes one approved product, CYRAMZA^® (ramucirumab) which is marketed by Lilly, and multiple product candidates in various stages of clinical development for which we are eligible to receive future royalties and/or milestone payments.

HEREDITARY ANGIOEDEMA

HAE is a rare, genetic disorder characterized by severe, debilitating and often painful swelling, which can occur in the abdomen, face, hands, feet and airway. HAE is caused by a deficiency of C1-Inhibitor (C1-INH) activity, a naturally occurring molecule that inhibits plasma kallikrein, a key mediator of inflammation, and other serine proteases in the blood. It is estimated that HAE affects approximately 1 in 50,000 people around the world. The U.S. Hereditary Angioedema Association estimates that there are approximately 6,500 HAE patients in the United States.

KALBITOR

KALBITOR (ecallantide) is approved by the FDA for treatment of HAE in patients 12 years of age and older regardless of anatomic location. KALBITOR, a potent, selective and reversible plasma kallikrein inhibitor, was the first subcutaneous HAE treatment approved in the United States and the only subcutaneous therapy available to treat attacks in patients 12 years of age and older. KALBITOR has orphan drug designation in the United States.

United States Sales and Marketing

We have a commercial organization to support sales of KALBITOR in the United States, including a field-based team of approximately 30 professionals, consisting of sales representatives, market access and field advocates, clinical nurse educators and corporate account directors. At this time, our commercial organization is sized to market KALBITOR in the United States, where patients are treated primarily by a limited number of specialty physicians consisting mainly of allergists and immunologists.

Distribution

KALBITOR is currently distributed through a limited network of wholesale, hospital and specialty pharmacy arrangements. This network includes Walgreens Infusion Services, our largest provider of on-demand nursing services, which provides home administration of KALBITOR by healthcare professionals to eligible HAE patients. Our Walgreens agreement has a term through December 2015 and will renew annually unless amended or terminated by the parties.

Manufacturing

We have established a commercial supply chain that consists of third party vendors to manufacture, test and transport KALBITOR. All third party manufacturers involved in the KALBITOR manufacturing process are required to comply with current Good Manufacturing Practices, or cGMPs.

Ecallantide drug substance used in the production of KALBITOR is manufactured in the United Kingdom by Fujifilm Diosynth Biotechnologies (UK) Ltd. (Fujifilm). Under our agreement with Fujifilm, they have committed to be available to manufacture bulk drug substance for us through 2020. The shelf-life of our frozen ecallantide drug substance is four years.

Ecallantide drug substance is filled, labeled and packaged into the final form of KALBITOR drug product by Jubilant Hollister-Stier (JHS) Contract Manufacturing Services at its facilities in Spokane, Washington under a commercial supply agreement. This process is known in the industry as "fill and finish". KALBITOR in its "filled and finished" form has additional refrigerated shelf-life of four years over its drug substance form. Our commercial supply agreement with JHS runs through 2018 and may be terminated with two years prior notice by either party.

Our current inventory of “filled and finished” drug product is sufficient to meet anticipated KALBITOR market demand through 2017. In addition, our current inventory of unfilled drug substance is sufficient to meet anticipated KALBITOR market demand through 2021.

In 2013, JHS received a Warning Letter from the FDA with respect to matters not specifically associated with KALBITOR. JHS has worked to resolve the issues raised by the FDA. If JHS fails to operate according to FDA regulations, the FDA could impose restrictions on JHS’s manufacturing capabilities, which could adversely affect future “fill and finish” activities with respect to KALBITOR.

KALBITOR Outside of the United States

In certain markets outside of the United States, we work with international partners to seek approval and commercialize ecallantide for HAE.

CVie – In 2013, we entered into an exclusive license agreement with CVie, a subsidiary of Lee’s Pharmaceutical Holdings Ltd., to develop and commercialize KALBITOR for the treatment of HAE and other angioedema indications in China. This agreement was amended in 2014 to include the territories of Korea, Taiwan and Japan.

Under the terms of the agreement, we received a $1.0 million upfront payment and are eligible to receive future development, regulatory and sales milestones. We are also eligible to receive royalties on net product sales. CVie is solely responsible for all costs associated with development, regulatory activities, and the commercialization of KALBITOR in its licensed territories. In addition, CVie will purchase drug product from us on a cost-plus basis for commercial supply. CVie is presently evaluating regulatory and commercial options for its territories.

Pint – In 2013, we entered into an exclusive license agreement with Novellus to develop and commercialize KALBITOR for the treatment of HAE and other angioedema indications in select countries in Latin America, including Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. In 2014, this agreement was assigned to Pint and amended to include the territories of Algeria, Tunisia, Morocco and South Africa.

Under the terms of the agreement, we have received certain upfront payments and are eligible to receive future regulatory and sales milestones. We are also eligible to receive royalties on net product sales. Pint is solely responsible for all costs associated with development, regulatory activities, and the commercialization of KALBITOR in its licensed territories. In addition, Pint will purchase drug product from us on a cost-plus basis for commercial supply. Pint is presently evaluating regulatory and commercial options for its territories.

DX-2930 for Prophylactic Treatment of HAE

Based on our knowledge of HAE and the kallikrein-kinin biological pathway, we are developing DX-2930, a fully human monoclonal antibody, that is a potent and specific inhibitor of plasma kallikrein for the prophylactic treatment of HAE and potentially other PKM disorders. DX-2930 is administered subcutaneously, has a half-life that could enable less frequent dosing than currently available prophylactic HAE therapies.

Preclinical pharmacokinetic, pharmacodynamic and tolerability studies have demonstrated that DX-2930 has relevant activity in animal models. We completed a Phase 1a clinical study evaluating the safety and tolerability of a single subcutaneous administration of DX-2930. The safety, tolerability, and kallikrein inhibition results of this Phase 1a study supported the advancement of DX-2930 into a Phase 1b study.

The Phase 1b study was a multi-center, randomized, double-blind, placebo-controlled, multiple ascending dose study designed to assess the safety, tolerability and pharmacokinetics of DX-2930 in HAE patients. An analysis of HAE attack rate was also conducted following a pre-specified statistical analysis plan. A total of 37 subjects were randomized to active drug or placebo in a 2:1 ratio across 4 dosing groups of 30, 100, 300, or 400 mg. Each subject received two doses of DX-2930 or placebo, separated by 14 days, and was followed for 15 weeks after the second dose.

In the Phase 1b study, DX-2930 was well tolerated at all dose levels. There were no deaths or subject discontinuations due to an adverse event. There were no serious adverse events in subjects treated with DX-2930 and no evidence of dose-limiting toxicity. There was no safety signal in treatment-emergent adverse events, clinical laboratory results, vital signs, or electrocardiograms. Subcutaneous injection was well tolerated.

Pharmacokinetic results demonstrated that DX-2930 has linear, dose-dependent exposure and a mean elimination half-life of approximately 14 days across all dose groups studied. Pharmacodynamic results from two different exploratory biomarker assays confirmed ex vivo plasma kallikrein inhibition in a dose- and time-dependent manner.

Primary proof-of-concept efficacy analyses were based on subjects in the 300 mg, 400 mg, and placebo dose groups who reported having at least 2 attacks in the 3 months prior to study entry. During the pre-specified, primary efficacy interval of 6 weeks (from days 8 to 50; corresponding to peak drug level), the HAE attack rate (adjusted for baseline attacks) was 0 in the 300 mg group and 0.045 attacks per week in the 400 mg group, compared to 0.37 attacks per week in the placebo group. This resulted in a 100% attack reduction for the 300 mg dose group as compared to placebo (P<0.0001), and an 88% attack reduction for the 400 mg dose group as compared to placebo (P=0.005). During this primary efficacy interval, 100% of subjects in the 300 mg group (P=0.026) and 82% of subjects in the 400 mg group (P=0.030) were attack-free compared with 27% of subjects in the placebo group.

We have received both Breakthrough Therapy and Fast Track designations from the U.S. Food and Drug Administration (FDA) for further investigation of DX-2930 for HAE. DX-2930 has also received Orphan Drug status in the U.S. and European Union (EU).

Based on recent discussions with the FDA, we have been informed that one additional clinical study with supportive results will be required to support our BLA filing. We plan to initiate this Phase 3 trial during the fourth quarter of 2015.

We have established a supply chain that consists of third party vendors to manufacture, test and transport DX-2930. All third party manufacturers involved in the DX-2930 manufacturing process are required to comply with cGMPs. DX-2930 drug substance is manufactured in Germany by Rentschler Biotechnologie GmbH (Rentschler). Our supply agreement with Rentschler to manufacture drug substance runs through 2017, with future orders extending through 2018.

DX-2930 drug substance is filled into the final form of drug product at a commercial "fill and finish" contract development and manufacturing organization, under a commercial supply agreement. Our commercial supply agreement runs through 2020.

PIPELINE DEVELOPMENT PROGRAMS

We are expanding upon our expertise in the plasma kallikrein pathway and have an evolving pipeline of fully human monoclonal antibody drug candidates that we believe have the potential to address various orphan diseases. Antibodies are well suited for treating serious chronic diseases as they typically require less frequent administration and have high-target specificity. As a class, therapeutic antibodies are generally well-tolerated and carry a low risk of toxicity.

DX-2930 for Diabetic Macular Edema (DME)

DME and diabetic retinopathy complex are the most common eye diseases in diabetics and are the leading causes of blindness in Americans. Diabetic retinopathy may result in swollen and leaky retinal blood vessels. In DME fluid accumulates in the center of the macula, the part of the eye with greatest visual acuity, resulting in loss of central vision.

A number of treatment options are available to patients with DME and many of these inhibit the activity of vascular endothelial growth factor (VEGF). However, a significant number of patients do not respond to anti-VEGF treatment which means there remains a need for non-VEGF pathway treatment options.

There is a growing body of evidence to suggest that plasma kallikrein plays a role in the development of the vascular leak associated with DME. Importantly, plasma kallikrein exerts its effect independently of the VEGF mediated pathology. As such, plasma kallikrein represents an attractive therapeutic target for those patients that are refractory to current VEGF therapies. Based on this research, we are evaluating DX-2930 for the treatment of DME. We expect to file an IND for this indication in 2016.

DX-2507 for Antibody-Mediated Autoimmune Diseases

In many autoimmune disorders, immunoglobulin (IgG) autoantibodies are the causal agent of disease. Current treatment strategies for these disorders include immune suppression, infusion of high concentration intravenous immunoglobulin (IVIG) and plasmapheresis - all intended to reduce the level of pathologic antibodies. The FcRn receptor recycles IgG and therefore plays a critical role in maintaining IgG levels. We believe that antagonism of FcRn may represent an alternative approach to treatment of diseases caused by pathologic IgG.

We are developing DX-2507, a fully human monoclonal antibody to human-FcRn, as a potential alternative treatment for autoimmune diseases caused by a pathologic IgG. Examples include myasthenia gravis, immune thrombocytopenia, autoimmune hemolytic anemia, Guillain-Barre syndrome, Factor VIII inhibitor syndrome and pemphigus vulgaris. We plan to file an IND for DX-2507 in 2016.

DX-4012 as an Anti-Thrombotic Therapy

Thrombosis, the abnormal clotting of blood within the circulatory system, is a major cause of death, disability, and hospitalization. Currently approved antithrombotic therapies, while effective, are known to come with the risk of bleeding because of their anticoagulant properties. In recent years, it has been demonstrated that Factor XII and Factor XI, which initiate the intrinsic pathway of coagulation, contribute to thrombus formation but are of little importance to maintaining hemostasis. Patients who are deficient in Factor XII do not exhibit an abnormal bleeding phenotype, leading to the conclusion that targeting Factor XII may be an effective antithrombotic therapy that would not carry the risk of bleeding.

DX-4012 is a fully human monoclonal antibody to activated Factor XII (Factor XIIa) which has demonstrated anti-thrombotic activity in various animal models, without evidence of increased bleeding risk. Current areas of interest are extracorporeal membrane oxygenation (ECMO), lupus anticoagulant syndrome, and as a potential alternative treatment for patients who require prolonged antithrombotic therapy but cannot tolerate conventional anticoagulation.

LICENSING AND FUNDED RESEARCH PORTFOLIO

We have leveraged our proprietary phage display technology and libraries through our LFRP licenses and collaborations. Since inception, we have recognized approximately $230 million of revenue through these LFRP licenses, primarily related to license fees, milestones and royalties.

LFRP Product Development

Our LFRP consists of multiple revenue-generating product candidates in clinical development and one approved product, all of which were identified using our phage display technology. Our licensees and collaborators also have additional product candidates in various stages of preclinical development and are responsible for all costs associated with development and commercialization of these product candidates.

The chart and program information below, which is based on information publicly disclosed by our licensees, provide a summary of the status of clinical stage product candidates in our LFRP for which we are eligible to receive future milestones and/or royalties, if these candidates are developed and commercialized. Certain product candidates are in multiple clinical trials for various indications.



Licensee	Compound	Target	Indication	Status
Lilly	CYRAMZA® (ramucirumab) (IMC-1121B)	VEGFR-2/KDR	Gastric cancer (REGARD)	Commercialized
			Gastric cancer (RAINBOW)	Commercialized
			Non-small cell lung cancer (NSCLC) (REVEL)	Commercialized
			Colorectal cancer (RAISE)	Commercialized
			Hepatocellular carcinoma (REACH-2)	Phase 3
			Gastric cancer (RAINFALL)	Phase 3
			Urothelial cancer (RANGE)	Phase 3
			NSCLC (RELAY)	Phase 3
			Various indications	Phase 2
			Solid tumors	Phase 1
Lilly	Necitumumab (IMC-11F8)	EGFR	Squamous NSCLC	Completed Filing
Lilly	Necitumumab (IMC-11F8)	EGFR	Various indications	Phase 2
Amgen	Trebananib (AMG 386)*	Ang-1/Ang-2	Ovarian cancer	Phase 3
			Various indications	Phase 2
			Various indications	Phase 1
Merck-Serono	Avelumab	PD-L1	NSCLC	Phase 3
			Metastatic merkel cell carcinoma	Phase 2
			Solid tumors	Phase 1
Biogen Idec	ANTI-LINGO-1 (BIIB 033)	LINGO-1	Acute optic neuritis (RENEW)	Phase 2
Biogen Idec	ANTI-LINGO-1 (BIIB 033)	LINGO-1	Multiple sclerosis (SYNERGY)	Phase 2
Merrimack	MM-121	ErbB3	Breast cancer	Phase 2
			Ovarian cancer	Phase 2
			Metastatic NSCLC	Phase 2
			Various indications	Phase 1
Merrimack	MM-141	IGF-1R & ErbB3	Pancreatic cancer	Phase 2
Merrimack	MM-141	IGF-1R & ErbB3	Hepatocellular carcinoma	Phase 1
Baxter	Anti-MIF	MIF	Colorectal cancer	Phase 2
Baxter	Anti-MIF	MIF	Solid tumors	Phase 1
Athera	PC-mAb	Phosphorylcholine	Cardiovascular Disease	Phase 1
Lilly	LY3076226	FGFR3	Metastatic cancers	Phase 1
Bayer	Undisclosed	Undisclosed	Undisclosed	Phase 1

*indicates future milestones only

LFRP Phase 3 Product Candidates

CYRAMZA (ramucirumab) (IMC-1121B)

CYRAMZA is a human monoclonal antibody being developed by Lilly. CYRAMZA is a VEGF Receptor 2 antagonist that specifically binds VEGF Receptor 2 and blocks binding of VEGF receptor ligands VEGF-A, VEGF-C, and VEGF-D. VEGF Receptor 2 is an important mediator in the VEGF pathway. In an in vivo animal model, ramucirumab inhibited angiogenesis. Angiogenesis is a process by which new blood vessels form to supply blood to normal healthy tissues as well as tumors, enabling a cancer to grow. CYRAMZA is being studied for use as a treatment in several oncology indications. The following are the Lilly CYRAMZA development programs that are the basis for an approved indication, a regulatory submission or recently completed or ongoing Phase 3 clinical trial:

Gastric (stomach) cancer

In 2014, Lilly received FDA approval of and launched CYRAMZA to treat advanced gastric cancer after prior chemotherapy, both as a single-agent treatment and as a combination therapy with paclitaxel. These specific FDA-approved indications, based

on Lilly’s Phase 3 REGARD and RAINBOW studies, respectively, are for patients with advanced or metastatic gastric or gastroesophageal junction (GEJ) adenocarcinoma with disease progression on or after prior fluoropyrimidine- or platinum-containing chemotherapy. CYRAMZA is the first FDA-approved product for advanced gastric cancer after prior chemotherapy. The REGARD and RAINBOW trials each demonstrated statistically significant improvements in the primary endpoint of overall survival (OS) and secondary endpoint of progression-free survival (PFS) in the CYRAMZA-containing arm compared to the control arm

In 2014, Lilly also received marketing authorization from the European Commission for CYRAMZA, in adults, in combination with paclitaxel, for the treatment of advanced gastric or GEJ adenocarcinoma following prior chemotherapy and as a monotherapy in this setting for patients for whom treatment in combination with paclitaxel is not appropriate.

In March 2015, Lilly received marketing authorization from the Japanese Ministry of Health, Labour and Welfare for CYRAMZA to treat unresectable, advanced or recurrent gastric cancer.

In 2015, Lilly initiated a first-line Phase 3 study of CYRAMZA in combination with capecitabine and cisplatin in subjects with metastatic gastric or GEJ adenocarcinoma. This trial is called RAINFALL. According to ClinicalTrials.gov, the estimated primary completion date for this study is March 2017.

Non-small cell lung cancer

In 2014, Lilly received FDA approval of CYRAMZA plus docetaxel for patients with second-line non-small cell lung cancer (NSCLC). This approval is for CYRAMZA in combination with docetaxel for the treatment of patients with metastatic NSCLC with disease progression on or after platinum-based chemotherapy.

With this approval, CYRAMZA became the first treatment approved in the U.S. for use in combination with docetaxel in the second-line treatment of metastatic NSCLC, including nonsquamous and squamous histologies.

This approval was based on Lilly’s Phase 3 REVEL study, which showed a statistically significant improvement in the primary endpoint of OS in the CYRAMZA-plus-docetaxel arm compared to the control arm of placebo plus docetaxel. It also showed a statistically significant improvement in PFS in the CYRAMZA-plus-docetaxel arm versus the control arm. The REVEL trial included patients with nonsquamous and squamous forms of NSCLC.

Lilly has submitted regulatory filings for CYRAMZA in NSCLC in the EU and Japan.

Additionally, Lilly has initiated a first-line Phase 3 study of CYRAMZA in combination with erlotinib in patients with epidermal growth factor receptor (EGFR) mutation-positive metastatic NSCLC. This trial is called RELAY. According to ClinicalTrials.gov, the start date for this trial was May 2015, and the estimated primary completion date is August 2018.

Colorectal cancer

In April 2015, Lilly received FDA approval for CYRAMZA in combination with folinic acid, 5-flurouracil and irinotecan (FOLFIRI) for the treatment of patients with second-line metastatic colorectal cancer (mCRC) whose disease has progressed on a first-line bevacizumab-, oxaliplatin- and fluoropyrimidine-containing regimen. Additionally, Lilly has submitted regulatory filings for CYRAMZA in mCRC in the EU and Japan.

This approval is based on Lilly’s Phase 3 RAISE study which showed a statistically significant improvement in the primary endpoint of OS in the CYRAMZA-plus-FOLFIRI arm compared to the control arm. It also showed a statistically significant improvement in PFS in the CYRAMZA-plus-FOLFIRI arm versus the control arm.

Hepatocellular carcinoma

Lilly has completed a randomized, double-blind Phase 3 clinical trial of CYRAMZA plus best supportive care (BSC) versus placebo plus BSC as second-line treatment in patients with hepatocellular carcinoma (HCC), also known as liver cancer, after first-line therapy with sorafenib. The REACH trial did not meet its primary endpoint; overall survival favored the CYRAMZA arm but was not statistically significant. Encouraging single-agent CYRAMZA activity was observed, with meaningful improvements in key secondary endpoints of progression-free survival, overall response rate and time to progression. Although the REACH study did not achieve statistical significance for survival, Lilly is encouraged by the efficacy seen overall, especially in specific subpopulations. In a pre-specified analysis, patients with an elevated baseline of alpha-fetoprotein (AFP) ≥400 ng/mL achieved a survival improvement greater than three months.

Based on these results, Lilly has initiated a second-line Phase 3 study of CYRAMZA in HCC in patients with elevated baseline AFP. According to ClinicalTrials.gov, the start date of this trial was July 2015, and the estimated primary completion date is October 2017.

Urothelial Cancer

Lilly has initiated a Phase 3 clinical trial of CYRAMZA plus docetaxel in patients with urothelial cancer. This trial is called RANGE. In urothelial cancer, malignant cells form in the urothelium, a layer of tissue that lines the bladder, urethra, ureters, and renal pelvis. It is much more common for cancer to begin in the urothelial of the bladder than at any of the other sites, and bladder cancer accounts for the vast majority of all urothelial carcinoma. According to ClinicalTrials.gov, the start date of this trial was July 2015, and the estimated primary completion date is January 2017.

In addition, CYRAMZA is in multiple earlier-stage clinical trials in various tumor types.

Necitumumab (IMC-11F8)

Necitumumab is a human monoclonal antibody being developed by Lilly that is designed to block the ligand binding site of the human epidermal growth factor receptor (EGFR). Activation of EGFR has been correlated with malignant progression, induction of angiogenesis and inhibition of apoptosis or cell death.

Necitumumab is being studied for use as a treatment in squamous non-small cell lung cancer, or NSCLC. Lilly has completed a randomized, open-label Phase 3 clinical trial, referred to as SQUIRE, for necitumumab in combination with gemcitabine-cisplatin chemotherapy versus gemcitabine-cisplatin chemotherapy alone, for first-line squamous NSCLC. In 2013, Lilly announced that SQUIRE met its primary endpoint of increased overall survival. Lilly presented detailed data from the SQUIRE study at the ASCO annual meeting in 2014 and has completed regulatory submissions for necitumumab in first line squamous NSCLC in the U.S. and EU. In the U.S., Lilly anticipates FDA action on necitumumab in late 2015.

Necitumumab is also in earlier-stage clinical trials for other indications.

Trebananib (AMG 386)

Amgen Inc. (Amgen) is developing trebananib, a peptibody that inhibits the interaction between the endothelial cell-selective Tie2 receptor and its ligands angiopoietin-1 and -2 (Ang1 and Ang2). By inhibiting this interaction, Amgen believes trebananib could interrupt angiogenesis, which is important to tumor cell growth.

Trebananib is being studied in one Phase 3 trial referred to as TRINOVA-2. TRINOVA-2 is a randomized, double-blind study evaluating whether trebananib plus pegylated liposomal doxorubicin (PLD) is superior to placebo plus PLD in women with recurrent partially platinum sensitive or resistant epithelial ovarian, primary peritoneal or fallopian tube cancer.

Trebananib is also in multiple Phase 2 clinical trials in various tumor types.

Avelumab (MSB0010718C)

Avelumab is a human monoclonal antibody being co-developed and co-commercialized by Merck-Serono in partnership with Pfizer, that is designed to block the interaction of programmed death ligand 1 (PD-L1) with its receptor PD-1, potentially restoring effective anti-tumor T-cell responses and thereby inhibiting cancer growth.

In April 2015, Merck-Serono and Pfizer reported treatment of the first patient for its Phase 3 clinical trial in non-small cell lung cancer for avelumab. This Phase 3 study, which is part of the Javelin clinical trial program, will enroll approximately 650 patients with stage IIIb/IV non-small cell lung cancer. The Phase 3 trial is an open-label, multi-center, randomized trial with avelumab designed to demonstrate superiority with regard to overall survival of avelumab versus docetaxel in subjects with PD-L1 positive, NSCLC after failure of a platinum-based doublet. The primary endpoint is overall survival in those testing positive for PD-L1, while secondary endpoints will be assessed across the entire study population, regardless of PD-L1 status, and include overall survival; overall response rate, progression-free survival; and patient-reported outcomes.

Avelumab is also in earlier-stage clinical trials for other indications.

LFRP Phase 2 Product Candidates

Anti-LINGO-1 (BIIB 033)

Biogen Idec is developing Anti-LINGO-1 a fully human monoclonal antibody that targets LINGO-1, a protein expressed selectively in the central nervous system that is known to negatively regulate axonal myelination and axonal regeneration. Currently, there is one ongoing and one completed Phase 2 clinical trial.

Acute optic neuritis (AON)

Biogen Idec has completed a Phase 2 clinical trial of Anti-LINGO-1 in AON. This trial is a randomized, double-blind, parallel-group, placebo controlled Phase 2 study in subjects with their first episode of AON. In January 2015, Biogen announced that data from this trial showed that treatment with anti-LINGO-1 showed evidence of biological repair of the visual system and in April 2015, data was presented at the America Academy of Neurology annual meeting. Biogen will provide additional data from this study at European Committee for Treatment and Research in Multiple Sclerosis in October 2015.

Multiple sclerosis (MS)

In 2013, Biogen Idec initiated a randomized, double-blind, parallel-group, dose-ranging Phase 2 clinical trial investigating Anti-LINGO-1 used concurrently with Avonex in subjects with relapsing forms of multiple sclerosis. Data from this study, which is referred to as SYNERGY, are expected in mid-2016.

MM-121 (SAR256212)

Merrimack Pharmaceuticals is developing MM-121, a fully human monoclonal antibody that targets ErbB3, a cell surface receptor implicated in tumor growth and survival. By inhibiting ErbB3 signaling, MM-121 is designed to restore sensitivity, delay resistance and enhance the anti-tumor effect of other drugs when used in combination therapy. Sanofi and Merrimack had entered into an exclusive, global license and collaboration agreement for MM-121 in 2009. In 2014, Merrimack regained worldwide rights to develop and commercialize MM-121. Merrimack is exploring MM-121 in a number of oncology indications. Currently, the most advanced programs are in Phase 2 clinical trials.

Breast cancer

Merrimack has an ongoing randomized, open-label Phase 2 trial of preoperative use of MM-121 with paclitaxel in HER2-negative breast cancer. This study was intended to demonstrate whether the addition of MM-121 with paclitaxel is more effective than treatment of paclitaxel alone when administered as part of the neoadjuvant treatment in HER2-negative locally advanced operable breast cancer patients. In September 2014, Merrimack announced that clinical and biomarker data from their Phase 2 study in ER/PR-positive, HER2-negative metastatic breast cancer showed that patients with high heregulin mRNA levels achieved a statistically significant benefit from combining the novel agent MM-121 with exemestane. Updated data from this biomarker subgroup, representing 45% of patients with metastatic breast cancer, showed a hazard ratio of 0.26 with a p-value of 0.003. Data from this study showed that the addition of MM-121 did not significantly enhance exemestane activity in an unselected metastatic breast cancer population. There was a consistent but modest and tolerable increase in adverse events when MM-121 was combined with exemestane. Further confirmatory studies of MM-121 in breast cancer are being considered.

Ovarian cancer

Merrimack has an ongoing randomized, open-label Phase 2 trial of MM-121 with paclitaxel in platinum resistant or refractory recurrent/advanced ovarian cancers. The estimated primary completion date for this this trial was the fourth quarter of 2014. This study was intended to demonstrate whether the addition of MM-121 with paclitaxel is more effective than treatment of paclitaxel alone in platinum resistant or refractory recurrent/advanced ovarian cancers. Data from this study showed that the addition of MM-121 did not significantly enhance paclitaxel activity in an unselected platinum-resistant ovarian cancer population. A subset of heregulin positive patients (38%) who also had low ErbB2 (HER2) levels, however, responded poorly to paclitaxel alone and had improved progression-free survival with the addition of MM-121. There was a consistent but modest and tolerable increase in adverse events when MM-121 was combined with paclitaxel. Further confirmatory studies of MM-121 in ovarian cancer are being considered.

Non-small cell lung cancer

In February 2015, Merrimack initiated a global, open-label, biomarker-selected, randomized Phase 2 clinical trial of MM-121, in combination with docetaxel or pemetrexed versus docetaxel or pemetrexed alone in patients with heregulin positive, locally advanced or metastatic NSCLC. The primary endpoint of the trial is progression-free survival. Secondary endpoints include overall survival, objective response rate, safety and tolerability.

MM-141

Merrimack is developing MM-141, a fully human monoclonal antibody that acts as a tetravalent inhibitor of PI3K/AKT/mTOR, which is a major pro-survival pathway tumor cells use as a resistance mechanism to anti-cancer therapies.

Pancreatic cancer

In April 2015, Merrimack initiated a Phase 2 clinical trial of MM-141 in combination with nab-paclitaxel and gemcitabine in front-line pancreatic cancer. Additionally, in 2014, Merrimack obtained orphan drug designation in the United States for MM-141 for the treatment of pancreatic cancer.

BAX69 (anti-MIF)

Baxalta, a wholly owned subsidiary of Baxter International Inc., is developing BAX69, a fully human, recombinant anti-MIF (anti-macrophage migration inhibitory factor) monoclonal antibody. The anti-MIF antibody targets the MIF protein, a protein that induces inflammatory responses in the body and that has also been shown to influence the growth and spread of tumors. By inhibiting the cancer-promoting effects of MIF, the anti-MIF antibody may be capable of restricting the growth of tumors.

Metastatic colorectal cancer

In May 2015, Baxter initiated a Phase 2a clinical trial of BAX69 in combination with 5-FU/leucovorin or panitumumab versus standard of care in subjects with metastatic colorectal cancer. According to ClinicalTrials.gov, the estimated primary completion date for this trial is May 2017.

Cross-Licensed Technology

The use of our antibody library that is part of the LFRP involves technology that we have cross-licensed with other biotechnology companies, including Affimed Therapeutics AG, Affitech A/S, Biosite, Inc. (now owned by Alere Inc.), Cambridge Antibody Technology Limited or CAT (now known as MedImmune Limited and owned by AstraZeneca), Domantis Limited (a wholly owned subsidiary of GlaxoSmithKline), Genentech, Inc. and XOMA Ltd. Under the terms of our cross-license agreement with CAT, we are required to make milestone and low single-digit royalty payments to CAT in connection with antibody products developed and commercialized by our licensees. These payments are passed through to CAT from our licensees. None of our other cross-license agreements contain financial obligations applicable to our LFRP licensees or collaborators.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2015 and 2014

Revenues. Total net revenues for the three months ended September 30, 2015 (the 2015 Quarter) were $24.7 million, compared with $22.0 million for the three months ended September 30, 2014 (the 2014 Quarter).

Product Sales. We are commercializing KALBITOR in the United States for treatment of acute attacks of HAE. We sell KALBITOR to our distributors, and we recognize revenue when title and risk of loss have passed to the distributor, typically upon delivery. Under certain arrangements we have provided our distributors with extended payment terms. In these circumstances, revenue is not recognized until collectability is reasonably assured. Due to the specialty nature of KALBITOR, the limited number of patients and limited return rights of our distributors, we anticipate that distributors will carry inventory that is in line with their forecasted business needs. Although fluctuations can occur due to the nature of acute HAE attacks, the aggregate amount of inventory held by our distributors generally does not exceed 60 days of anticipated demand. Utilization rates for all patients continue to vary significantly over time based on fluctuations in the number of HAE attacks and the consistency with which these patients treat those attacks with KALBITOR.

We record product sales allowances and accruals related to trade prompt-pay discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances. Product sales, net of discounts and allowances, were as follows:



	Three Months Ended September 30,
	2015			2014
	(in thousands)
Gross product sales	$	19,750		$	22,561

Prompt pay and other discounts	$	(920	)	$	(1,050	)
Government rebates and chargebacks	(966		)	(1,072		)
Returns	(57		)	(165		)
Product sales allowances	$	(1,943	)	$	(2,287	)
Product sales, net	$	17,807		$	20,274

Product sales allowances, as a percent of gross product sales	9.8		%	10.1		%

The decrease in net sales between the 2015 Quarter and the 2014 Quarter was due to several factors:


•	Sales represented by patient demand units decreased during the 2015 Quarter by approximately $3.6 million, an 18% decrease from the 2014 Quarter. This change reflects variable KALBITOR utilization rates for certain individual patients who experience and treat frequent HAE attacks.


•	There were no substantial distributor channel adjustments during the 2015 and 2014 Quarters.


•	A KALBITOR price increase and lower gross to net sales adjustments increased the 2015 Quarter’s net sales by approximately $1.2 million.

Development and License Fees. We derive revenues from licensing, development and milestone fees from our licensees and collaborators, including our LFRP, in amounts that fluctuate from period to period due to the timing of the clinical activities of our collaborators and licensees. This revenue was $1.4 million in the 2015 Quarter compared to $1.0 million in the 2014 Quarter.

Royalty Revenue. Royalty revenue for the 2015 Quarter totaled $5.6 million based on Lilly’s sales of CYRAMZA compared to $684,000 in the 2014 Quarter . The 2014 Quarter was the first period in which we recorded royalty revenue. For royalties recognized related to CYRAMZA, we are contractually entitled to receive a royalty report from Lilly subsequent to each quarter end. We have recognized royalty revenue using an estimate of the royalties earned for the quarter based on Lilly’s reported sales of CYRAMZA.

Cost of Product Sales and Royalties. Cost of product sales includes the cost of the manufactured product and the cost of testing, filling, packaging and distributing KALBITOR, as well as a royalty due on net sales of KALBITOR. We incurred $784,000 and $1.4 million of costs associated with product sales during the 2015 Quarter and the 2014 Quarter, respectively. Costs in the 2015 Quarter are net of a $363,000 reversal of charges accrued in the first quarter of 2015 related to discontinued technology transfer for an alternative drug product manufacturer.

Cost of royalties consists of pass-through fees under our cross license agreement related to royalties that are payable based on product sales by our LFRP licensees. We recorded $2.8 million and $342,000 for cost of royalties in the 2015 Quarter and the 2014 Quarter, respectively.

Research and Development. Our research and development expenses are summarized as follows:



	Three Months Ended September 30,
	2015		2014
	(in thousands)
DX-2930 and other research and development	$	14,126	$	6,261
KALBITOR medical support and development	927		1,943
LFRP license fees and development and regulatory milestone pass-throughs	571		64
Total	$	15,624	$	8,268

Our research and development expenses arise primarily from compensation and other related costs for our personnel dedicated to research, development, medical and pharmacovigilance activities, costs of post-approval studies and commitments and KALBITOR life cycle management, as well as fees paid and costs reimbursed to outside parties to conduct research and clinical trials.

The change in research and development expenses during the 2015 Quarter compared to the 2014 Quarter was primarily due to increased costs associated with the development of DX-2930 and expenses for other pipeline development programs.

Selling, General and Administrative. Our selling, general and administrative expenses consist primarily of the sales and marketing costs of commercializing KALBITOR, costs of our management and administrative staff, as well as expenses related to business development, protecting our intellectual property, administrative occupancy, professional fees and the reporting requirements of a public company. Selling, general and administrative expenses for the 2015 Quarter and the 2014 Quarter were $14.0 million and $10.1 million, respectively, including stock based compensation expense of $4.2 million and $1.2 million, respectively.

Included in selling, general and administrative expenses were costs for KALBITOR patient support services performed by our distributors of $174,000 and $185,000 for the 2015 Quarter and the 2014 Quarter, respectively.

Interest and Other Expense. Interest expense for the 2015 Quarter was $3.4 million, primarily from our Loan with HC Royalty. The Loan, which had a principal balance of $84.1 million, was repaid in full during August 2015. For financial reporting purposes, our $84.1 million principal repayment was recorded as an $82.2 million debt extinguishment and a $1.9 million extinguishment loss associated with discounts from the debt issuance that had not been accreted to principal prior to repayment. Previously, these charges were accreted to the principal balance over the expected term of the Loan, which was scheduled to mature in August 2018.

For the 2014 Quarter, interest expense of $2.7 million was calculated using the effective interest rate method which was approximately 12.5% per annum.

Nine Months Ended September 30, 2015 and 2014

Revenues. Total net revenues for the nine months ended September 30, 2015 (the 2015 Period) were $71.5 million, compared with $55.7 million for the nine months ended September 30, 2014 (the 2014 Period).



	Nine Months Ended September 30,
	2015			2014
	(in thousands)
Gross product sales	$	57,262		$	54,878

Prompt pay and other discounts	$	(2,739	)	$	(2,608	)
Government rebates and chargebacks	(3,023		)	(2,672		)
Returns	80			(235		)
Product sales allowances	$	(5,682	)	$	(5,515	)
Product sales, net	$	51,580		$	49,363

Product sales allowances, as a percent of gross product sales	9.9		%	10.0		%

The increase in net sales between the 2015 Period and the 2014 Period was due to several factors:


•	Sales represented by patient demand units decreased during the 2015 Period by approximately $1.2 million, a 2% decrease from the 2014 Period. This change reflects variable KALBITOR utilization rates for certain individual patients who experience and treat frequent HAE attacks.


•	While there were no substantial distributor channel adjustments during the 2015 Period, adjustments that occurred during the 2014 Period reduced the comparable 2014 Period net sales by approximately $1.0 million.


•	A KALBITOR price increase and lower gross to net sales adjustments increased the 2015 Period's net sales by approximately $2.4 million.

Development and License Fees. We derive revenues from licensing, development and milestone fees from our licensees and collaborators, including our LFRP, in amounts that fluctuate from period to period due to the timing of the clinical activities of our collaborators and licensees. This revenue was $6.6 million in the 2015 Period compared to $5.6 million in the 2014 Period.

Royalty Revenue. Royalty revenue for the 2015 Period totaled $13.3 million based on Lilly’s sales of CYRAMZA compared to $684,000 in the 2014 Period. The 2014 Period was the first period in which we recorded royalty revenue. For royalties recognized related to CYRAMZA, we are contractually entitled to receive a royalty report from Lilly subsequent to each quarter end. We have recognized royalty revenue using an estimate of the royalties earned for the quarter based on Lilly’s reported sales of CYRAMZA.

Cost of Product Sales and Royalties. Cost of product sales includes the cost of the manufactured product and the cost of testing, filling, packaging and distributing KALBITOR, as well as a royalty due on net sales of KALBITOR. We incurred $4.3 million costs associated with product sales during the 2015 Period, including $686,000 associated with the discontinuation of technology transfer for an alternative drug product manufacturer of which $400,000 had previously been capitalized as inventory. Costs associated with product sales during the 2014 Period were $3.2 million.

Cost of royalties consists of pass-through fees under our cross license agreement related to royalties that are payable based on product sales by our LFRP licensees. We recorded $6.7 million for cost of royalties in the 2015 Period compared to $342,000 in the 2014 Period.

Research and Development. Our research and development expenses are summarized as follows:



	Nine Months Ended September 30,
	2015		2014
	(in thousands)
DX-2930 and other research and development	$	34,480	$	15,729
KALBITOR medical support and development	3,765		5,334
LFRP license fees and development and regulatory milestone pass-throughs	2,131		2,530
Total	$	40,376	$	23,593

The change in research and development expenses during the 2015 Period compared to the 2014 Period was primarily due to increased costs associated with the development of DX-2930 and expenses for other pipeline development programs.

Selling, General and Administrative. Our selling, general and administrative expenses consist primarily of the sales and marketing costs of commercializing KALBITOR, costs of our management and administrative staff, as well as expenses related to business development, protecting our intellectual property, administrative occupancy, professional fees and the reporting requirements of a public company. Selling, general and administrative expenses for the 2015 Period and the 2014 Period were $39.2 million and $30.2 million, respectively, including stock based compensation expense of $9.2 million and $3.3 million, respectively.

Included in selling, general and administrative expenses were costs for KALBITOR patient support services performed by our distributors of $475,000 and $548,000 for the 2015 Period and the 2014 Period, respectively.

Interest and Other Expense. Interest expense for the 2015 Period totaled $8.8 million, primarily from our Loan with HC Royalty. The Loan, which had a principal balance of $84.1 million, was repaid in full in August 2015. For financial reporting purposes, our $84.1 million principal repayment was recorded as an $82.2 million debt extinguishment and a $1.9 million extinguishment loss associated with discounts from the debt issuance that had not been accreted to principal prior to repayment. Previously, these charges were accreted to the principal balance over the expected term of the Loan, which was scheduled to mature in August 2018.

For the 2014 Period, interest expense of $8.2 million was calculated using the effective interest rate method which was approximately 12.5% per annum.

Liquidity and Capital Resources



	September 30, 2015		December 31, 2014
	(in thousands)
Cash and cash equivalents	$	116,687	$	19,392
Short-term investments	191,698		165,260
Total cash, cash equivalents and investments	$	308,385	$	184,652

The following table summarizes our cash flow activity for the nine months ended September 30, 2015 and 2014:



	2015			2014
	(in thousands)
Net cash used in operating activities	$	(20,770	)	$	(5,163	)
Net cash used in investing activities	(28,503		)	(114,718		)
Net cash provided by financing activities	146,568			81,807
Net increase (decrease) in cash and cash equivalents	$	97,295		$	(38,074	)

We require cash to fund our operating activities, make capital expenditures, acquisitions and investments. Through September 30, 2015, we have funded our operations through the sale of equity securities, the incurrence of debt, and from product sales revenues, royalties and development and license fees. Our excess funds are currently invested in short-term investments primarily consisting of United States Treasury notes and bills and money market funds backed by the United States Treasury.

Operating Activities

During the 2015 Period, the principal use of cash in our operations was to fund our net loss of $26.7 million. Of this net loss, certain costs were non-cash charges, such as stock-based compensation of $13.6 million and depreciation and amortization costs of $1.5 million. In addition to non-cash charges, we also had net cash out flows due to changes in working capital, including an increase in inventory of $7.2 million, payments related to discounts and interest converted to principal on the Loan with HC Royalty of $6.5 million and a decrease in deferred revenue of $1.2 million, partially offset by an increase in accounts payable and accrued expenses of $3.8 million and a decrease in other current assets of $3.0 million.

During the 2014 Period, the principal use of cash in our operations was to fund our net loss of $9.6 million. Of this net loss, certain costs were non-cash charges, such as stock-based compensation of $5.3 million, depreciation and amortization costs of $1.1 million, and non-cash interest expense of $487,000. In addition to non-cash charges, we also had net cash out flows due to changes in other operating assets and liabilities, including an increase in other current assets of $2.9 million, which was partially offset by a decrease in inventory of $1.1 million.

Investing Activities

Our investing activities for the 2015 Period primarily consisted of the purchase of investments totaling $236.2 million offset by the sale and maturity of investments totaling $209.0 million, as well as the purchase of fixed assets totaling $1.3 million.

Our investing activities for the 2014 Period primarily consisted of the purchase of investments totaling $114.6 million, offset by $2.0 million in investment maturity, as well as the purchase of fixed assets totaling $420,000.

Financing Activities

Our financing activities for the 2015 Period consisted of gross proceeds of $229.8 million ($215.8 million net of offering costs) from the sale of 8,510,000 shares of common stock in April 2015 in an underwritten public offering. We repaid in full the $84.5 million principal balance of the Loan with HC Royalty ($75.7 net of in-kind interest added to principal and other financing costs). Additionally, proceeds from the exercise of stock options totaled $6.5 million.

Our financing activities for the 2014 Period primarily consisted of gross proceeds of $85.1 million ($79.7 million net of offering costs) from the sale of common stock in March 2014, as well as proceeds from the exercise of stock options totaling $3.2 million. Repayment of long-term debt for the 2014 Period totaled $931,000.

We expect that existing cash, cash equivalents, and investments, together with anticipated cash flow from product sales, royalties and existing development and license agreements will be sufficient to support our current operations for at least the next twelve months.

We may seek additional funding through our collaborative arrangements and public or private financings. We may not be able to obtain financing on acceptable terms or at all, and we may not be able to enter into additional collaborative arrangements. Arrangements with collaborators or others may require us to relinquish rights to certain of our technologies, product candidates or products. The terms of any financing may adversely affect the holdings or the rights of our stockholders. If we need additional funds and are unable to obtain funding on a timely basis, we would curtail significantly our research, development or

commercialization programs in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

OFF BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements with the exception of operating leases.

Commitments and contingencies

In our Annual Report on Form 10-K for the year ended December 31, 2014, Part II, Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations, under the heading "Contractual Obligations," we described our commitments and contingencies. There were no material changes in our commitments and contingencies during the three and nine months ended September 30, 2015 other than repayment of the Loan with HC Royalty.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

In our Annual Report on Form 10-K for the year ended December 31, 2014, our critical accounting policies and estimates were identified as those relating to revenue recognition, allowance for doubtful accounts, share-based compensation and valuation of long-lived and intangible assets. There have been no material changes to our critical accounting policies from the information provided in our 2014 Annual Report on Form 10-K.

Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk consists primarily of our cash and cash equivalents and short-term investments. We place our investments in high-quality financial instruments, primarily U.S. Treasury notes and bills, which we believe are subject to limited credit risk. We currently do not hedge interest rate exposure. As of September 30, 2015, we had cash, cash equivalents and investments of approximately $308.4 million. Our investments will decline by an immaterial amount if market interest rates increase, and therefore, our exposure to interest rate changes is immaterial. Declines of interest rates over time will, however, reduce our interest income from our investments.

Most of our transactions are conducted in U.S. dollars. We have collaboration and technology license agreements with parties located outside of the United States. Transactions under certain of the agreements between us and parties located outside of the United States are conducted in local foreign currencies. If exchange rates undergo a change of up to 10%, we do not believe that it would have a material impact on our results of operations or cash flows.

Item 4 - CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15(d)-15(e) promulgated under the Securities Exchange Act of 1934). Based on this evaluation, our principal executive officer and principal financial officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control that occurred during our fiscal quarter ended September 30, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1A. – RISK FACTORS

You should carefully consider the following risk factors before you decide to invest in our Company and our business because these risk factors may have a significant impact on our business, operating results, financial condition, and cash flows. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected.

Risks Related to the Proposed Merger

The proposed Merger is subject to a number of conditions precedent, including stockholder approval, the termination or expiration of the applicable waiting period under the HSR Act and the execution of the CVR Agreement, that, if not satisfied or not satisfied in a timely manner, could delay or prevent the consummation of the proposed Merger.

Among other things, the Merger Agreement must be duly adopted by the affirmative vote by the holders of a majority of the outstanding shares entitled to vote on such matters at a stockholders’ meeting duly called and held for such purpose. While we intend to call a special meeting of stockholders to consider and vote on the merger, stockholders could seek to enjoin the meeting. Even if such stockholder meeting is ultimately held, there is no guarantee that our stockholders will approve the proposed Merger by the requisite vote at such meeting, or at all.

In addition, before the proposed Merger may be consummated, any waiting period (or extension thereof) under the HSR Act must have been expired or terminated. There can be no assurance that the regulatory approval described above, or any other regulatory approvals that might be required to consummate the Merger will be obtained and, if obtained, there can be no assurance as to the timing of any approvals, ability to obtain the approvals on satisfactory terms or in the absence of any litigation challenging such approvals. At any time before or after the consummation of the proposed Merger (and notwithstanding the termination of the waiting period under the HSR Act), the U.S. Department of Justice, Federal Trade Commission or any state or non-U.S. governmental entity could take such action, under antitrust laws or otherwise, as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the consummation of the Merger and seeking the divestiture of substantial assets. Private parties may also seek to take legal action under antitrust laws under certain circumstances. If the proposed Merger does not receive, or timely receive, the required regulatory approvals and clearances, or if another event occurs delaying or preventing the proposed Merger, such delay or failure to complete the proposed Merger may create uncertainty or otherwise have negative consequences that may materially and adversely affect our financial condition and results of operations, as well as the price per share for our common stock.

Under the terms of the Merger Agreement, the consummation of the Merger is subject to customary conditions. Satisfaction of certain of the conditions is not within our control, and difficulties in otherwise satisfying the conditions may prevent, delay or otherwise materially adversely affect the consummation of the merger. It is also possible that an event, occurrence, revelation or development of a state of circumstances or facts since the date of the Merger Agreement may have or reasonably be expected to have a material adverse effect (as defined in the Merger Agreement) on Dyax, the non-occurrence of which is a condition to the consummation of the merger. We cannot predict with certainty whether and when any of the required conditions will be satisfied.

The Per Share Merger Consideration will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or results of operations, or changes in the market price of, analyst estimates of, or projections relating to, our common stock. For example, if we experienced an improvement in our business, assets, liabilities, prospects, outlook, financial condition or results of operations prior to the consummation of the proposed Merger, there would be no adjustment to the amount of the Per Share Merger Consideration.

Additionally, although the holders of our common stock are entitled to receive $4.00 in cash per CVR, without interest, upon receipt, prior to December 31, 2019, of approval from the FDA of a biologic license application for DX-2930 (subject to certain conditions as set forth in the CVR Agreement), there is no guarantee that such approval from the FDA will occur prior to December 31, 2019, or at all.

Stockholder litigation could prevent or delay the closing of the proposed Merger or otherwise negatively impact our business and operations.

We may incur additional costs in connection with the defense or settlement of the currently pending and any future stockholder litigation in connection with the proposed Merger. Such litigation may adversely affect our ability to complete the proposed Merger. Such litigation could also have an adverse effect on our financial condition and results of operations.

Termination of the Merger Agreement could negatively impact us

If the Merger is not consummated for any reason, we may be adversely affected and would be subject to a number of risks, including the following:


•	We may experience negative reactions from the financial markets, including negative impacts on our stock price;


•	We may experience negative reactions from our stockholders, partners, clinical investigator and study personnel, customers, licensees, suppliers and employees; and


•	We may be required to pay certain fees and/or costs relating to the proposed Merger, whether or not the proposed Merger is consummated, including, in some cases, a termination fee.

While the proposed Merger is pending, we are subject to business uncertainties and contractual restrictions that could disrupt our business.

Whether or not the proposed Merger is consummated, the proposed Merger may disrupt our current plans and operations, which could have an adverse effect on our business and financial results. The pendency of the Merger may also divert management's attention and our resources from ongoing business and operations and our employees and other key personnel may have uncertainties about the effect of the pending Merger, and the uncertainties may impact our ability to retain, recruit and hire key personnel while the Merger is pending or if it fails to close. We may incur unexpected costs, charges or expenses resulting from the proposed Merger. Furthermore, we cannot predict how our suppliers, customers and other business partners will view or react to the proposed Merger upon consummation. If we are unable to reassure our customers, suppliers and other business partners to continue transacting business with us, our sales, financial condition and results of operations may be adversely affected.

The preparations for integration between Parent Holdco and Dyax have placed and we expect will continue to place a significant burden on many of our employees and on our internal resources. If, despite our efforts, key personnel depart because of these uncertainties and burdens, or because they do not wish to remain with the combined company, our business and results of operations may be adversely affected. In addition, whether or not the proposed Merger is consummated, while it is pending we will continue to incur costs, fees, expenses and charges related to the proposed Merger, which may materially and adversely affect our financial condition and results of operations.

In addition, the Merger Agreement generally requires us to operate in the ordinary course of business consistent with past practice, pending consummation of the merger and also restricts us from taking certain actions with respect to our business and financial affairs without Parent’s consent. Such restrictions will be in place until either the merger is consummated or the Merger Agreement is terminated. These restrictions could restrict our ability to, or prevent us from, pursuing attractive business opportunities (if any) that arise prior to the consummation of the proposed Merger. For these and other reasons, the pendency of the Merger could adversely affect our business and results of operations.

The proposed Merger may impair our ability to attract and retain qualified employees

Uncertainty over the effects of the proposed Merger may make it more difficult to attract and retain qualified employees.

The Merger may interfere with our relationships with clinical investigator and study personnel, customers, suppliers, licensees and other business partners

Uncertainty over the effects of the proposed Merger may make it more difficult to maintain relationships with existing, and enter into relationships with new, clinical investigator and study personnel, customers, suppliers, licensees and other business partners.

In the event that the proposed Merger is not consummated, the trading price of our common stock and our future business and results of operations may be negatively affected.

The conditions to the consummation of the proposed Merger may not be satisfied, as noted above. If the proposed Merger is not consummated, we would remain liable for significant transaction costs, and the focus of our management would have been diverted from seeking other potential strategic opportunities, in each case without realizing any benefits of the proposed Merger. For these and other reasons, not consummating the proposed Merger could adversely affect our business and results of operations. Furthermore, if we do not consummate the proposed Merger, the price of our common stock may decline significantly from the current market price, which we believe reflects a market assumption that the merger will be consummated. Certain costs associated with the proposed Merger have already been incurred or may be payable even if the proposed Merger is not consummated. Further, a failed transaction may result in negative publicity and a negative impression of us in the investment community. Finally, any disruptions to our business resulting from the announcement and pendency of the Merger, including any adverse changes in our relationships with our customers, vendors and employees or recruiting and retention efforts, could continue or accelerate in the event of a failed Merger.

Risks Related To Our Business

We have a history of net losses, expect to incur additional net losses and may never achieve or sustain profitability.

We have incurred net losses on an annual basis since our inception. As of September 30, 2015 we had an accumulated deficit of approximately $573.2 million. We expect to incur additional net losses in 2015 and beyond, as our research, development, preclinical testing, clinical trial, manufacturing and commercial activities continue.

Currently, we generate a significant amount of our revenue from product sales and it is possible that we will never have substantially more product sales revenue. We also generate revenue from royalties, and development and license fees, that we receive under the LFRP. To become profitable, we must either generate higher product sales from the commercialization of KALBITOR and other product candidates, such as DX-2930, increase receipts from our licensees’ product candidates in our LFRP, or reduce costs. It is possible that we will never have sufficient revenues to achieve or sustain future profitability.

Our revenues and operating results have fluctuated significantly in the past, and we expect this to continue in the future.

Our revenues and operating results have fluctuated significantly on a quarterly and year to year basis. We expect these fluctuations to continue in the future. Fluctuations in revenues and operating results will depend on many factors including:


•	the amount of future sales of KALBITOR, gross to net sales adjustments and costs to manufacture and commercialize the product;


•	the rate and consistency of KALBITOR treatments by certain individual patients that experience and treat frequent HAE attacks during a given period and over time;


•	the amount of future sales of KALBITOR ordered by the distribution channel in a given period;


•	the cost and timing of our research and development, manufacturing and commercialization activities;


•	the timing and results of the clinical trials for DX-2930;


•	the establishment of new collaboration and licensing arrangements;


•	the timing, receipt and amount of payments, if any, from current and prospective collaborators and licensees, including royalties and the completion of certain milestones by licensees with product candidates in the LFRP; and


•	the effect of revenue recognition and other generally accepted accounting principles.

Our revenues and costs in any period are not reliable indicators of our future operating results. If the revenues we recognize are less than the revenues we expect for a given fiscal period, then we may be unable to reduce our expenses quickly enough to compensate for the shortfall. In addition, our fluctuating operating results may fail to meet the expectations of securities analysts or investors which may cause the price of our common stock to decline.

Any new biopharmaceutical product candidates we develop, including DX-2930, must undergo rigorous clinical trials which could substantially delay or prevent their development or marketing.

We are developing DX-2930, a fully human monoclonal antibody inhibitor of plasma kallikrein, which is a product candidate to treat HAE prophylactically. Before we can commercialize DX-2930, or any biopharmaceutical product candidate, we must engage in a rigorous clinical trial and regulatory approval process mandated by the FDA and analogous foreign regulatory agencies. This process is lengthy and expensive, and approval is never certain. Positive results from preclinical studies and early clinical trials, such as our recent positive results from our Phase 1b clinical study of DX-2930, do not ensure positive results in late stage clinical trials designed to permit application for regulatory approval. We cannot accurately predict when planned clinical trials will begin or be completed. Many factors affect patient enrollment, including the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, alternative therapies, competing clinical trials and new drugs approved for the conditions that we are investigating. Therefore, our future trials may take longer to enroll patients than we anticipate. Such delays may increase our costs and slow down our product development and the regulatory approval process. Our product development costs will also increase if we need to perform more or larger clinical trials than planned. The occurrence of any of these events will delay our ability to commercialize products, generate revenue from product sales and impair our ability to become profitable, which may cause us to have insufficient capital resources to support our operations.

Products that we, or our collaborators, develop could take a significantly longer time to gain regulatory approval than we expect or may never gain approval. If we, or our collaborators, do not receive these necessary approvals we will not be able to generate substantial product or royalty revenues and may not become profitable. We, or our collaborators, may encounter significant delays or excessive costs in our efforts to secure regulatory approvals. Factors that raise uncertainty in obtaining these regulatory approvals include the following:


•	we, or our collaborators, must demonstrate through clinical trials that a product candidate is safe and effective for its intended use;


•	we have limited experience in conducting the clinical trials necessary to obtain regulatory approval; and


•	data obtained from preclinical and clinical activities are subject to varying interpretations, which could delay, limit or prevent regulatory approvals.

Regulatory authorities may delay, suspend or terminate clinical trials at any time if they believe that the patients participating in trials are being exposed to unacceptable health risks or if they find deficiencies in the clinical trial procedures. There is no guarantee that we will be able to resolve such issues, either quickly, or at all. In addition, our, or our collaborators', failure to comply with applicable regulatory requirements may result in criminal prosecution, civil penalties and other actions that could impair our ability to conduct our business.

Breakthrough Therapy Designation and Fast Track Designation by FDA for DX-2930 may not lead to a faster development or regulatory review or approval process and such designations do not increase the likelihood that DX-2930 will receive marketing approval.

We have received Breakthrough Therapy Designation and Fast Track Designation for DX-2930. Fast Track Designation is for a drug intended for the treatment of a serious or life-threatening condition where the drug candidate demonstrates the potential to address unmet medical needs for this condition. A Breakthrough Therapy is defined as a therapy comprised of a drug candidate that is intended, alone or in combination with one or more other drugs or drug candidates, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drug candidates that have been designated as Breakthrough Therapies, interaction and communication between FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drug candidates designated as Breakthrough Therapies by FDA may also be eligible for accelerated approval.

The receipt of Fast Track Designation and Breakthrough Therapy Designation for DX-2930 may not result in a faster development process, review or approval compared to drug candidates considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by FDA. FDA may withdraw any Fast Track Designation that is granted if it believes that the designation is no longer supported by data from our clinical development program and FDA may later decide that DX-2930 no longer meets the conditions for qualification as a breakthrough therapy.

We depend on third-party manufacturers, including sole source suppliers, to manufacture clinical trial material for DX-2930 and expect to continue to rely on them to meet our commercial supply needs in the event that DX-2930 is approved for sale. We may not be able to maintain these relationships and could experience supply disruptions outside of our control.

The supply chain for sourcing raw materials and manufacturing DX-2930 for clinical trials and for potential future commercial use is a multi-step, international endeavor in which we rely on a third-party contract manufacturer for the supply of bulk drug substance, and on another for the conversion of drug substance into final dosage form. Maintaining and managing this supply chain requires significant financial commitments, experienced personnel and the creation or expansion of numerous third-party contractual relationships. There can be no assurance that we will be able to maintain these relationships on commercially reasonable terms, or at all, in order to support the clinical development and potential approval and commercialization of DX-2930. Furthermore, even if we are able to maintain relationships with our third-party manufacturers, supply disruptions may result from a number of factors including shortages in product raw materials, labor or technical difficulties, regulatory inspections or restrictions, shipping or customs delays or any other performance failure by any third-party manufacturer or supplier on which we rely. Any such supply disruptions could adversely impact the timing of future clinical development and regulatory approvals for DX-2930, may increase our costs and negatively affect our operating results and business prospects.

We may need additional capital in the future and may be unable to generate the funding that we will need to sustain our operations.

We require significant capital for our operations and to develop and commercialize our product candidates. Our future funding requirements will depend on many factors, including:


•	future sales levels of KALBITOR and any other commercial products that we may develop and the profitability of such sales, if any;


•	the timing, progress and cost to develop, obtain regulatory approvals for and commercialize our product candidates;


•	the amount and timing of milestone and royalty payments from our collaborators and licensees related to their progress in developing and commercializing their products;


•	the costs to manufacture, or have third parties manufacture, the materials used in KALBITOR, DX-2930 and any of our other product candidates;


•	competing technological and market developments;


•	maintaining or expanding our existing collaborative and license arrangements and entering into additional arrangements on terms that are favorable to us;


•	the costs of prosecuting, maintaining, defending and enforcing our patents and other intellectual property rights;


•	the amount and timing of additional capital equipment purchases; and


•	the overall condition of the financial markets.

We expect that our existing cash, cash equivalents and short-term investments of approximately $308.4 million as of September 30, 2015, together with anticipated cash flow from product sales, royalties and existing development and license fees will be sufficient to support our current operations for at least the next twelve months. We may, however, need additional funds if our cash requirements exceed our current expectations, if we generate less revenue than we expect or, if we pursue additional product development. We may seek additional funding through collaborative arrangements, public or private financings, or other means. We may not be able to obtain financing on acceptable terms or at all, and we may not be able to enter into additional collaborative arrangements. Arrangements with collaborators or others may require us to relinquish rights to certain of our technologies, product candidates or products. The terms of any financing may adversely affect the holdings or the rights of our stockholders. If we need additional funds and are unable to obtain funding on a timely basis, we would curtail significantly our research, development or commercialization programs in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

We depend on sales of our lead product, KALBITOR, which is approved in the United States for treatment of acute attacks of HAE in patients 12 years and older.

Our product sales depend on KALBITOR in the United States and whether physicians, patients and healthcare payers choose KALBITOR over alternative treatments. The continuing product sales of KALBITOR and our prospects for continuing or increasing product sales and cash flow will depend on multiple factors, including the following:


•	the number of patients with HAE who are diagnosed with the disease and identified to us;


•	the number of patients with HAE who may be treated with KALBITOR;


•	continued acceptance of KALBITOR in the medical community;


•	the frequency of HAE patients' use of KALBITOR to treat their acute attacks of HAE, in particular patients who experience and treat frequent HAE attacks, and the consistency with which these patients treat with KALBITOR over time;


•	HAE patients' ability to obtain and maintain sufficient coverage or reimbursement by third-party payers for the use of KALBITOR;


•	our ability to effectively market and distribute KALBITOR in the United States;


•	competition from other products approved for the treatment of HAE;


•	the maintenance of marketing approval of KALBITOR in the United States and the receipt and maintenance of marketing approval from foreign regulatory authorities;


•	our maintenance of commercial manufacturing and distribution capabilities for KALBITOR through third-parties; and


•	our ability to maintain sufficient inventories to supply KALBITOR for patient use.

If we are unable to continue sales of KALBITOR in the United States and commercialize ecallantide in additional countries or if we are significantly delayed or limited in doing so, our results of operations and business prospects would be adversely affected.

KALBITOR sales are dependent, in part, on the usage by a small number of patients who treat frequent HAE attacks.

Among the spectrum of patients for whom KALBITOR is prescribed, there is a small patient population who experience and treat frequent attacks. Usage by these patients contributes significantly to the revenues generated by KALBITOR. Consequently, a reduction in the number of these patients or the frequency with which they treat attacks may have a material adverse effect on KALBITOR sales and may also result in volatility in our quarterly revenues.

If HAE patients are unable to obtain and maintain reimbursement for KALBITOR from government health administration authorities, private health insurers and other organizations, KALBITOR may be too costly for regular use and our ability to generate product sales would be harmed.

We may not be able to sell KALBITOR on a profitable basis or our profitability may be reduced if we are required to sell our product at lower than anticipated prices or if reimbursement is unavailable or limited in scope or amount. KALBITOR is more expensive than many drug treatments and most patients require some form of third party insurance coverage, patient financial assistance provided by us or by charitable foundations in order to afford its cost. Our future revenues, cash flow and profitability will be adversely affected if HAE patients cannot depend on governmental, private and other third-party payers, such as Medicare and Medicaid in the United States or any other country specific governmental organizations, to defray the cost of KALBITOR. If these entities refuse to provide coverage and reimbursement with respect to KALBITOR or impose restrictions on the level of coverage and reimbursement greater than anticipated, KALBITOR may be too costly for general use, and physicians may not prescribe it.

In addition to potential restrictions on insurance coverage, the amount of reimbursement for KALBITOR may also reduce our ability to profitably commercialize KALBITOR. In the United States and elsewhere, there have been, and we expect there will continue to be, actions and proposals by third party payers, including state and local government payers to control and reduce healthcare costs. In recent years, some states have considered legislation that would control the prices of drugs. State Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid. Managed care organizations continue to seek price discounts and, in some cases, to impose restrictions on the coverage of particular drugs. Government efforts to reduce Medicaid expenses may lead to increased use of managed care organizations by Medicaid programs.

It is possible that we will never have sufficient KALBITOR sales revenue in order to achieve or sustain future profitability.

Because the target patient population of KALBITOR for treatment of HAE is small and has not been definitively determined, we must be able to successfully identify HAE patients and achieve a significant market share in order to achieve or maintain profitability.

The prevalence of HAE patients, which has been estimated at approximately 1 in 50,000 people around the world, has not been definitively determined. There can be no guarantee that any of our programs will be effective at identifying HAE patients. The number of HAE patients in the United States may turn out to be lower than estimated or patients may not utilize treatment with KALBITOR for all or any of their acute HAE attacks. All or any of these factors would adversely affect our results of operations and business prospects.

Competition and technological change may make our potential products and technologies less attractive or obsolete.

We compete in the biopharmaceutical industry, which is characterized by continuous intense competition and rapid technological change. New developments occur and are expected to continue to occur constantly at a rapid pace. Discoveries or commercial developments by our competitors or others may render some or all of our technologies, products or potential products obsolete or non-competitive. In addition, many of our competitors have greater financial resources and experience than we do.

Our business is focused on HAE and other PKM disorders. Therefore, our principal competitors are companies that either are already marketing products in those indications or are developing new products for those indications, as described below.

For the treatment of HAE, our principal competitors include:


•	Manufacturers of anabolic androgenic steroids, including danazol, which have been used historically and are still used to treat a significant number of identified HAE patients prophylactically.

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Shire plc— Shire markets its bradykinin receptor antagonist, known as FIRAZYR® (icatibant), which is administered subcutaneously. FIRAZYR is approved in the United States, Europe, and certain other countries for the treatment of acute HAE attacks in adult patients. The U.S. and EU labels allow for patients to self-administer FIRAZYR following training by their healthcare provider. FIRAZYR has orphan drug designations in the U.S. and EU.

Shire also markets CINRYZE®, an intravenously-administered, plasma-derived C1-esterase inhibitor. CINRYZE is approved in the US for routine prophylaxis against angioedema attacks in adolescent and adult patients with HAE, and has orphan drug designation from the FDA. The FDA has also approved product labeling for CINRYZE to include self-administration for routine prophylaxis once a patient is properly trained by his or her healthcare provider. CINRYZE has also received approval in the EU for the treatment and pre-procedure prevention of angioedema attacks in adults and adolescents with HAE, and routine prevention of angioedema attacks in adults and adolescents with severe and recurrent attacks of HAE, who are intolerant to or insufficiently protected by oral prevention treatments or patients who are inadequately managed with repeated acute treatment. The EU approval includes a self-administration option for appropriately trained patients. Shire is conducting a Phase 1 trial evaluating subcutaneous administration of CINRYZE.

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CSL Behring— CSL Behring markets a plasma-derived C1-esterase inhibitor, known as Berinert®, which is administered intravenously. Berinert is approved in the U.S. for the treatment of acute abdominal, facial or laryngeal attacks of HAE in adults and adolescents, and has orphan drug designation from the FDA. The FDA has also approved labeling for Berinert to include self-administration after proper training by a healthcare professional. Berinert is also approved in the EU, Japan and several rest-of-world markets for the treatment of acute attacks of HAE. CSL Behring announced in 2013 that they had commenced an international Phase 3 study of a volume-reduced subcutaneous formulation of C1-INH.


•	Valeant Pharmaceuticals International (formerly Salix Pharmaceuticals, Ltd.)— RUCONEST® is a recombinant C1-esterase inhibitor, which is administered intravenously. RUCONEST is commercialized in the U.S. for the treatment of acute angioedema attacks in adult and adolescent patients with HAE.

Other competitors for the treatment of HAE are companies that are developing small molecule plasma kallikrein inhibitors, including BioCryst Pharmaceuticals, Inc., which completed a Phase 2 clinical trial evaluating its investigational product for prophylaxis against HAE attacks.

Furthermore, we may also be subject to competition from companies that have acquired or may acquire other technologies from universities and other research institutions and this may affect our competitive position.

We are dependent on a single contract manufacturer to produce ecallantide drug substance and another single contract manufacturer to fill, label and package ecallantide drug product into the final form, which may adversely affect our ability to commercialize KALBITOR.

We currently rely on Fujifilm to produce the bulk drug substance used in the manufacture of KALBITOR. Ecallantide drug substance is filled, labeled and packaged into the final form of KALBITOR drug product by JHS under a commercial supply agreement. Our business faces risks of difficulties with, and interruptions in, performance by Fujifilm or JHS, the occurrence of which could adversely impact the availability and/or sales of KALBITOR in the future. The failure of Fujifilm or JHS to supply manufactured product on a timely basis or at all, or to manufacture our drug substance in compliance with our specifications or applicable quality requirements or in volumes sufficient to meet demand could adversely affect our ability to sell KALBITOR, could harm our relationships with collaborators or customers and could negatively affect our revenues and operating results. If the operations of Fujifilm or JHS are disrupted, we may be forced to identify, secure and validate alternative sources of supply, which may be unavailable on commercially acceptable terms, may cause delays in our ability to deliver products to customers, may increase our costs and negatively affect our operating results.

In addition, failure to comply with applicable current good manufacturing practices and other governmental regulations and standards could be the basis for action by the FDA or corresponding foreign agency to withdraw approval for KALBITOR and for other regulatory action, including recall or seizure of product, fines, imposition of operating restrictions, total or partial suspension of production or injunctions. For example, in 2013, JHS received a Warning Letter from the FDA with respect to matters not specifically associated with KALBITOR. JHS has worked to resolve the issues raised by the FDA. If JHS fails to operate according to FDA regulations, the FDA could impose restrictions on JHS’s manufacturing capabilities, which could adversely affect future “fill and finish” activities with respect to KALBITOR.

We have a long-term commercial supply agreement with Fujifilm, under which they have committed to be available to manufacture ecallantide drug substance through 2020, and our commercial supply agreement with JHS runs through 2018. In addition, our current inventory of “filled and finished” drug product is sufficient to meet anticipated KALBITOR market demand through 2017 and our current inventory of unfilled drug substance is sufficient to meet anticipated KALBITOR market demand through 2021. These estimates are subject to changes in market conditions and other factors beyond our control. If Fujifilm or JHS is unable to dependably meet our demands for ecallantide drug substance or product, it could adversely affect our ability to further develop and commercialize KALBITOR, generate revenue from product sales, increase our costs and negatively affect our results of operations and business prospects.

We may not be able to maintain or expand market acceptance among the medical community or patients for KALBITOR, which would prevent us from achieving or maintaining profitability in the future.

We cannot be certain that KALBITOR will continue to maintain or gain additional market acceptance among physicians, patients, healthcare payers, and others. We cannot predict whether physicians, other healthcare providers, government agencies or private insurers will prefer other therapies for HAE. Medical doctors' willingness to prescribe, and patients' willingness to accept and use KALBITOR depends on many factors, including prevalence and severity of adverse side effects, effectiveness of our marketing strategies and the pricing of KALBITOR, publicity concerning KALBITOR or competing products, HAE patients’ ability to obtain and maintain third-party coverage or reimbursement, and competition from alternative treatments. In addition, the number of acute attacks that are treated with KALBITOR will vary from patient to patient depending upon a variety of factors.

If KALBITOR fails to maintain or increase market acceptance it would adversely affect our results of operations and business prospects.

If we fail to comply with continuing regulations, we could lose our approvals to market KALBITOR, and our business would be adversely affected.

We cannot guarantee that we will be able to maintain our regulatory approval for KALBITOR in the United States. We and our current and future partners, contract manufacturers and suppliers are subject to rigorous and extensive regulation by the FDA, other federal and state agencies, and governmental authorities in other countries. These regulations continue to apply after product approval, and cover, among other things, testing, manufacturing, quality control, labeling, advertising, promotion, adverse event reporting requirements, and export of biologics.

We are required to report any serious and unexpected adverse experiences and certain quality problems with KALBITOR to the FDA and other health agencies. We, the FDA or another health agency may have to notify healthcare providers of any such developments. The discovery of any previously unknown problems, including previously unreported toxicities, with KALBITOR or its manufacturer may result in updates to the product label, restrictions on KALBITOR commercialization and the manufacturer or manufacturing facility, including withdrawal of KALBITOR from the market. Certain changes to an approved product, including the way it is manufactured or promoted, often require prior regulatory approval before the product as modified may be marketed.

Our third-party manufacturing facilities were subjected to inspection prior to the grant of marketing approval and are subject to continued review and periodic inspections by the regulatory authorities. Any third party vendor that we would use to manufacture KALBITOR for sale must also be licensed by applicable regulatory authorities. Although we have established a corporate compliance program, we cannot guarantee that we, or our third party vendors, are and will continue to be in compliance with all applicable laws and regulations. Failure to comply with the laws, including statutes and regulations, administered by the FDA or other agencies could result in:


•	administrative and judicial sanctions, including warning letters;


•	fines and other civil penalties;


•	withdrawal of a previously granted approval to sell;


•	interruption of production;


•	operating restrictions;


•	product recall or seizure; injunctions; and


•	criminal prosecution.

The discovery of previously unknown problems with KALBITOR, or with the facility used to produce the product, could result in a regulatory authority imposing restrictions on us, or could cause us to voluntarily adopt such restrictions, including withdrawal of KALBITOR from the market.

If we do not maintain our regulatory approval to sell KALBITOR in the United States, our results of operations and business prospects will be materially harmed.

If the use of KALBITOR is found to harm people, or is perceived to harm patients even when such harm is unrelated to KALBITOR, our regulatory approvals could be revoked or otherwise negatively affected and we could be subject to costly and damaging product liability claims.

The testing, manufacturing, marketing and sale of drugs for use in humans exposes us to product liability risks. Side effects and other problems from using KALBITOR could:


•	lessen the frequency with which physicians decide to prescribe KALBITOR;


•	encourage physicians to stop prescribing KALBITOR to their patients who previously had been prescribed KALBITOR;


•	cause serious adverse events and give rise to product liability claims against us; and


•	require us to withdraw or recall KALBITOR from the marketplace.

The likelihood of occurrence of these risks is unknown at this time.

KALBITOR is used by only a limited number of patients. As new and existing patients use KALBITOR, new risks and side effects may be discovered. Risks previously viewed as inconsequential could be determined to be significant. Previously unknown risks and adverse effects of KALBITOR may be discovered in connection with unapproved, or off-label, uses of KALBITOR. We do not promote, or in any way support or encourage the promotion of KALBITOR for off-label uses in violation of relevant law, but current regulations allow physicians to use products for off-label uses. In the event of any new risks or adverse effects discovered as new patients are treated for HAE, regulatory authorities may modify or revoke their

approvals and we may be required to conduct additional clinical trials, make changes in labeling of KALBITOR, reformulate KALBITOR or make changes and obtain new approvals for our and our suppliers' manufacturing facilities. We may experience a significant drop in the potential sales of KALBITOR, an increase in costs, experience harm to our reputation and the reputation of KALBITOR in the marketplace or become subject to government investigations or lawsuits, including class actions. Any of these results could decrease or prevent any sales of KALBITOR or substantially increase the costs and expenses of commercializing and marketing KALBITOR.

We may be sued by people who use KALBITOR, whether as a prescribed therapy, during a clinical trial, during an investigator initiated study, or otherwise. Any informed consents or waivers obtained from people who enroll in our trials or use KALBITOR may not protect us from liability or litigation. Our product liability insurance may not cover all potential types of liabilities or may not cover certain liabilities completely. Moreover, we may not be able to maintain our insurance on acceptable terms. Negative publicity relating to the use of KALBITOR or a product candidate, or to a product liability claim, may make it more difficult, or impossible, for us to market and sell KALBITOR. As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.

During the course of treatment, patients may suffer adverse events, including death, for reasons that may or may not be related to KALBITOR. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market KALBITOR, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to KALBITOR, the investigation into the circumstance may be time-consuming, costly or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process in other countries, or impact and limit the type of regulatory approvals KALBITOR receives or maintains.

If we are unable to maintain effective sales, marketing and distribution capabilities, or enter into agreements with third parties to do so, we will be unable to successfully commercialize KALBITOR.

We are marketing and selling KALBITOR ourselves in the United States and have only limited experience with marketing, sales or distribution of drug products. If we are unable to adequately sell, market and distribute KALBITOR, either ourselves or by entering into agreements with others, or to maintain such capabilities, we will not be able to successfully sell KALBITOR. In that event, we will not be able to generate significant product sales. We cannot guarantee that we will be able to maintain our own capabilities or enter into and maintain any purchase and distribution agreements with third-parties on acceptable terms, if at all.

In the United States, we sell KALBITOR to customers including wholesalers, specialty pharmacies and a limited number of hospitals. Our distributors do not set or determine demand for KALBITOR. We expect our distribution arrangements to continue for the foreseeable future through an extension or replacement of our current agreements. Our ability to successfully commercialize KALBITOR will depend, in part, on the extent to which there is adequate distribution of KALBITOR to patients through our distributors. It is possible that our distributors could change their policies or fees, or both, sometime in the future. This could result in their refusal to distribute smaller volume products such as KALBITOR, or cause higher product distribution costs, lower margins or the need to find alternative methods of distributing KALBITOR. Although we have contractual remedies to mitigate these risks and we also believe we could find alternative distributors on relatively short notice, our product sales during that period of time may suffer and we may incur additional costs to replace a distributor. A significant reduction in product sales to our distributors, any cancellation of orders they have made with us or any failure to pay for the products we have shipped to them could materially and adversely affect our results of operations and financial condition.

We have hired sales and marketing professionals for the commercialization of KALBITOR throughout the United States. Even with these sales and marketing personnel, we may not have the necessary size and experience of the sales and marketing force and the appropriate distribution capabilities necessary to successfully market and sell KALBITOR. Establishing and maintaining sales, marketing and distribution capabilities are expensive and time-consuming. Our expenses associated with maintaining the sales force and distribution capabilities may be disproportional compared to the revenues we may be able to generate on sales of KALBITOR. We cannot guarantee that we will be successful in commercializing KALBITOR and a failure to do so would adversely affect our results of operations and business prospects.

The timing of sales to our distributors and the amount of KALBITOR they keep as inventory have a significant impact on the amount of our product sales in a particular reporting period and we may not be able to accurately predict future purchases by our distributors.

Our sales of KALBITOR are made primarily to a limited network of distributors, which, in turn, resell KALBITOR to end user customers. Product in the distribution channel consists of supply held by these distributors. Our product sales in a particular

period may be affected by increases or decreases in the distribution channel inventory levels. While we attempt to assist our distributors in maintaining targeted inventory levels of KALBITOR, we may not be successful in achieving those targeted levels. Attempting to assist our distributors in maintaining targeted inventory levels of KALBITOR involves the exercise of judgment and use of assumptions about future uncertainties including end user customer demand and, as a result, actual demand may differ from our estimates.

Although our distributors typically buy KALBITOR from us in quantities they consider necessary to satisfy projected end user demand, we may not be able to accurately predict their future buying practices. For example, distributors may engage in speculative purchases of KALBITOR in excess of the current market demand in anticipation of future price increases. Therefore, during any given period, sales to a distributor may be above or below actual patient demand for KALBITOR during the same period, resulting in fluctuations in the amount of product in the distribution channel. If distribution channel inventory levels are substantially different from end user demand, we could experience variability in product sales from period to period.

If we market KALBITOR in a manner that violates healthcare fraud and abuse laws, we may be subject to civil or criminal penalties.

In addition to FDA and related regulatory requirements, we are subject to health care "fraud and abuse" laws, such as the federal False Claims Act, the anti-kickback provisions of the federal Social Security Act, and other state and federal laws and regulations. Federal and state anti-kickback laws prohibit, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any health care item or service reimbursable under Medicare, Medicaid, or other federally or state financed health care programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers and prescribers, patients, purchasers and formulary managers. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly. Practices that involve remuneration intended to induce prescribing, purchasing, or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor.

Federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claim paid. Pharmaceutical companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, such as allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in promotion for uses that the FDA has not approved, or "off-label" uses, that caused claims to be submitted to Medicaid for non-covered off-label uses; and submitting inflated best price information to the Medicaid Rebate Program.

Although based on their medical judgment, physicians are permitted to prescribe products for indications other than those cleared or approved by the FDA, manufacturers are prohibited from promoting their products for such off-label uses. We market KALBITOR in the U.S. according to its FDA approved label for acute attacks of HAE in patients 12 years and older and provide promotional materials to physicians regarding the use of KALBITOR for this indication. Although we believe our marketing, promotional materials do not constitute off-label promotion of KALBITOR, the FDA may disagree. If the FDA determines that our promotional materials, training or other activities constitute off-label or misleading promotion of KALBITOR, it could request that we modify our training or promotional materials or other activities or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action if they believe that the alleged improper promotion led to the submission and payment of claims for an unapproved use. This could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement. Even if it is later determined we are not in violation of these laws, we may be faced with negative publicity, incur significant expenses defending our position and have to divert significant management resources from other matters.

The majority of states have statutes or regulations similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer. Sanctions under these federal and state laws may include civil monetary penalties, exclusion of a manufacturer's products from reimbursement under government programs, criminal fines, and imprisonment. Even if we ultimately are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which would also harm our financial condition. Because of the breadth of these laws and the narrowness of the safe harbors and because government scrutiny in this area is high, it is possible that some of our business activities could come under scrutiny.

In recent years several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state or make periodic public disclosures on sales, marketing, pricing, clinical trials, and other activities. In addition, as part of health care reform, the federal government has enacted the Physician Payment Sunshine Act (the Act) and related regulations. Manufacturers of drugs are required to publicly report gifts, payments or other transfers of value made to physicians and teaching hospitals. Although we believe submission of reports comply with the Act, many of these requirements are new and uncertain, and the penalties for failure to comply with these requirements are unclear. We have established compliance policies that comport with the Code of Interactions with Healthcare Providers adopted by Pharmaceutical Research Manufacturers of America (PhRMA Code), the Office of Inspector General's (OIG) Compliance Program Guidance for Pharmaceutical Manufacturers and best practices in the pharmaceutical industry. If we are found not to be in full compliance with these laws, we could face enforcement action and fines and other penalties, and could receive negative publicity which could adversely affect our business.

If we fail to comply with our reporting and payment obligations under U.S. governmental price reporting laws, we could be required to reimburse government programs for underpayments and could pay penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition and results of operations.

We are required to calculate and report certain pricing data to the U.S. federal government in connection with federal drug pricing programs. Compliance with these federal drug pricing programs is a pre-condition to (i) the availability of federal funds to pay for our products under Medicaid and Medicare Part B; and (ii) the procurement of our products by the Department of Veterans Affairs, and by covered entities under the federal government’s drug pricing program administered under Section 340B of the Public Health Services Act, referred to as the 340B program. The pricing data reported are used as the basis for establishing contracts for sales to the Department of Veterans Affairs, the Section 340B program contract pricing and payment and rebate rates under the Medicare Part B and Medicaid programs, respectively. Pharmaceutical manufacturers have been prosecuted under federal and state false claims laws for submitting inaccurate and/or incomplete pricing information to the government that resulted in overcharges under these programs. The rules governing the calculation of certain reported prices are highly complex. Although we maintain and follow strict procedures to ensure the maximum possible integrity for our federal price calculations, the process for making the required calculations involves some subjective judgments and the risk of errors always exists, and this creates the potential for exposure under the false claims laws. If we become subject to investigations or other inquiries concerning our compliance with price reporting laws and regulations, and our methodologies for calculating federal prices are found to include flaws or to have been incorrectly applied, we could be required to pay or be subject to additional reimbursements, penalties, sanctions or fines, which could have a material adverse effect on our business, results of operations and business prospects.

We rely on third-party manufacturers to produce our preclinical and clinical drug supplies and commercial supplies of KALBITOR and we intend to rely on third parties to produce any future approved product candidates. Any failure by a third-party manufacturer to produce supplies for us may delay or impair our ability to develop, obtain regulatory approval for or commercialize our product candidates.

We have relied upon a small number of third-party manufacturers for the manufacture of our product candidates for preclinical, clinical testing and commercial purposes and intend to continue to do so in the future. As a result, we depend on collaborators, partners, licensees and other third parties to manufacture clinical and commercial scale quantities of our biopharmaceutical candidates in a timely and effective manner and in accordance with government regulations. If these third party arrangements are not successful, it will adversely affect our ability to develop, obtain regulatory approval for or commercialize our product candidates.

We have identified only a few vendors with facilities that would be capable of producing material for preclinical, clinical studies and for commercial purposes. We cannot be assured that they will be able to supply sufficient clinical materials on a timely basis during the clinical development or commercialization of our biopharmaceutical candidates, including DX-2930. Reliance on third-party manufacturers entails risks which we would not be subject to if we manufactured product candidates ourselves. These risks include reliance on the third party for regulatory compliance and quality assurance, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control (including a failure to synthesize and manufacture our product candidates in accordance with our product specifications) and the possibility of termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or damaging to us. In addition, the FDA and other regulatory authorities require that our product candidates be manufactured according to cGMP and similar foreign standards. Any failure by our third-party manufacturers to comply with cGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of DX-2930 or any of our product candidates.

In addition, as our drug development pipeline increases and matures, we will have a greater need for clinical trial and commercial manufacturing capacity. We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates and we currently have no plans to build our own clinical or commercial scale manufacturing capabilities. To meet our projected needs for commercial manufacturing, third parties with whom we currently work may need to increase their scale of production or we will need to secure alternate suppliers.

Although we obtained regulatory approval of KALBITOR for the treatment of acute attacks of HAE in patients 12 years and older in the United States, we may be unable to obtain regulatory approval for ecallantide in any other territory.

Governments in countries outside the United States also regulate drugs distributed in such countries and facilities in such countries where such drugs are manufactured, and obtaining their approvals can also be lengthy, expensive and highly uncertain. The approval process varies from country to country and the requirements governing the conduct of clinical trials, product manufacturing, product licensing, pricing and reimbursement vary greatly from country to country. In certain jurisdictions, we are required to finalize operational, reimbursement, price approval and funding processes prior to marketing our products. We may not receive regulatory approval for ecallantide in countries other than the United States on a timely basis, if ever. Even if approval is granted in any such country, the approval may require limitations on the indicated uses for which the drug may be marketed. Failure to obtain regulatory approval for ecallantide in territories outside the United States could have an adverse effect on our business prospects.

We rely on third parties to conduct clinical trials and to perform certain regulatory processes, which may adversely affect our ability to commercialize any biopharmaceuticals that we may develop.

We have hired experienced clinical development and regulatory staff to develop and supervise our clinical trials and regulatory processes. However, we will remain dependent upon third party contract research organizations to carry out some of our clinical and preclinical research studies for the foreseeable future. As a result, we will continue to have less control over the conduct of the clinical trials, the timing and completion of the trials, the required reporting of adverse events and the management of data developed through the trials than would be the case if we were relying entirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Outside parties may have staffing difficulties, may undergo changes in priorities or may become financially distressed, adversely affecting their willingness or ability to conduct our trials and regulatory processes. We may also experience unexpected cost increases that are beyond our control.

Problems with the timeliness or quality of the work of third parties may lead us to seek to terminate the relationship and use an alternative service provider. However, changing our service provider may be costly and may delay our trials or regulatory processes. Contractual restrictions may make such a change difficult or impossible. Additionally, it may be impossible to timely find a replacement organization that can conduct our trials in an acceptable manner and at an acceptable cost.

Government regulation of drug development is costly, time consuming and fraught with uncertainty, and our products in development cannot be sold if we do not gain regulatory approval.

We and our licensees and partners conduct research, preclinical testing and clinical trials for our product candidates. These activities are subject to extensive regulation by numerous state and federal governmental authorities in the United States, such as the FDA, as well as foreign countries, such as the EMA in European countries, Canada and Australia. We are required in the United States and in foreign countries to obtain approval from those countries' regulatory authorities before we can manufacture (or have our third-party manufacturers produce), market and sell our products in those countries. The FDA and other United States and foreign regulatory agencies have substantial authority to fail to approve commencement of, suspend or terminate clinical trials, require additional testing and delay or withhold registration and marketing approval of our product candidates.

Obtaining regulatory approval has been and continues to be increasingly difficult and costly and takes many years. If obtained, approval is costly to maintain. With the occurrence of a number of high profile safety events with certain pharmaceutical products, regulatory authorities, and in particular the FDA, members of Congress, the United States Government Accountability Office (GAO), Congressional committees, private health/science foundations and organizations, medical professionals, including physicians and investigators, and the general public are increasingly concerned about potential or perceived safety issues associated with pharmaceutical and biological products, whether under study for initial approval or already marketed.

This increasing concern has engendered greater scrutiny, which may lead to longer time to approval, fewer treatments being approved by the FDA or other regulatory bodies, as well as restrictive labeling of a product or a class of products for safety

reasons, potentially including “boxed” warnings or additional limitations on the use of products, post-approval pharmacovigilance programs for approved products or requirement of risk management activities related to the promotion and sale of a product.

If regulatory authorities determine that we or our licensees or partners or vendors conducting research and development activities on our behalf have not complied with regulations in the research and development of a product candidate, a new indication for an existing product or information to support a current indication, then they may not approve the product candidate or new indication or maintain approval of the current indication in its current form or at all, and we will not be able to market and sell it. If we were unable to market and sell our product candidates, our results of operations and business prospects would be adversely affected.

Product liability and other claims arising in connection with the testing of our product candidates in human clinical trials may reduce demand for our products or result in substantial damages.

We face an inherent risk of product liability exposure related to KALBITOR and the testing of DX-2930 in human clinical trials.

An individual may bring a product liability claim against us if KALBITOR, DX-2930, or one of our other product candidates causes, or merely appears to have caused, an injury. Moreover, in some clinical trials, we test our product candidates in indications where the onset of certain symptoms or "attacks" could be fatal. Although the protocols for these trials include emergency treatments in the event a patient appears to be suffering a potentially fatal incident, patient deaths may nonetheless occur. As a result, we may face additional liability if we are found or alleged to be responsible for any such deaths.

These types of product liability claims may result in, but are not limited to, the following:


•	decreased demand for KALBITOR or any other product candidates;


•	injury to our reputation;


•	withdrawal of clinical trial volunteers;


•	related litigation costs; and


•	substantial monetary awards to plaintiffs.

Although we currently maintain product liability insurance, we may not have sufficient insurance coverage, and we may not be able to obtain sufficient coverage at a reasonable cost. Our inability to obtain product liability insurance at an acceptable cost or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of any products that we or our collaborators develop, including KALBITOR. If we are successfully sued for any injury caused by our products or processes, then our liability could exceed our product liability insurance coverage and our total assets.

If we fail to establish and maintain strategic license, research and collaborative relationships, or if our collaborators are not able to successfully develop and commercialize product candidates, our ability to generate revenues could be adversely affected.

Our business strategy includes leveraging certain product candidates and our proprietary phage display technology through collaborations and licenses that are structured to generate revenues through license fees, technical and clinical milestone payments, and royalties. We have entered into, and anticipate continuing to enter into, collaborative and other similar types of arrangements with third parties to develop, manufacture and market drug candidates and drug products.

In addition, for us to continue to receive any significant payments from our LFRP related licenses and collaborations, the relevant product candidates must advance through clinical trials, establish safety and efficacy, and achieve regulatory approvals, obtain market acceptance and generate revenues.

Reliance on license and collaboration agreements involves a number of risks as our licensees and collaborators:


•	are not obligated to develop or market product candidates discovered using our phage display technology;


•	may not perform their obligations as expected, or may pursue alternative technologies or develop competing products;


•	control many of the decisions with respect to research, clinical trials and commercialization of product candidates we

discover or develop with them or have licensed to them;


•	may terminate their collaborative arrangements with us under specified circumstances, including, for example, a change of control, with short notice; and


•	may disagree with us as to whether a milestone or royalty payment is due or as to the amount that is due under the terms of our collaborative arrangements.

We cannot be assured we will be able to maintain our current licensing and collaborative efforts, nor can we assure the success of any current or future licensing and collaborative relationships. An inability to work successfully with current licensees and collaborators, or failure of any significant portion of our LFRP related licensing and collaborative efforts would result in an adverse impact on our business, operating results and financial condition.

Our success depends significantly upon our ability to obtain and maintain intellectual property protection for our products and technologies and upon third parties not having or obtaining patents that would limit or prevent us from commercializing any of our products.

We face risks and uncertainties related to our intellectual property rights. For example:


•	we may be unable to obtain or maintain patent or other intellectual property protection for any products or processes that we may develop or have developed;


•	third parties may obtain patents covering the manufacture, use or sale of these products or processes, which may prevent us from commercializing any of our products under development globally or in certain regions; or


•	our patents or any future patents that we may obtain may not prevent other companies from competing with us by designing their products or conducting their activities so as to avoid the coverage of our patents.

Patent rights relating to our phage display technology are central to our LFRP. In countries where we do not have and/or have not applied for phage display patent rights, we will be unable to prevent others from using phage display or developing or selling products or technologies derived using phage display. In jurisdictions where we have phage display patent rights, we may be unable to prevent others from selling or importing products or technologies derived elsewhere using phage display. Any inability to protect and enforce such phage display patent rights, whether by any invalidity of our patents or otherwise, could negatively affect future licensing opportunities and revenues from existing agreements under the LFRP. In all of our activities, we also rely substantially upon proprietary materials, information, trade secrets and know-how to conduct our research and development activities and to attract and retain collaborators, licensees and customers. Although we take steps to protect our proprietary rights and information, including the use of confidentiality and other agreements with our employees and consultants and in our academic and commercial relationships, these steps may be inadequate, these agreements may be violated, or there may be no adequate remedy available for a violation. Our trade secrets or similar technology may otherwise become known to, or be independently developed or duplicated by, our competitors.

Before we and our collaborators can market some of our processes or products, we and our collaborators may need to obtain licenses from other parties who have patent or other intellectual property rights covering those processes or products. Third parties have patent rights related to phage display, particularly in the area of antibodies. While we have gained access to key patents in the antibody area through the cross licenses with Affimed Therapeutics AG, Affitech AS, Biosite Incorporated (now owned by Alere Inc.), Cambridge Antibody Technology Limited or CAT (now known as MedImmune Limited and owned by AstraZeneca), Domantis Limited (a wholly owned subsidiary of GlaxoSmithKline), Genentech, Inc. and XOMA Ireland Limited, other third party patent owners may contend that we need a license or other rights under their patents in order for us to commercialize a process or product. In addition, we may choose to license patent rights from other third parties. In order for us to commercialize a process or product, we may need to license the patent or other rights of other parties. If a third party does not offer us a needed license or offers us a license only on terms that are unacceptable, we may be unable to commercialize one or more of our products. If a third party does not offer a needed license to our collaborators and as a result our collaborators stop work under their agreement with us, we might lose future milestone payments and royalties, which would adversely affect us. If we decide not to seek a license, or if licenses are not available on reasonable terms, we may become subject to infringement claims or other legal proceedings, which could result in substantial legal expenses. If we are unsuccessful in these actions, adverse decisions may prevent us from commercializing the affected process or products and could require us to pay substantial monetary damages.

We seek affirmative rights of license or ownership under existing patent rights relating to phage display technology of others. For example, through our patent licensing program, we have secured a limited freedom to practice some of these patent rights pursuant to our standard license agreement, which contains a covenant by the licensee that it will not sue us under certain of the licensee's phage display improvement patents. We cannot guarantee that we will be successful in enforcing any agreements from our licensees, including agreements not to sue under their phage display improvement patents, or in acquiring similar agreements in the future, or that we will be able to obtain commercially satisfactory licenses to the technology and patents of others. If we cannot obtain and maintain these licenses and enforce these agreements, this could have an adverse impact on our business.

Proceedings to obtain, enforce or defend patents and to defend against charges of infringement are time consuming and expensive activities. Unfavorable outcomes in these proceedings could limit our patent rights and our activities, which could materially affect our business.

Obtaining, protecting and defending against patent and proprietary rights can be expensive. For example, if a competitor files a patent application claiming technology also invented by us, we may have to participate in an expensive and time-consuming interference proceeding before the United States Patent and Trademark Office to address who was first to invent the subject matter of the claim and whether that subject matter was patentable. Moreover, an unfavorable outcome in an interference proceeding could require us to cease using the technology or attempt to license rights to it from the prevailing party. Our business would be harmed if a prevailing third party does not offer us a license on terms that are acceptable to us. We may also be forced to respond to third party challenges to our patents in patent offices around the world.

The issues relating to the validity, enforceability and possible infringement of our patents present complex factual and legal issues that we periodically reevaluate. Third parties have patent rights related to phage display, particularly in the area of antibodies. While we have gained access to key patents in the antibody area through our cross-licensing agreements with Affimed, Affitech, Biosite, Domantis, Genentech, XOMA and CAT, other third party patent owners may contend that we need a license or other rights under their patents in order for us to commercialize a process or product. In addition, we may choose to license patent rights from third parties. While we believe that we will be able to obtain any needed licenses, we cannot assure you that these licenses, or licenses to other patent rights that we identify as necessary in the future, will be available on reasonable terms, if at all. If we decide not to seek a license, or if licenses are not available on reasonable terms, we may become subject to infringement claims or other legal proceedings, which could result in substantial legal expenses. If we are unsuccessful in these actions, adverse decisions may prevent us from commercializing the affected process or products. Moreover, if we are unable to maintain the covenants with regard to phage display improvements that we obtain from our licensees through our patent licensing program and the licenses that we have obtained to third party phage display patent rights, it could have a material adverse effect on our business.

We would expect to incur substantial costs in connection with any litigation or patent proceeding. In addition, our management's efforts would be diverted, regardless of the results of the litigation or proceeding. An unfavorable result could subject us to significant liabilities to third parties, require us to cease manufacturing or selling the affected products or using the affected processes, require us to license the disputed rights from third parties or result in awards of substantial damages against us. Our business will be harmed if we cannot obtain a license, can obtain a license only on terms we consider to be unacceptable or if we are unable to redesign our products or processes to avoid infringement.

In all of our activities, we substantially rely on proprietary materials and information, trade secrets and know-how to conduct research and development activities and to attract and retain collaborative partners, licensees and customers. Although we take steps to protect these materials and information, including the use of confidentiality and other agreements with our employees and consultants in both academic commercial relationships, we cannot assure you that these steps will be adequate, that these agreements will not be violated, or that there will be an available or sufficient remedy for any such violation, or that others will not also develop the same or similar proprietary information.

Our internal computer systems, or those of our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our business including our development programs.

Despite the implementation of security measures, our internal computer systems and those of our third-party CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such system failure, accident, or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our business. For example, the loss of clinical trial data for DX-2930 could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or

security breach results in a loss of or damage to our data or applications or other data or applications relating to KALBITOR or product candidates, or inappropriate disclosure of confidential or proprietary information, we could incur liabilities which could have a material adverse effect on our business.

If we lose or are unable to hire and retain qualified personnel, we may not be able to develop our products or processes.

We are highly dependent on qualified scientific and management personnel, and we face intense competition from other companies and research and academic institutions for qualified personnel. If we lose an executive officer, a manager of one of our principal business units or research programs, or a significant number of any of our staff or are unable to hire and retain qualified personnel, then our ability to develop and commercialize our products and processes may be delayed which would have an adverse effect on our business, results of operations and financial condition.

We use and generate hazardous materials in our business, and any claims relating to the improper handling, storage, release or disposal of these materials could be time-consuming and expensive.

Our phage display research and development involves the controlled storage, use and disposal of chemicals and solvents, as well as biological and radioactive materials. We are subject to foreign, federal, state and local laws and regulations governing the use, manufacture and storage and the handling and disposal of materials and waste products. Although we believe that our safety procedures for handling and disposing of these hazardous materials comply with the standards prescribed by laws and regulations, we cannot completely eliminate the risk of contamination or injury from hazardous materials. If an accident occurs, an injured party could seek to hold us liable for any damages that result and any liability could exceed the limits or fall outside the coverage of our insurance. We may not be able to maintain insurance on acceptable terms, or at all. We may incur significant costs to comply with current or future environmental laws and regulations.

The FDA or similar agencies in other jurisdictions may require us to restrict the distribution or use of KALBITOR or other future products or take other potentially limiting or costly actions if we or others identify side effects after the product is on the market.

The FDA had required that we implement a Risk Evaluation and Mitigation Strategy (REMS) for KALBITOR and conduct post-marketing studies to assess a risk of hypersensitivity reactions, including anaphylaxis. The REMS consisted of a plan to communicate the safety risks of the product to healthcare providers. While the FDA approved the removal of the REMS requirement for KALBITOR during 2013 because the FDA agreed that we met our obligations under the communication plan, it or other regulatory agencies could impose new requirements or change existing regulations or promulgate new ones at any time that may affect our ability to obtain or maintain approval of KALBITOR or future products or require significant additional costs to obtain or maintain such approvals. For example, the FDA or similar agencies in other jurisdictions may require us to restrict the distribution or use of KALBITOR if we or others identify side effects after KALBITOR and/or future products are on the market. Changes in KALBITOR's approval or restrictions on its use could make it difficult to achieve market acceptance, and we may not be able to market and sell KALBITOR, or continue to sell it successfully, or at all. This would limit our ability to generate product sales and adversely affect our results of operations and business prospects.

We may not succeed in acquiring technology and integrating complementary businesses.

We may acquire additional technology and complementary businesses in the future. Acquisitions involve many risks, any one of which could materially harm our business, including:


•	the diversion of management's attention from core business concerns;


•	the failure to exploit acquired technologies effectively or integrate successfully the acquired businesses;


•	the loss of key employees from either our current business or any acquired businesses; and


•	the assumption of significant liabilities of acquired businesses.

We may be unable to make any future acquisitions in an effective manner. In addition, the ownership represented by the shares of our common stock held by our existing stockholders will be diluted if we issue equity securities in connection with any acquisition. If we make any significant acquisitions using cash we may be required to use a substantial portion of our available cash. If we issue debt securities to finance acquisitions, then the debt holders could have rights senior to the holders of shares of our common stock to make claims on our assets. The terms of any debt could restrict our operations, including our ability to pay dividends on our shares of common stock. Acquisition financing may not be available on acceptable terms, or at all. We

may be required to amortize significant amounts of intangible assets in connection with future acquisitions. We might also have to recognize significant amounts of goodwill that will have to be tested periodically for impairment. These amounts could be significant, which could adversely affect our operating results.

Risks Related To Our Common Stock

Our common stock may continue to have a volatile public trading price and fluctuating volume.

The market price of our common stock has been highly volatile. The market has experienced significant price and volume fluctuations for many reasons, some of which may be unrelated to our operating performance.

Many factors may have an effect on the market price of our common stock, including:


•	public announcements by us, our competitors or others;


•	developments concerning proprietary rights, including patents and litigation matters;


•	publicity regarding actual or potential clinical results or developments with respect to products or compounds we or our collaborators are developing;


•	regulatory decisions in both the United States and abroad;


•	public concern about the safety or efficacy of new technologies;


•	issuance of new debt or equity securities;


•	general market conditions and comments by securities analysts; and


•	quarterly fluctuations in our revenues and financial results.

While we cannot predict the effect that these or other factors may have on the price of our common stock, these factors, either individually or in the aggregate, could result in significant variations in price during any given period of time.

Anti-takeover provisions in our governing documents and under Delaware law may make an acquisition of us more difficult.

We are incorporated in Delaware. We are subject to various legal and contractual provisions that may make a change in control of us more difficult. Our board of directors has the flexibility to adopt additional anti-takeover measures.

Our charter authorizes our board of directors to issue up to 1,000,000 shares of preferred stock, all of which remains available for issuance and to determine the terms of those shares of stock without any further action by our stockholders. If the board of directors exercises this power to issue preferred stock, it could be more difficult for a third party to acquire a majority of our outstanding voting stock. Our charter also provides staggered terms for the members of our board of directors. This may prevent stockholders from replacing the entire board in a single proxy contest, making it more difficult for a third party to acquire control of us without the consent of our board of directors. Our equity incentive plans generally permit our board of directors to provide for acceleration of vesting of options granted under these plans in the event of certain transactions that result in a change of control. If our board of directors used its authority to accelerate vesting of options this action could make an acquisition more costly, and it could prevent an acquisition from going forward.

Section 203 of the Delaware General Corporation Law prohibits a person from engaging in a business combination with any holder of 15% or more of its capital stock until the holder has held the stock for three years unless, among other possibilities, the board of directors approves the transaction. This provision could have the effect of delaying or preventing a change of control of Dyax, whether or not it is desired by or beneficial to our stockholders.

The provisions described above, as well as other provisions in our charter and bylaws and under the Delaware General Corporation Law, may make it more difficult for a third party to acquire our company, even if the acquisition attempt was at a premium over the market value of our common stock at that time.

Item 5. - Other Information.

On August 21, 2015, we prepaid in full all indebtedness outstanding under the Loan Agreement dated as of December 29, 2011 between Dyax and LFRP Investors, L.P. (Lender), which consisted of approximately $84.1 million in principal. We were not required to pay any prepayment penalty in connection with this repayment. Pursuant to the terms of the Loan Agreement, we entered into a security agreement on August 22, 2012 granting Lender a security interest in substantially all of the assets related to the LFRP and the revenues generated by us through the licenses of the intellectual property related to the LFRP, which terminated in accordance with its terms at the time of the repayment.

Item 6 – EXHIBITS



EXHIBIT NO.		DESCRIPTION

2.1		Agreement and Plan of Merger, dated as of November 2, 2015, by and among the Company, Shire Pharmaceuticals International, Parquet Courts, Inc. and Shire plc.* Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on November 2, 2015 and incorporated herein by reference.

3.1		Amended and Restated Certificate of Incorporation of the Company. Filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q (File No. 000-24537) for the quarter ended September 30, 2008 and incorporated herein by reference.

3.2		Certificate of Amendment of the Company’s Amended and Restated Certificate of Incorporation. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on May 13, 2011 and incorporated herein by reference.

3.3		Amended and Restated Bylaws of the Company, effective as of November 2, 2015. Filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 000-24537) filed on November 2, 2015 and incorporated herein by reference.

10.1		Form of the Company’s Incentive Stock Option Certificate under the Company’s Amended and Restated 1995 Equity Incentive Plan. Filed herewith.

10.2		Form of the Company’s Non-Qualified Stock Option Certificate under the Company’s Amended and Restated 1995 Equity Incentive Plan. Filed herewith.

10.3		Form of the Company’s Restricted Stock Unit Certificate under the Company’s Amended and Restated 1995 Equity Incentive Plan. Filed herewith.

10.4†		Master Development & Manufacturing Services Agreement, by and between Dyax Corp. and Rentschler Biotechnologie GmbH dated June 11, 2014, and as amended by the First Amendment entered into July 29, 2014, the Second Amendment entered into February 3, 2015, the Third Amendment entered into May 11, 2015, the Fourth Amendment entered into on or around May 22, 2015, and the Fifth Amendment entered into September 3, 2015. Filed herewith.

10.5†		Manufacturing Services Agreement between Dyax Corp. and Cook Pharmica LLC dated February 20, 2015, as amended by the First Amendment to the Manufacturing Services Agreement entered into July 22, 2015. Filed herewith.

10.6		Form of Contingent Value Rights Agreement to be entered into between Shire plc and American Stock Transfer & Trust Company, LLC. Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on November 2, 2015 and incorporated herein by reference.

31.1		Certification of Chief Executive Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.

31.2		Certification of Chief Financial Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.

32		Certification pursuant to 18 U.S.C. Section 1350. Filed herewith.

101		The following materials from Dyax Corp.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Balance Sheets as of September 30, 2015 and December 31, 2014, (ii) Condensed Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014, (iii) Condensed Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, and (iv) Notes to Condensed Financial Statements.


†	This Exhibit has been filed separately with the Commission pursuant to an application for confidential treatment. The confidential portions of this Exhibit have been omitted and are marked by an asterisk.


*	The schedules to the Merger Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of such schedules to the SEC upon its request; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule so furnished.

DYAX CORP.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	DYAX CORP.

Date: November 6, 2015
	/s/George Migausky
	George Migausky
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

DYAX CORP.

EXHIBIT INDEX



EXHIBIT NO.		DESCRIPTION

2.1		Agreement and Plan of Merger, dated as of November 2, 2015, by and among the Company, Shire Pharmaceuticals International, Parquet Courts, Inc. and Shire plc.* Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on November 2, 2015 and incorporated herein by reference.

3.1		Amended and Restated Certificate of Incorporation of the Company. Filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q (File No. 000-24537) for the quarter ended September 30, 2008 and incorporated herein by reference.

3.2		Certificate of Amendment of the Company’s Amended and Restated Certificate of Incorporation. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on May 13, 2011 and incorporated herein by reference.

3.3		Amended and Restated Bylaws of the Company, effective as of November 2, 2015. Filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 000-24537) filed on November 2, 2015 and incorporated herein by reference.

10.1		Form of the Company’s Incentive Stock Option Certificate under the Company’s Amended and Restated 1995 Equity Incentive Plan. Filed herewith.

10.2		Form of the Company’s Non-Qualified Stock Option Certificate under the Company’s Amended and Restated 1995 Equity Incentive Plan. Filed herewith.

10.3		Form of the Company’s Restricted Stock Unit Certificate under the Company’s Amended and Restated 1995 Equity Incentive Plan. Filed herewith.

10.4†		Master Development & Manufacturing Services Agreement, by and between Dyax Corp. and Rentschler Biotechnologie GmbH dated June 11, 2014, and as amended by the First Amendment entered into July 29, 2014, the Second Amendment entered into February 3, 2015, the Third Amendment entered into May 11, 2015, the Fourth Amendment entered into on or around May 22, 2015, and the Fifth Amendment entered into September 3, 2015. Filed herewith.

10.5†		Manufacturing Services Agreement between Dyax Corp. and Cook Pharmica LLC dated February 20, 2015, as amended by the First Amendment to the Manufacturing Services Agreement entered into July 22, 2015. Filed herewith.

10.6		Form of Contingent Value Rights Agreement to be entered into between Shire plc and American Stock Transfer & Trust Company, LLC. Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on November 2, 2015 and incorporated herein by reference.

31.1		Certification of Chief Executive Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.

31.2		Certification of Chief Financial Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.

32		Certification pursuant to 18 U.S.C. Section 1350. Filed herewith.

101		The following materials from Dyax Corp.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Balance Sheets as of September 30, 2015 and December 31, 2014, (ii) Condensed Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014, (iii) Condensed Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, and (iv) Notes to Condensed Financial Statements.


†	This Exhibit has been filed separately with the Commission pursuant to an application for confidential treatment. The confidential portions of this Exhibit have been omitted and are marked by an asterisk.


*	The schedules to the Merger Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of such schedules to the SEC upon its request; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule so furnished.

Exhibit 10.1



Notice of Grant of Stock Options	DYAX CORP.
and Option Agreement	ID: 04-3053198
	55 Network Drive
	Burlington, MA 01803




<Name>	Option Number:	<Option Number>
<Address>	Plan:	1995
	ID:	<ID Number>

Effective (the “Date of Grant”), you have been granted an Incentive Stock Option (the “Option”) to buy shares of DYAX CORP. (the “Company”) stock at $ per share, which is the closing price of the Company’s Common Stock on the Date of Grant.

The total option price of the shares granted is $ .

Shares in each period will become fully vested on the date shown.




Shares	Vest Type	Full Vest	Expiration

By your signature and the Company’s signature below, you and the Company agree that these options are granted under and governed by the terms and conditions of the Company’s Stock Option Plan, as amended, and the Option Agreement, all of which are attached and made a part of this document.



DYAX CORP.		Date:

Signature:		Date

DYAX CORP 1995 EQUITY INCENTIVE PLAN

Incentive Stock Option Terms And Conditions

(2015 Form)

1. Option Price. The price to be paid for each share of Common Stock upon exercise of the whole or any part of this Option shall be the amount set forth as the Option Price on the face of this Certificate, which is not less than 100% of the fair market value of a share of Common Stock of the Company on the Date of Grant.

2. Exercisability Schedule. This Option may be exercised with respect to the aggregate number of shares set forth in the Exercisability Schedule on the face of this Certificate at any time after the dates specified in such schedule, provided, however, that this Option may not be exercised as to any shares after the expiration of ten (10) years from the Date of Grant.

3. Method of Exercise. This Option may be exercised at any time and from time to time, subject to the limitation of Section 2 above, up to the aggregate number of shares specified herein, but in no event for the purchase of other than full shares. To exercise this Option, written notice of exercise shall be delivered to the Company specifying the number of shares with respect to which the Option is being exercised accompanied by payment of the Option Price for such shares in cash, by personal or certified check or in such other form, including shares of Common Stock of the Company valued at their fair market value on the date of delivery, as the Committee may approve. If the Company determines that the notice of exercise and payment are in order (which in the case of payment by personal check may include the clearing of funds for payment), the Company will promptly proceed to have prepared and delivered to the Optionholder a certificate for the number of shares with respect to which the Option is being exercised.

4. Exercise of Option After Termination of Employment. If the Optionholder's employment with (i) the Company, (ii) a parent or subsidiary corporation of the Company, is terminated for any reason otherwise than by his death or disability (within the meaning of section 22(e)(3) of the Code), the Optionholder may exercise the rights which were available to the Optionholder at the time of such termination only within three (3) months from the date of termination. If the Optionholder's employment is terminated for reason of disability, such rights may be exercised within twelve (12) months from the date of termination. Upon the death of the Optionholder, those entitled to do so by the Optionholder's will or the laws of descent and distribution shall have the right, at any time within twelve (12) months after the date of death, to exercise in whole or in part any rights which were available to the Optionholder at the time of his death. This Option shall terminate, and no rights hereunder may be exercised, after the expiration of the applicable exercise period. Notwithstanding the foregoing provisions of this Section 4, no rights under this Option be exercised after the expiration of ten (10) years from the Date of Grant.

5. Rights as a Stockholder. The Optionholder shall not be deemed, for any purpose, to have any rights whatever in respect of shares to which the Option shall not have been exercised and payment made as aforesaid. The Optionholder shall not be deemed to have any rights to continued employment by the Company by virtue of the grant of this Option.

6. Recapitalizations, Mergers, Etc. In the event of any stock dividend, split up, combination or reclassification of shares, recapitalization or other similar capital change affecting the Common Stock of the Company, the provisions of section 5(b) of the Plan shall apply.

In the event of a Change in Control, consolidation or merger of the Company with another corporation, or the sale or exchange of all or substantially all of the assets of the Company, or a reorganization or liquidation of the Company, the Optionholder shall be entitled to receive upon exercise and payment in accordance with the terms of this Option the same shares, securities or property as he would have been entitled to receive upon the occurrence of such event if he had been, immediately prior to such event, the holder of the number of shares of Common Stock purchasable under this Option, or if another corporation shall be the survivor, such corporation shall substitute therefor substantially equivalent shares, securities or property of such other corporation; provided, however, that in lieu of the foregoing the Committee may upon written notice to the Optionholder provide that this Option shall terminate on a date not less than twenty (20) days after the date of such notice unless theretofore exercised. In connection with such notice, the Committee shall accelerate or waive any deferred exercise period and shall allow the Optionholder to conditionally exercise any unvested Options that would vest immediately prior to the Change in Control, conditioned on the occurrence of such Change in Control.

In the event of a Change in Control, if an outstanding Option hereunder shall continue as an Option or is assumed or an equivalent award substituted by the successor corporation or a parent or subsidiary of the successor corporation, then if the Company, the successor corporation or a parent or subsidiary of the successor corporation terminates the Optionholder’s employment other than for Cause, Disability or death within twelve (12) months following a Change in Control, then any Options, including as assumed or substituted, held by the Optionholder on the date of termination that are unvested as of such date of termination shall become immediately exercisable.

7. Option Not Transferable. This Option is not transferable by the Optionholder otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionholder's lifetime, only by the Optionholder.

8. Compliance with Securities Laws. It shall be a condition to the Optionholder's right to purchase shares of Common Stock hereunder that the Company may, in its discretion, require (a) that the shares of Common Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange on which the Company's Common Stock may then be listed, (b) that either (i) a registration statement under the Securities Act of 1933, as amended, with respect to said shares shall be in effect, or (ii) in the opinion of counsel for the Company the proposed purchase shall be exempt from registration under said Act and the Optionholder shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall deem necessary to comply with any law, rule or regulation applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionholder, or both. The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall deem necessary to comply with any applicable law, rule or regulation.

9. Payment of Taxes. Any exercise of this Option is conditioned upon the payment, if the Company so requests, by the Optionholder or his heirs by will or by the laws of descent and distribution, of all state and federal taxes imposed upon the exercise of this Option and the issue to the Optionholder of the shares of Common Stock covered hereby. In the Committee's discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including retention of shares being purchased by the Optionholder, valued at their fair market value on the date of delivery. The Company may to the extent permitted by law deduct any such tax obligations from any payment of any kind otherwise due to the Optionholder.

10. Notice of Sale of Shares Required. The Optionholder agrees to notify the Company in writing within thirty (30) days of the disposition of one or more shares of stock purchased upon exercise of this Option if such disposition occurs within two (2) years of the Date of Grant or within one (1) year after such purchase.

11. Plan Incorporated by Reference. This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan. This Certificate does not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference. Capitalized terms used and not otherwise defined herein have the meanings given to them in the Plan. The Committee administers the Plan and its determinations regarding the operation of the Plan are final and binding. A copy of the Plan may be obtained upon written request without charge from the Chief Financial Officer of the Company.

12. Certain Definitions. Capitalized terms that are not defined in the Plan or herein shall have the meanings set forth below:

"Cause" shall mean:

(a) the willful and continued failure by the optionholder to perform his or her duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), as determined by the Company; or

(b) any act of material misconduct (including insubordination) or the commission of any act of dishonesty or moral turpitude in connection with the optionholder’s employment, as determined by the Company; or

(c) the optionholder/participant’s conviction or plea of nolo contendere of a felony or a crime involving moral turpitude.

"Change in Control" shall mean an event or occurrence set forth in any one or more of subsections (a) through (d) below:

(a) any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock in the Company) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly (other than as a result of acquisitions of such securities from the Company), of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities entitled to vote generally in the election of directors;

(b) individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company) shall be, for purposes of this Agreement, considered to be a member of the Incumbent Board;

(c) the consummation of a merger, share exchange or consolidation of the Company or any subsidiary of the Company with any other entity (each a "Business Combination"), other than (A) a Business Combination that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of another entity) beneficial ownership, directly or indirectly, of a majority of the combined voting power of the Company or the surviving entity (including any person that, as a result of such transaction, owns all or substantially all of the Company's assets either directly or through one or more subsidiaries) outstanding immediately after such Business Combination or (B) a merger, share exchange or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (as defined above) is or becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; or

(d) the stockholders of the Company approve (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets but excluding a sale or spin-off of a product line, business unit or line of business of the Company if the remaining business is significant as determined by the Company's board of directors in its sole discretion.

"Disability" shall mean the Optionholder shall have been deemed "disabled" by the institution appointed by the Company to administer the Company's Long-Term Disability Plan (or successor plan).

Adopted 7/21/15

Exhibit 10.2



Notice of Grant of Stock Options	DYAX CORP.
and Option Agreement	ID: 04-3053198
	55 Network Drive
	Burlington, MA 01803




<Name>	Option Number:	<Option Number>
<Address>	Plan:	1995
	ID:	<ID Number>

Effective (the “Date of Grant”), you have been granted a Non-Qualified Stock Option (the “Option”) to buy shares of DYAX CORP. (the “Company”) stock at $ per share, which is the closing price of the Company’s Common Stock on the Date of Grant.

The total option price of the shares granted is $ .

Shares in each period will become fully vested on the date shown.




Shares	Vest Type	Full Vest	Expiration



DYAX CORP.		Date:

Signature:		Date

DYAX CORP 1995 EQUITY INCENTIVE PLAN

Non-Qualified Stock Option Terms And Conditions

(2015 Form)

4. Exercise of Option After Termination of Service. If the Optionholder is no longer serving as an employee, director or consultant, as the case may be, of (i) the Company, (ii) a parent or subsidiary corporation of the Company, or (iii) a corporation (or parent or subsidiary corporation of such corporation) issuing or assuming a stock option in a transaction to which section 424(a) of the Code applies, for any reason other than by his death or disability (as determined by the Board of Directors of the Company), he may exercise the rights which he had hereunder at the time of such termination only within three (3) months from the date of termination. If his service is terminated for reason of disability, such rights may be exercised within twelve (12) months from the date of termination. Upon the death of the Optionholder, those entitled to do so by the Optionholder's will or the laws of descent and distribution shall have the right, at any time within twelve (12) months after the date of death, to exercise in whole or in part any rights which were available to the Optionholder at the time of his death. This Option shall terminate, and no rights hereunder may be exercised, after the expiration of the applicable exercise period. Notwithstanding the foregoing provisions of this Section 4, no rights under this Option be exercised after the expiration of ten (10) years from the Date of Grant.

9. Payment of Taxes. Any exercise of this Option is conditioned upon the payment, if the Company so requests, by the Optionholder or his heirs by

will or by the laws of descent and distribution, of all state and federal taxes imposed upon the exercise of this Option and the issue to the Optionholder of the shares of Common Stock covered hereby. In the Committee's discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including retention of shares being purchased by the Optionholder, valued at their fair market value on the date of delivery. The Company may to the extent permitted by law deduct any such tax obligations from any payment of any kind otherwise due to the Optionholder.

10. Plan Incorporated by Reference. This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan. This Certificate does not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference. Capitalized terms used and not otherwise defined herein have the meanings given to them in the Plan. The Committee administers the Plan and its determinations regarding the operation of the Plan are final and binding. A copy of the Plan may be obtained upon written request without charge from the Chief Financial Officer of the Company.

11. Certain Definitions. Capitalized terms that are not defined in the Plan or herein shall have the meanings set forth below:

"Cause" shall mean:

(c) the optionholder/participant’s conviction or plea of nolo contendere of a felony or a crime involving moral turpitude.

"Change in Control" shall mean an event or occurrence set forth in any one or more of subsections (a) through (d) below:

"Disability" shall mean the Optionholder shall have been deemed "disabled" by the institution appointed by the Company to administer the Company's Long-Term Disability Plan (or successor plan).

Adopted 7/21/15

Exhibit 10.3

DYAX CORP.

AMENDED AND RESTATED 1995 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT CERTIFICATE

(Employees)

Certificate Number: RSU- ________________ ________________ Units

This Restricted Stock Unit Certificate (this “Certificate”) confirms that Dyax Corp. (“Dyax” or the “Company”), a Delaware corporation, has on the date set forth below (the “Award Date”) granted to the person named below (“Participant”) an award (the “Award”) of the number of Restricted Stock Units (the "Units") set forth below, pursuant to the Company’s Amended and Restated 1995 Equity Incentive Plan (the “Plan”) and conditioned on the Participant’s acceptance of this Award as contemplated below. Each Restricted Stock Unit represents the right to receive one share of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”), subject to the terms and conditions of Restricted Stock Units.

Award Date: _________________________________

Name of Participant: _________________________________

Address: _________________________________

Social Security No.: _________________________________

Number of Units: _________________________________


Vesting Schedule:	Shares in each period will become fully vested on the date shown.

Shares Full Vest

________________ ________________


Automatic Sell-to-Cover:	When shares of Common Stock are issued upon each vesting date of the Award, a portion of the shares sufficient to cover the required tax withholding on vesting will be sold automatically and the proceeds delivered to Dyax pursuant to the terms and conditions of Restricted Stock Units.

By acceptance of this Award, Participant agrees to all the terms and conditions hereof, including, without limitation, those set forth in the Plan.



	DYAX CORP. By: _______________________________ Title:

The undersigned hereby accepts this Award and confirms that by its terms it is subject to provision for an Automatic Sell-to-Cover instruction to cover the required tax withholding on any vesting and settlement of this Award.



PARTICIPANT: ___________________________________________ {Signature}	Date: ______________________________________ {Only to be accepted outside of blackout periods}

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS ("UNITS")

(2015 Form)The Plan. In the event of any conflict between the terms of the Plan and this Award, the terms of the Plan shall govern. The Committee administers the Plan and its determinations regarding the operation of the Plan are final. Subject to the limitations set forth in the Plan, the Committee may amend the Plan or this Award. Capitalized terms used but not defined herein shall have the meaning set forth in the Plan. Copies of the Plan may be obtained upon written request without charge from the Treasurer of Dyax.

2.No Rights as Stockholder or Employee. Participant shall not have any of the rights or privileges of a stockholder of Dyax with respect to the Units granted pursuant to this Award unless and until shares of Common Stock have been issued and delivered to Participant. No adjustments shall be made for dividends or distributions or other rights for which the record date is prior to the date such shares of Common Stock are issued. The rights of Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights vest in accordance with Sections 4, 5 and 6 below. Participant shall not have any rights to continued employment by Dyax or its Affiliates by virtue of the grant of this Award.

3.Conversion of Units: Issuance of Common Stock. No shares of Common Stock shall be issued to Participant prior to the date on which the Units vest in accordance with Sections 4, 5 and 6. Subject to Section 10, Dyax shall deliver to Participant, on or promptly after each vesting date set forth on the cover of this Certificate, the shares of Common Stock represented by the whole Units that vest on such date, less any shares withheld pursuant to Section 8 below. The value of any fractional Unit shall be paid in cash at the time the certificate is delivered to Participant. The shares of Common Stock issued on conversion of vested Units shall be free of all restrictions on transferability and forfeiture under this Award.

4.Vesting. Subject to the terms and conditions of this Award, the Units shall vest and be settled according to the Vesting Schedule set forth on the cover of this Certificate, so long as Participant remains continuously employed by Dyax until the corresponding vesting date for the Units.

5.Change in Control. As provided in the Plan, in the event of a Change in Control affecting Dyax’s outstanding Common Stock, the Committee shall equitably adjust the number and kind of shares subject to this Award or make provision for a cash payment. If such Change in Control involves a consolidation or merger of Dyax with another entity, the sale or exchange of all or substantially all of the assets of Dyax or a reorganization or liquidation of Dyax, then in lieu of the foregoing, the Committee may in its discretion accelerate or waive any vesting period. In the event that an Award is not fully vested upon a Change in Control, then if the Company, the successor corporation or a parent or subsidiary of the successor corporation terminates the Participant’s employment other than for Cause, Disability or death within twelve (12) months following a Change in Control, then any vesting period shall be automatically waived and accelerated in full.

6.Termination of Employment. If, prior to vesting of the Units pursuant to Section 4 or 5, Participant ceases to be an employee of Dyax for any reason (voluntary or involuntary), then Participant’s rights to all of the unvested Units shall be immediately and irrevocably forfeited.

7.Restriction on Transfer. The Units are not transferable by Participant otherwise than by will or the laws of descent and distribution. The naming of a Designated Beneficiary does not constitute a transfer.

8.Income Tax Matters. Participant shall pay to Dyax, or make provision satisfactory to Dyax for payment of, any taxes required by law to be withheld in respect of the Units subject to this Award no later than the date of the event creating the tax liability. In order to comply with all applicable federal or state income tax laws or regulations, Dyax may take such action as it deems appropriate to ensure that all applicable taxes are withheld or collected from Participant. In Dyax’s discretion, such tax obligations may be paid in whole or in part by having Dyax withhold a portion of the shares of Common Stock otherwise to be delivered valued at their Fair Market Value, or to the extent permitted by law, deducting any such tax obligations from any payment of any kind otherwise due to Participant, including wages or other cash compensation. Unless Participant provides advance notice to Dyax in accordance with its requirements and Participant pays, or otherwise properly instructs Dyax to withhold, amounts sufficient for Participant's tax withholding obligations, Dyax shall have the right, but not the obligation, to withhold shares of common stock to pay such tax obligations.

9.409A. In the event that the Committee determines that any amounts will be immediately taxable to Participant under Section 409A of the Code and related Department of Treasury guidance (or subject Participant to a penalty tax) in connection with the grant or vesting of the Restricted Stock Units or any provision of this Award or the Plan, Dyax may (i) adopt such amendments to this Award (having prospective or retroactive effect), that the Committee determines to be necessary or appropriate to preserve the intended tax treatment of the Units and/or (ii) take such other actions as the Committee determines to be necessary or appropriate to comply with the requirements of Section 409A of the Code and related Department of Treasury guidance, including such Department of Treasury guidance and other interpretive materials as may be issued after the date on which such Units were granted.

10.Conditions for Issuance of Shares; Sell to Cover Tax Withholding. Dyax shall not be required to deliver any shares of Common Stock upon vesting of any Units until (i) such shares Stock have been admitted to listing on all stock exchanges on which the Common Stock is then listed; (ii) the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of any securities exchange) as may be determined by Dyax to be applicable are satisfied and (iii) Dyax has instructed the on-line broker for the Plan to sell automatically and deliver to Dyax the proceeds of a portion of the shares having sufficient value to cover all required tax withholdings (an “Automatic Sell-to-Cover”), and such portion is withheld and sold; provided, however, that Dyax may only delay delivery of shares of Common Stock under clauses (i) and (ii) to the extent that such deferral complies with the provisions of Section 409A of the Code and related Department of Treasury guidance. Except as provided in the preceding sentence, in no event will shares of Common Stock be delivered later than the date that is two and one-half (2½) months from the end of the calendar year in which the applicable Restricted Stock Units vest. Any certificates representing shares of Common Stock delivered under this Award may contain such legends as counsel for Dyax shall consider reasonable to comply with any applicable law.

11.Notices. Any written notices provided for in this Award that are sent by mail shall be deemed received three business days after mailing, but not later than the date of actual receipt. Notices shall be directed, if to Participant, at the Participant’s address indicated by Dyax’s records and, if to Dyax, at Dyax’s principal executive office.

12.Miscellaneous. The right of Participant to receive shares of Common Stock pursuant to this Award is an unfunded and unsecured obligation of Dyax. The Participant shall have no rights under this Award other than those of an unsecured general creditor of Dyax. Subject to the restrictions on transfer set forth herein, this Award shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

13.Governing Law. This Award shall be governed by and construed in accordance with the laws of the State of Delaware and applicable federal law, without regard to applicable conflicts of laws.

14.Severability. If one or more of the provisions of this Award shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Award to be construed so as to foster the intent of this Award and the Plan.

15. Certain Definitions. Capitalized terms that are not defined in the Plan or herein shall have the meanings set forth below:

"Cause" shall mean:

(a) the willful and continued failure by the Participant to perform his or her duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), as determined by the Company; or

(b) any act of material misconduct (including insubordination) or the commission of any act of dishonesty or moral turpitude in connection with the Participant’s employment, as determined by the Company; or

"Change in Control" shall mean an event or occurrence set forth in any one or more of subsections (a) through (d) below:

"Disability" shall mean the Participant shall have been deemed "disabled" by the institution appointed by the Company to administer the Company's Long-Term Disability Plan (or successor plan).

Adopted 7/21/15

Dyax Corp. has requested that portions of this document be accorded confidential treatment pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks [*****] denote such omission.

CONFIDENTIAL DOCUMENT

Exhibit 10.4

Master Development & Manufacturing Services Agreement

Contract Number: CCF7BA98-A366

This Master Development and Manufacturing Services Agreement, together with any Work Orders attached hereto (collectively, this "Agreement"), is made and entered into as of June, 11, 2014 (the "Effective Date") by and between Rentschler Biotechnologie GmbH, a company organized under the laws of Germany, having a principle place of business at Erwin-Rentschler-Str. 21, 88471 Laupheim, Germany ("Rentschler") and Dyax Corp., a company organized under the laws of the State of Delaware, USA, having a principle place of business at 55 Network Drive, Burlington, Massachusetts, USA ("Dyax"). Rentschler and Dyax are referred to herein individually as a "Party" and collectively as the "Parties".

WHEREAS, Rentschler provides a full range of bioprocessing services to the biopharmaceutical industry, including process and analytical development and validation, and Phase III clinical and commercial manufacturing services.

WHEREAS, Dyax desires Rentschler to perform Services (as hereinafter defined) in accordance with the terms of this Agreement related to process and analytical development and validation and the production of cGMP material suitable for Phase III clinical trials and for supply to commercial markets that meets FDA and EMA acceptance criteria, and Rentschler desires to perform such services.

NOW, THEREFORE, in consideration of the above statements and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties hereto agree as follows:

1. Definitions. Unless the context requires otherwise, words and phrases defined in any other part of this Agreement shall bear the same meanings in this Article 1, references to the singular number include the plural and vice versa, references to Work Orders are references to work orders to this Agreement, and references to Sections are references to sections of this Agreement. In the event of a conflict between a term in any executed Work Order or any supplemental or additional term agreed to in writing from time to time between the Parties and this Agreement, this Agreement will prevail, unless expressly stated otherwise. As such, the following terms (whether or not underscored) when used in this Agreement, shall, except where the context otherwise requires, have the following meanings.

1.1 "Affiliate" means any company, partnership or other entity which directly or indirectly controls, is controlled by or is under common control with the relevant Party to this Agreement. "Control" means the ownership of at least fifty per cent (50%) of the equity of the entity or the legal power to direct the general management and policies of the entity.

1.2 "Agreement" means this Agreement, together with any fully executed Work Orders attached hereto.

1.3 "Background Intellectual Property" means any Intellectual Property owned by or in the possession of a Party (and to which that Party has the necessary rights): (i) as of the date of this Agreement; or (ii) thereafter either (a) acquired independently of this Agreement, or (b) developed independently of this Agreement by any employee of that Party without reference to any of the Confidential Information disclosed by the other Party; in each case, to the extent necessary to manufacture Drug Substance or Drug Product in accordance with this Agreement.

1.4 "Batch" means the total Drug Substance or Drug Product obtained in accordance with cGMP that is: (a) is expected to have uniform character and quality within specified limits, and (b) is produced according to a single manufacturing run during the same cycle of the Process.

1.6 "Batch Record" shall mean the entire documentation per Batch, including but not limited to the applicable Batch Production Records, laboratory control results and in process control results, Deviation Summary Report and the Certificate of Analysis, Certificate of Conformity, summary of Deviations.

1.7 "Batch Production Record" or "BPR" means a record of one or more manufacturing steps of a Batch (e.g. thawing, subcultivation, fermentation, capture, chromatography, aliquoting, packaging) according to the EU GMP Guidelines Part II, Section 6, Subsection 6.5 in German language, based on the MPR and made concurrently with the Manufacture.

1.8 "Business Day" means a day that is not a Saturday, Sunday or a day on which banking institutions in Boston, Massachusetts, USA or in Laupheim, Germany are authorized by law to remain closed.

1.9 "Cell Line" means the clonal cell line that has been designed and engineered to produce the corresponding recombinant protein product shown in Appendix A, particulars of which are set out in Work Orders

1.10 "Certificate of Analysis" or "COA" means a summary of testing results on samples of products or materials together with the evaluation for compliance to a stated Specification by a Qualified Person.

1.11 "Certificate of Conformity" or "COC" means a document issued by Rentschler attesting that a cGMP Product Batch has been manufactured in compliance with cGMP's and that Production Batch Records have been reviewed and approved by Rentschler QA Management.

1.12 "cGMP" or "Good Manufacturing Practices" means current good manufacturing practices as defined in the German Regulation for Manufacturing of Medicinal Products and Active Ingredients, General Biologics Products Standards as promulgated under the US Federal Food Drug and Cosmetic Act at 21 CFR (Chapters 210, 211, 600 and 610), the Guide to Good Manufacturing Practices for Medicinal Products as promulgated under European Directive 2003/94//EC and ICH Guidance Q7A (Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients.

1.13 "cGMP Product" means Product which is required under Work Orders to be manufactured in accordance with cGMP.

1.14 "Commercially Reasonable Efforts" means, with respect to the activities under this Agreement, the efforts and resources used by a reputable biopharmaceutical contract development and manufacturing organization for drug substances and drug products of similar nature, complexity and developmental stage.

1.15 "Conforming Batch" means a Batch which both Dyax's and Rentschler's quality assurance groups have determined to have met the following requirements: (i) has been produced in accordance with cGMP; (ii) meets the Drug Substance or Drug Product Specification; (iii) adheres to all applicable laws; and (iv) which has been produced in accordance with the Manufacturing Description.

1.16 "Deliver", "Delivered" or "Delivery" has the meaning ascribed to it by Section 7.2.

1.17 "Delivery Date" means the date a Batch of Product is Delivered to Dyax.

1.18 "Disposition" means the process by which, in respect of each Batch, the quality assurance groups of both Rentschler and Dyax review all documentation related to cGMP manufacture of such Batch, according to the responsibilities agreed in the Quality Agreement, in order to determine if the Batch is deemed a Conforming or Non-Conforming Batch.

1.19 "Drug Master File" is a submission to the FDA that may be used to provide confidential information on products produced at Rentschler.

1.20 "Drug Product" or "DP" means the final finished dosage form of DX-2930 produced by the filling process from Drug Substance.

1.21 "Drug Product Specification" means the specification for Drug Product as defined in the Quality Agreement.

1.22 "Drug Substance" or "DS" means the bulk purified recombinant protein DX-2930 that is produced by cell culture and purification process from the WCB.

1.23 "Drug Substance Specification" means the specification for Drug Substance as defined in the Quality Agreement.

1.24 "Dyax Confidential Information" means any information that is supplied or made available by Dyax to Rentschler, whether disclosed directly or indirectly in writing, orally, electronically or by drawings or observation. "Dyax Confidential Information" includes, without limitation, Third Party information, business, technical or financial data concerning the WCB, Specifications, Master Batch Records, the Drug Substance or the Drug Product.

1.25 "Dyax Materials" means the materials supplied by Dyax to Rentschler and identified as such in Work Orders hereto.

1.26 "Facility" means Rentschler's development, manufacturing and warehouse facilities located at Erwin-Rentschler-Str. 21, 88471 Laupheim, Germany, or any other Rentschler facility as agreed to in writing by the Parties.

1.27 "Force Majeure" means any cause beyond the reasonable control of the Party in question which for the avoidance of doubt and without prejudice to the generality of the foregoing shall include governmental actions, war, riots, terrorism, civil commotion, fire, flood, epidemic, labour disputes (excluding labour disputes involving the work force or any part thereof of the Party in question), restraints or delays affecting shipping or carriers, inability or delay in obtaining supplies of adequate or suitable materials beyond the relevant Party's reasonable control, currency restrictions and illness of key staff but shall not include failure of the Drug Product to gain regulatory approval or withdrawal of that approval.

1.28 "Intellectual Property" means all know-how, inventions, discoveries, devices, data, patents, designs, copyrights, or other industrial or intellectual property and all applications therefore.

1.29 "Manufacturing Description" or "MAN" means the Master Production instructions according to the EU GMP Guidelines Part II, Section 6, Subsection 6.4 for the USP, DSP or the Drug Product manufacturing process.

1.30 "Master Production Record" or "MPR" means a master production instruction of one manufacturing step (e.g. thawing, subcultivation, fermentation, capture, chromatography, aliquoting, aseptic filling, packaging according to the EU GMP guidelines Part II, Section 6, Subsection 6.4 in German language. An MPR is based on the MAN and serves as a template for the respective BPR.

1.31 "New Intellectual Property" means Intellectual Property arising during and as a direct result of Rentschler performing Services under this Agreement.

1.32 "Non-Conforming Batch" means a Batch which; after review of the Batch Record, is deemed by both Dyax's and Rentschler's quality assurance groups to not meet the requirements of a Conforming Batch.

1.33 "Price" means the price specified in Work Orders for the Services.

1.34 "Process" means the process for the development and production of the Drug Substance or Drug Product, including any improvements or modifications thereto from time to time.

1.35 "Product" means all or any part of the DX-2930 Batch (whether Drug Substance or Drug Product) manufactured (including any sample thereof), particulars of which are set out in Work Orders and includes all derivatives thereof.

1.36 "Product Specification File" means the reference file containing, or referring to files containing, all the information necessary to draft the detailed written instructions on processing, packaging, quality control testing, Batch release and shipping of an investigational or commercial medicinal product according to Annex 13 to the EU GMP Guideline.

1.37 "QA Management" means the organizational unit responsible for cGMP Product disposition.

1.38 "Quality Agreement" shall mean an agreement setting out: (i) the mutually agreed quality standards applicable for the manufacture of the Drug Substance and Drug Product in accordance with cGMP; and (ii) the roles and responsibilities of each Party's personnel in relation to quality assurance matters, in the form to be attached as Appendix D, and which will be executed by the Parties subsequent to the execution of this Agreement.

1.39 "Regulatory Authorities" means the U.S. Food and Drug Administration ("FDA") and the European Medicines Agency ("EMA") or any equivalent governmental regulatory body which the Parties agree in writing or any successor entity thereto.

1. 40 “Release” means Rentschler’s confirmation of the relevant production and control stage of the manufacture of a Batch according to Section 16, paragraph 4, clause 1 of the German Regulation for Manufacturing of Medicinal Products and Active Ingredients and Annex 16, Section 5.3 to the Guide to Good Manufacturing Practices for Medicinal Products as promulgated under European Directive 2003/94//EC.

1.41 "Rentschler Factor" means [*****], including but not limited to, development Services, manufacturing Drug Substance or Drug Product in accordance with Section 1.14, cGMP, the Manufacturing Description, Master Production Record, and/or supporting standard operating procedures.

1.42 "Rentschler Know-How" means all technical and other information and materials, ideas, concepts, methods, procedures, designs, documents, data, inventions, discoveries and works of authorship (in each case, whether or not patentable) known to Rentschler from time to time other than Dyax Confidential Information and information in the public domain.

1.43 "Services" means all or any part of the services that are the subject of this Agreement as described in Appendix A, the particulars of which will be set out in fully executed Work Orders.

1.44 "Specification" means a document containing a list of tests, references to analytical procedures, and appropriate acceptance criteria which are numerical limits, ranges, or other criteria for the tests described, establishing the set of criteria to which the Drug Substance and Drug Product should conform, as agreed upon between the Parties, and includes without limitation, Dyax Substance Specifications, Drug Product Specifications, and Product Specification Files.

1.45 "Terms of Payment" means the terms of payment specified in fully executed Work Orders.

1.46 "Third Party Laboratories" means any Third Party utilized by Rentschler, with Dyax' prior written approval, subcontracted to perform Services.

1.47 "Third Party" means any Party other than Dyax, Rentschler and their respective Affiliates.

1.48 "Work Order" means any such appendix to this Agreement specifying Services. Work Order(s) shall be attached to this Agreement and when approved in writing by both Parties, shall be deemed an integral part hereof. Work Order(s) may be updated and/or amended from time to time by mutual written agreement of the Parties.

1.49 "Working Cell Bank" or "WCB" means the clonal cell line that has been designed and engineered to produce DX-2930, and shall be supplied to Rentschler by Dyax.

2. Scope of Services; Management; Work Orders; Performance

2.1 Services.

2.1.1 A description of the overall scope of the Services which specifies the design, information desired, outcomes desired, estimated duration of the Services and other matters pertinent to completion of the Services is attached to this Agreement as Appendix A. Rentschler shall complete its obligations to perform the Services (including providing the [*****] necessary to successfully achieve the Services) as set forth in Appendix A and shall use Commercially Reasonable Efforts to successfully achieve the timelines set forth in the schedule as provided in Appendix B (the "Schedule"), as it may be amended from time to time in the Work Orders after the execution of this Agreement, which will be deemed to be a part of the Services and incorporated into the terms and conditions of this Agreement.

2.1.2 The core regulatory and/or technical support associated with maintaining the cGMP state of the facility, maintaining quality systems to insure cGMP compliance, completing any investigations resulting from manufacturing and quality activities shall be at [*****]. Work beyond the scope of Services as set out in Appendix A can be provided by Rentschler to Dyax as required, and is subject to mutual written agreement of the Parties. Additionally, Rentschler shall respond in a timely manner to all Dyax inquiries regarding the status of development and manufacturing activities under this Agreement, and shall use Commercially Reasonable Efforts to respond to most inquiries within [*****] Business Days.

2.1.3 When reasonably required by Rentschler, Dyax shall provide to Rentschler suitably skilled, educated and technical employees or representatives with knowledge of Dyax' materials and/or the Services for the purpose of facilitating and assisting the technology transfer to Rentschler to enable Rentschler to perform the Services hereunder. Dyax shall ensure that such employees or representatives will be subject to enforceable obligations of confidentiality preventing them from using any information of a confidential nature which they acquire during such visit; and obey the rules at Rentschler's facility in Erwin-Rentschler-Straße 21, 88471 Laupheim, Germany with regard to health and safety, and cGMP. Additionally, Dyax has the right to have two (2) representatives on-site at the Facility on a fulltime basis during all operational hours during the performance of Services. Such representatives will have access to all areas where Services are being performed and will coordinate with Rentschler in order to minimize the impact of their presence on Rentschler's operations, and will comply with Rentschler's policies and procedures. Rentschler shall provide suitable office space for such representatives with usual and customary support such as high speed internet service.

2.1.4 All Services performed by Rentschler hereunder shall be completed in accordance with all applicable laws and regulations.

2.2 Management.

2.2.1 Rentschler will appoint a Project Leader and Dyax will appoint a Program Manager as its principal point of contact. The Parties shall form a Joint Project Team ("JPT") comprised of representatives from the development, manufacturing, quality, and regulatory functions and the Program Managers from each of the Parties. The JPT shall determine the [*****] relating to the Product at the Facility. The JPT will meet regularly to review progress and [*****] and changes to the Services, [*****] as needed. In the event that the JPT is unable to reach a decision on any matter, the issue shall be referred to the Steering Committee as defined below in Section 2.2.2.

2.2.2 The Parties shall form a Steering Committee which shall comprise a minimum of two (2) and an equal number of representatives ("Representatives") from each of Rentschler and Dyax, and each Party shall notify the other of its elected Representatives. Each Representative shall carry an equal vote and proxy votes may be granted by Representatives to their fellow Representative(s) if they are unable to attend meetings. The Steering Committee will take action by unanimous consent of its Representatives. Each Party shall be entitled to change their respective nominated Representatives at any time and shall promptly give written notice of the change to the other Party. The quorum for the Steering Committee shall be a minimum of two (2) Representa-tives from each Party. The Steering Committee shall meet in person or by tele-phone. The Steering Committee shall meet at such times as the Steering Committee determines reasonably necessary to monitor the progress of the Services and to resolve issues arising therefrom. If the Steering Committee is unable to resolve the matter, it shall be referred to the Chief Business Officer of Rentschler and the Chief Executive Officer of Dyax.

2.3 Work Orders.

2.3.1 Dyax and Rentschler shall complete and execute a Work Order before Services are provided. Each Work Order will include information relating to the specific Services and timelines agreed to by the Parties and the price for such Services. Such timelines and prices shall be consistent with this Agreement unless [*****]. Once signed by both Parties, a Work Order becomes a part of this Agreement, although the terms in a Work Order will govern only Services described in that Work Order. In the event of any inconsistency between this Agreement and any Work Order, this Agreement will prevail. No variation of or addition to this Agreement or any part thereof shall be effective unless in writing and signed on behalf of both Parties.

2.3.2 Dyax considers performance of the Services in accordance with the Schedule in this Agreement and the Forecasting and Ordering Process defined in Article 3 critical. If Rentschler reasonably believes that it will fail to or has failed to complete the Services in a Work Order, in accordance with the Schedule, then Rentschler shall promptly notify Dyax in writing of any such default, but in any case within [*****] Business Days of learning of such default. If Dyax reasonably believes that Rentschler will fail or has failed to complete the Services in a Work order in accordance with the Schedule, then Dyax shall promptly notify Rentschler in writing of any such default, but in any case within [*****] Business Days of learning of such default.

2.3.3 If it is reasonably possible for Rentschler to cure such default by performing or re-performing, as applicable, the incomplete or non-conforming portions of the Services within [*****] calendar days of written notice of default, then Rentschler shall perform or re-perform, as applicable, the incomplete or non-conforming portions of the Services as soon as reasonably possible within such [*****] calendar day period, at [*****] if the default was caused by a Rentschler Factor, at [*****] if not, with the understanding that (i) it will use Commercially Reasonable Efforts to continue, initiate or re-initiate, as applicable, such incomplete or non-conforming portions in the next available space in its facilities, (ii) all Services requiring materials which are purchased by Rentschler are subject to correct and punctual supply of Rentschler’s respective suppliers, and (iii) Rentschler will use its best efforts to promptly procure all materials, components, and supplies required to initiate or re-initiate, as applicable, such incomplete or non-conforming portions.

2.3.4 If it is not reasonably possible for Rentschler to initiate or re-initiate, as applicable, such incomplete or non-conforming portions within [*****] calendar days of written notice of default but it is reasonably possible for Rentschler to initiate or re-initiate, as applicable, such incomplete or non-conforming portions within [*****] calendar days of written notice of default, then (A) Rentschler shall perform or re-perform, as applicable, the incomplete or non-conforming portions of the Services as soon as reasonably possible within such [*****] calendar day period at Rentschler's cost if the default was caused by a Rentschler Factor, at Dyax’ cost if not, and (B) if the default was caused by a Rentschler Factor, the fees payable to Rentschler hereunder with respect to such incomplete or non-conforming portions shall be subject to adjustment as follows: (i) if initiation or re-initiation, as applicable, is commenced after [*****] calendar days, as applicable, the fees applicable to such incomplete or non-conforming portions will be reduced by [*****] percent ([*****]%); (ii) if initiation or re-initiation, as applicable, is commenced on or after [*****] calendar days but before [*****] calendar days, as applicable, the fees applicable to such incomplete or non-conforming

portions will be reduced by [*****] percent ([*****]%); and (iii) if initiation or re-initiation, as applicable, is commenced on or after [*****] calendar days but before [*****] calendar days, as applicable, the fees applicable to such incomplete or non-conforming portions will be reduced by [*****] percent ([*****]%). If initiation or re-initiation of the incomplete or non-conforming portions of the Services cannot be commenced within [*****] calendar days or if the Parties cannot agree on a schedule for initiation or re-initiation, as applicable, Dyax may, at its option, terminate this Agreement immediately upon written notice to Rentschler.

2.4 Materials.

2.4.1 Rentschler shall be responsible for procuring all materials required to perform the Services except for the WCB and quality control reagents and standards which shall be supplied by Dyax. All Services requiring materials which are purchased by Rentschler are subject to correct and punctual supply of Rentschler's respective suppliers. Rentschler shall place orders for materials in accordance with the order lead times of the respective suppliers and when required, to allow sufficient time for sampling, testing, and Release by Rentschler of such materials to achieve on-time performance of the Services.

2.4.2 Rentschler and Dyax will develop safety stock policies for the Phase III clinical/formal stability batches and for the process validation and commercial batches.

2.4.3 Following completion of the [*****] Phase III clinical/formal stability batches Rentschler shall develop a bill of materials for a Drug Substance Batch and a Drug Product Batch, and the Parties will negotiate in good faith to approve the bill of materials. The bill of materials may be changed from time to time upon mutual agreement of the Parties.

2.4.4 Materials purchased by Rentschler and paid for by Dyax which are not used in the performance of the Services will be the property of Dyax.

2.5 Specification. Specifications will be agreed to by the Parties in writing prior to the initiation of the cGMP Product manufacturing. Current versions on-file with the FDA for both Drug Substance and Drug Product are set forth provided in Appendix C attached hereto for information only. Notwithstanding the above, the Parties hereby confirm that Specifications may change over time and shall be effective only if reduced to writing and signed by the quality and/or regulatory representative of both Parties, which quality and/or regulatory representative shall be nominated from time to time by each Party. Any such amendments to Specifications must also reflect, in writing, any corresponding changes to the timing of the Services and any changes to the Pricing detailed in the applicable Work Order.

2.6 Facility Visits and Audits. Dyax's representatives may visit the Facility to observe the progress of, or to audit the Services ("Routine Visits"). Dyax may also have the Facility audited and inspected by competent authorities as required by cGMP. Dyax shall request an appointment for such visits with Rentschler a minimum of [*****] calendar days before and the Parties will agree on the dates and the scope. Such audit, in excess of [*****] in duration by [*****] auditors per year, [*****], unless agreed otherwise by the Parties in writing. The Parties agree that audits and inspections by Regulatory Authorities can be agreed upon by the Parties within a shorter timeframe. In addition to such Routine Visits, Dyax shall have the right to, and Rentschler will without undue delay allow for, audits caused by events which could put the quality of Dyax' Product at risk ("For-Cause Audits"). Rentschler will have the right to audit any sites or laboratories used by Dyax (except for Dyax's contract manufacturers) or any Third Party analytical subcontractor engaged by Dyax in connection with any materials provided by or on behalf of Dyax to Rentschler as part of the Services.

3. Manufacture and Supply; Forecasting and Ordering

3.1 Production of Drug Substance and Drug Product. Dyax may order and purchase from Rentschler and Rentschler shall manufacture and Deliver to Dyax quantities of cGMP Drug Substance and cGMP Drug Product from time to time in accordance with the terms and conditions set out in this Agreement. Drug Product will be produced from Batches manufactured by Rentschler in the cGMP Facility under this Agreement.

3.2 Drug Substance Ordering Process.

3.2.1 In the [*****] month of each calendar [*****] Dyax will provide Rentschler a non-binding cGMP Drug Substance demand forecast ("Drug Substance Forecast") for the next [*****], beginning with the current [*****]. The Drug Substance Forecast shall specify the product code(s), bioreactor size(s), and the number of Batches Delivered in each [*****].

The Drug Substance Forecast is prepared for information only and it shall not be a requirement that actual orders or manufacturing periods correspond with such forecast.

3.2.2 Within [*****] Business Days of receipt of this forecast Rentschler will notify Dyax if the Drug Substance Forecast is accepted or rejected. If it is rejected, the Parties will negotiate in good faith to prepare a mutually acceptable Drug Substance Forecast. Both Parties recognize the cost benefits of combining individual Batches into one set of consecutive Batches each calendar year and agree to do so whenever possible. The Drug Substance Forecast is prepared for information only and it shall not be a requirement that actual orders or manufacturing periods correspond with such forecast.

3.2.3 Dyax may [*****] per calendar [*****] place a Work Order for cGMP Drug Substance specifying the product code(s), the bioreactor size(s) and the Delivery Date(s) for the Batch(es). The Delivery Date shall be a minimum of [*****] calendar days later than the date the Work Order is placed. Within [*****] Business Days following receipt of such Work Order from Dyax, and provided that the Work Order is consistent with the most recently accepted Drug Substance Forecast, Rentschler will notify Dyax in writing that it has accepted the Work Order and provide to Dyax a production schedule ("Drug Substance Production Schedule"), including the WCB thaw date(s) and the Delivery Date(s), for the Batch(es). If Rentschler does not notify Dyax in writing that Rentschler has accepted or rejected the Work Order within [*****] Business Days, the Work Order shall be deemed accepted. If the Work Order is not consistent with the most recently accepted Drug Substance Forecast, the Parties shall negotiate in good faith to prepare a mutually acceptable Drug Substance Production Schedule.

3.2.4 Within [*****] Business Days following receipt of the Drug Substance Production Schedule from Rentschler, Dyax shall communicate in writing to Rentschler that the Drug Substance Production Schedule is acceptable and the Work Order becomes binding to both Parties. Alternatively, Dyax shall communicate in writing to Rentschler that the Drug Substance Production Schedule is not acceptable, and the Parties shall negotiate in good faith to prepare a mutually acceptable Drug Production Schedule.

3.3 Drug Product Ordering Process.

3.3.1 In the first [*****] of each calendar [*****] Dyax shall provide Rentschler a non-binding cGMP Drug Product demand forecast ("Drug Product Forecast") for the next [*****], beginning with the current [*****]. The Drug Product Forecast shall specify the product code(s), the Batch size(s), and the number of Batches in each [*****]. The Drug Product Forecast is prepared to facilitate long-range production planning and it shall not be a requirement that orders or manufacturing periods correspond with such forecast.

3.3.2 Within [*****] Business Days of receipt of the Drug Product Forecast, Rentschler shall notify Dyax if it is accepted or rejected. If the Drug Product Forecast is not accepted the Parties shall negotiate in good faith to prepare a mutually acceptable Drug Product Forecast.

3.3.3 Dyax may [*****] per calendar [*****] place a Work Order for cGMP Drug Product specifying the product code(s), the Batch size(s) and the Delivery Date(s) for the Batch(es). The Delivery Date(s) shall be a minimum of [*****] calendar days later than the date the Work Order was placed. Within [*****] Business Days following receipt of such Work Order from Dyax, and provided that the Work Order is consistent with the most recently accepted Drug Product Forecast, Rentschler will accept the Work Order and provide the production schedule, including the Drug Substance thaw date(s) and Delivery Date(s), for the Batch(es). If Rentschler does not notify Dyax in writing that Rentschler has accepted the Work Order within [*****] Business Days, the Work Order shall be deemed accepted. If the Work Order is not consistent with the most recently accepted Drug Product Forecast, the Parties shall negotiate in good faith to prepare a mutually acceptable production schedule.

3.3.4 Within [*****] Business Days following receipt of the Drug Product Production Schedule from Rentschler, Dyax shall communicate in writing to Rentschler that the Drug Product Production Schedule is acceptable and the Work Order becomes binding to both Parties. Alternatively, Dyax shall communicate in writing to Rentschler that the Drug Product Production Schedule is not acceptable, and the Parties shall negotiate in good faith to prepare a mutually acceptable Drug Production Schedule.

3.4 Cancellation of Binding Work Orders.

3.4.1 If Dyax notifies Rentschler in writing that it is cancelling a binding Drug Substance Work Order, it shall pay Rentschler a fee ("Exit Fee") is as follows:



Cancellation period prior to the Delivery Date	Exit Fee (percentage of total fees for the DS Work Order)
More than [*****]	[*****]
[***] - [***]	[*****]%
[***] - [***]	[*****]%
[***] - [***]	[*****]%
[*****] and less	[*****]%

3.4.2 If Dyax cancels a binding Drug Product Work Order, the exit fee is as follows:



Cancellation period prior to the Delivery Date	Exit fee (percentage of total fees for the DS Work Order)
More than [*****]	[*****]
[***] - [***]	[*****]%
[***] - [***]	[*****]%
[***] - [***]	[*****]%
[*****] and less	[*****]%

3.4.3 Notwithstanding Section 3.4.1 and 3.4.2, Rentschler shall use Commercially Reasonable Efforts to mitigate any damages incurred as a result of the cancellation of a binding Work Order. If Rentschler incurs no damage or less damage as a result of the cancellation of the binding Drug Substance or Drug Product Work Order, there will be [*****]. This applies in particular, if Rentschler can use the respective scheduled production time for another order.

4. Quality and Regulatory Matters

4.2 New Products in the Facility. Rentschler recognizes that the addition of new products into its multi-product facilities could have an impact on the regulatory status of Drug Substance and Drug Product. Rentschler has developed and adheres to the Position Statement “Product Separation of High Potent Drug Products and Active Pharmaceutical Ingredients” (the "Position Statement" as attached in Appendix D). If Rentschler makes any changes to the Position Statement, it will provide written notification to Dyax within [*****] calendar days. After the earlier of the first Pre-Approval Inspection by any Regulatory Agency for the Product is completed, or the first Marketing Application is submitted, Rentschler will provide to Dyax as a part of the PQR the number of products introduced that year and their substance category as defined in Appendix D. This annual notification will occur within [*****] days of the anniversary date of the marketing authorization approval.

4.3 Changes Mandated by Regulatory Authority.

4.3.1 If Facility, equipment, process or system changes, including without limitation a change to the Product Specification File, are required of Rentschler as a result of a change in the regulatory requirements of a Regulatory Authority, and such regulatory changes apply solely and specifically to the production and supply of Drug Substance and/or Drug Product, then Dyax and Rentschler will review such requirements and agree in writing to such regulatory changes, and Dyax shall bear 100% of the reasonable costs thereof. If such changes are initiated by the introduction of another product in the facility, than these costs shall be the sole responsibility of Rentschler.

4.3.2 Notwithstanding anything in Section 4.3.1, if such regulatory changes as described in Section 4.3.1 apply generally to Drug Substance and/or Drug Product as well as to other products produced by Rentschler for itself or for Third Parties, then Rentschler shall bear the cost of those changes.

4.3.3 If Dyax requests Rentschler to comply with GMP as regulated under jurisdictions other than FDA and EMA, Dyax will provide Rentschler with information required to comply with such GMP rules and the Parties will mutually agree if and how the additional requirement can be met.

4.4 Disposition and Batch Record Review. Rentschler shall carry out Release or reject of each Batch of Drug Substance and Drug Product. On completion of Release of each Batch, and no later than [*****] Business Days following the performance of the final filtration and filling step, Rentschler shall provide the Batch Record for such Batch to Dyax for review. Within [*****] Business Days following delivery of the complete Batch Record to Dyax, Dyax shall confirm in writing Dyax accepts Rentschler's findings detailed in the Batch Record, or shall submit a complaint in accordance with the Quality Agreement in the form annexed thereto. Dyax shall be taken to have accepted such Batch on the earlier of actual notification by Dyax of its acceptance of Rentschler's findings in the Batch Record or in the absence of notice of rejection of such findings or the Batch within [*****] Business Days from such delivery of the Batch Record. Should an error or omission have occurred, Rentschler shall have [*****] Business Days to correct same, after which the [*****] Business Day period for Dyax to review shall restart.

4.5 Non-Conforming Batch of Drug Substance and/or Drug Product. The provisions below shall apply in the event that: (i) during Disposition of a Batch, it is ascertained that such Batch is a Non-Conforming Batch; or (ii) Dyax submits a complaint under the Quality Agreement in respect of a Batch within the period(s) set out in Section 4.4 above and Rentschler accepts that such Batch is a Non-Conforming Batch; or (iii) an independent expert appointed under the Quality Agreement determines that a Batch is a Non-Conforming Batch.

4.5.1 The Non-Conforming Batch shall not be Delivered to Dyax, unless Dyax requests it. If Dyax requests Delivery of the Non-Conforming Batch, Rentschler shall Deliver such Non-Conforming Batch in accordance with Section 7.

4.5.2 If the Non-Conforming Batch was manufactured [*****] of the process validation Batches and arose other than as a result of a Rentschler Factor, Dyax shall be obliged to make all payments associated with the manufacture and Disposition of such Batch. If the Non-Conforming Batch was not the result of a Rentschler Factor, and Dyax wishes to replace the Non-Conforming Batch, the Parties will negotiate in good faith to schedule a new Batch. If the Non-Conforming Batch was manufactured [*****] of the process validations Batches then Dyax shall not be obliged to make payments associated with the manufacture and Disposition of such Batch.

4.5.3 The following provisions shall apply if the Non-Conforming Batch was manufactured prior to completion of the process validation Batches and arose as a result of a Rentschler Factor or if the Non-Conforming Batch was manufactured after completion of the process validation Batches : (i) if Dyax wishes to take Delivery of the Non-Conforming Batch under Section 4.5.1, the Parties shall agree in writing to a reduction in the consideration payable in respect of such Batch; or (ii) if Dyax does not wish to take Delivery of the Non-Conforming Batch under Section 4.5.1, manufacture of a further Batch under Section 4.5.2 shall be undertaken at Rentschler's cost and expense and as soon as reasonably practicable and the provisions of Section 2.3.4 shall apply. In the case of a destruction of Drug Substance during the manufacture of a Non-Conforming Batch of Drug Product for which Dyax does not wish to take Delivery, Rentschler shall either manufacture an equal quantity of Drug Substance at Rentschler’s cost once more or shall provide a credit to Dyax equal to the value of the destroyed Drug Substance on the next Batch of Drug Substance manufactured. In this case the value of the destroyed Drug Substance will be calculated by multiplying the Drug Substance Batch Fee times the grams of Drug Substance destroyed in the manufacture of the Non-Conforming Batch of Drug Product divided by the total grams of Drug Substance in the next Batch.

4.5.4 In the event that Dyax claims that any Batch was a Non-Conforming Batch, subsequent to Disposition and such non-conformance could not have been reasonably discovered by Dyax during the Disposition period described in Section 3.4, then Dyax shall notify Rentschler in writing promptly after discovery of such latent defect and the Parties shall meet to discuss such matter. If the Parties are unable to agree, after consultation with senior management of both Parties, then the matter shall be referred to an independent expert in accordance with the Quality Agreement.

4.6 Regulatory Assistance. Dyax shall have the right and responsibility for determining regulatory strategy, decisions and actions relating to the Drug Substance and Drug Product, provided that Rentschler shall have the right and responsibility for determining regulatory strategy, decisions and actions to the extent relating to (i) the Facility; (ii) Rentschler's quality systems; (iii) any requirement imposed on Rentschler by a Regulatory Authority or (iv) any other commitments made by Rentschler to other customers (each an "Rentschler Regulatory Responsibility"). Dyax shall therefore consult with Rentschler in relation to the Chemistry, Manufacturing and Controls (CMC) section of any submissions to Regulatory Authorities before submission to such Regulatory Authorities and Dyax shall not make any change to its regulatory filings, which may have an impact on any Rentschler Regulatory Responsibility without prior agreement with Rentschler.

5. Intellectual Property

5.1 Background Intellectual Property. Nothing in this Agreement shall affect the ownership by either Party of any Intellectual Property owned by or in the possession of that Party at the date of this Agreement or Intellectual Property developed independently of this Agreement by any employee of that Party without reference to any of the Confidential Information disclosed by the other Party.

5.3 New Intellectual Property. Any New Intellectual Property shall belong to Dyax. Rentschler shall, and shall ensure that its employees shall, at Dyax's expense, perform all acts and execute all instruments necessary to vest in Dyax all rights, title and interest in the registrations together with all patents and patent applications or otherwise for such New Intellectual Property. All fees, costs and expenses connected with the filing, prosecution and maintenance of a patent or other protection [*****]. Dyax’s exercise of its option to own such invention is conditional on Dyax’ reimbursement of the employee invention compensation claims arising under the German Law on Employee Inventions (Arbeitnehmererfindungsgesetz).

5.4 Non-exclusive license under New Intellectual Property. Save for the Cell Line, Dyax hereby grants to Rentschler a royalty-free, non-exclusive, world-wide license under any such New Intellectual Property developed by Rentschler hereunder for any use other than for production of the Drug Substance or the Drug Product or of any recombinant protein that inhibits the activity of plasma kallikrein, and where such can be used without the use of any Dyax Confidential Information. Nothing contained in Section 5 shall prevent Rentschler from exercising the rights granted under this Section 5.4. Dyax also hereby grants to Rentschler a royalty-free license under the New Intellectual Property for production of the Drug Substance and Drug Product by Rentschler on behalf of Dyax under the terms of this Agreement.

6. Representations, Warranties, Liability and Indemnity


6.1	General. Each Party warrants to the other that:

6.1.1 it has the necessary right and authority to enter into this Agreement and that to the best of its knowledge as of the date of this Agreement it is the rightful owner or licensee of the Intellectual Property used hereunder;

6.1.2 to the best of its knowledge as of the date of this Agreement, Rentschler's use of Background Intellectual Property pursuant to this Agreement for the purposes set out in this Agreement will not infringe the Intellectual Property of a Third Party; and

6.1.3 each Party shall secure and maintain in full force and effect during the term of this Agreement policies of insurance providing coverage for (a) Employer's Liability and (b) Public and Products Liability having policy limits, deductibles and other terms appropriate to the conduct of that Party's business, provided that evidence of such insurance in the form of a broker's letter will be made available for examination upon request of the other Party.

6.2 Undertakings of Rentschler. Rentschler undertakes to Dyax that:

6.2.1 The Services will be performed in accordance with the terms of this Agreement.

6.2.2 It has such permits, licenses and authorizations as are necessary to own its respective properties conduct its business and perform its obligations hereunder.

6.2.3 It, or any of its employees, is not currently debarred, suspended, or otherwise excluded by the FDA or any other Regulatory Authority from conducting business and shall not knowingly use in connection with this Agreement or the services of any person debarred by the FDA.

6.2.4 It will use reasonable endeavors to keep the Cell Line, the Drug Substance, the Drug Product, the Dyax Materials, and the Dyax Confidential Information secure and safe from loss and damage in such manner as Rentschler stores its own material of similar nature.

6.2.5 It will not part with possession of the Cell Line, the Drug Substance, the Drug Product, the Dyax Materials, or the Dyax Confidential Information, except solely for the purpose of services at any Third Party Laboratories that may be required and only with Dyax's advance written permission.

6.2.6 It will not use the Cell Line, Dyax Materials, or the Dyax Confidential Information (or any part thereof) for any other purpose other than performance of Services under this Agreement.

6.2.7 All of the Services will be performed at the Facility unless prior written approval is obtained from Dyax, such approval not to be unreasonably withheld.

6.2.8 It will use only Third Party Laboratories bound to obligations of confidence and assignment rights substantially similar to those obligations of confidence and assignment rights imposed on Rentschler under this Agreement.

6.2.9 Unencumbered title to Drug Substance and/or Drug Product will be conveyed to Dyax upon Delivery.

6.2.10 Rentschler has the necessary corporate authorizations to enter into this Agreement.

6.3 Undertakings of Dyax. Dyax undertakes to Rentschler that:

6.3.1 Dyax shall supply to Rentschler only the required number of vials of the WCB, and warrants that the master cell bank and the remainder of the WCB are stored safely in another place.

6.3.2 Dyax shall supply to Rentschler the Dyax Confidential Information, together with full details of any hazards relating to the Dyax Materials and their storage and use (if applicable). For the avoidance of doubt, the Dyax Materials and the Dyax Confidential Information supplied to Rentschler remain the property of Dyax.

6.3.2 Dyax hereby grants Rentschler the non-exclusive right to use the Dyax Materials, and the Dyax Confidential Information for the purpose of this Agreement.

6.3.3 Dyax has the necessary corporate authority to enter into this Agreement.

6.3.4 To Dyax's knowledge without independent investigation, as of the Effective Date of this Agreement, Dyax has the right to supply the Dyax Materials and the Dyax Confidential Information to Rentschler and the necessary rights to non-exclusively license or otherwise permit Rentschler to use the same for the purpose of the Services; and Dyax shall not do or cause anything to be done which would adversely affect their ownership or entitlement to use the same for those purposes.

6.4 Indemnification By Dyax. Dyax will defend, indemnify and hold harmless Rentschler, its Affiliates and their respective directors, officers, employees and agents (the "Rentschler Indemnified Parties") from and against all claims, demands, liabilities, damages, penalties, fines, costs and expenses, including reasonable attorneys' and expert fees and costs, and costs or amounts paid to settle (collectively, "Losses") arising from or occurring as a result of a third party's claim (including any third party product liability or infringement claim), action, suit, judgment or settlement to the extent such Losses are due to or based upon: (i) the manufacture of the Product by Dyax or its contract manufacturer; (ii) negligence, recklessness, bad faith, intentional wrongful acts or omissions or violations of applicable law or regulation by or of Dyax or its Affiliates or their respective directors, officers, employees or agents; or (iii) the breach by Dyax of the terms of, or the inaccuracy of any representation or warranty made by it in this Agreement; except, in each case, to the extent that such Losses arise out of, and are allocable to any cause set forth in Section 6.5(b)(i) or (ii).

6.5 Indemnification By Rentschler. Rentschler will defend, indemnify and hold harmless Dyax, its Affiliates and licensees and their respective directors, officers, employees and agents (the "Dyax Indemnified parties") from and against all Losses arising from or occurring as a result of a third party's claim (including any third party product liability or infringement claim), action, suit, judgment or settlement to the extent such Losses are due to or based upon: (i) the negligence, recklessness, bad faith, intentional wrongful acts or omissions or violations of applicable law or regulation by or of Rentschler or its Affiliates or their respective directors, officers, employees or agents; or (ii) the breach by Rentschler of the terms of, or the inaccuracy of any representation or warranty made by it in this Agreement; except, in each case, to the extent that such Losses arise out of, and are allocable to any cause set forth in Section 6.4(a)(i), (ii) or (iii).

6.6 Claims for Indemnification.

6.6.1 A Person entitled to indemnification under Sections 6.4 or 6.5 (an "Indemnified Party") shall give prompt written notification to the party from whom indemnification is sought (the "Indemnifying Party") of the commencement of any action, suit or proceeding relating to a third party claim for which indemnification may be sought or, if earlier, upon the assertion of any such claim by a third party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a third party claim as provided in this Section 6.6 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to give notice).

6.6.2 Within [*****] calendar days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such action, suit, proceeding or claim with counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense.

6.6.3 The party not controlling such defense may participate therein at its own expense; provided that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith; provided further that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel in any one jurisdiction for all Indemnified parties.

6.6.4 The party controlling such defense shall keep the other party advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider recommendations made by the other party with respect thereto.

6.6.5 The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed. The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that imposes any liability or obligation on the Indemnified Party. For the avoidance of doubt, the Indemnifying Party is not obliged to act contrary to a judgment or to an official directive, even if not final and conclusive.

6.7 No Consequential or Punitive Damages. NEITHER PARTY HERETO WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES; PROVIDED THAT NOTHING IN THIS SECTION 6.7 IS INTENDED TO LIMIT OR RESTRICT (A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY WITH RESPECT TO THIRD PARTY CLAIMS,OR (B) ANY CLAIMS WITH RESPECT TO A BREACH OF A PARTY'S OBLIGATIONS OF CONFIDENTIALITY IN ARTICLE 10.

6.8 Intellectual Property Indemnity. Each Party ("the First Party") shall be liable for and indemnify the other ("the Second Party") against any liability, loss, claim, damage, proceedings and costs whatsoever arising out of any actual or suspected infringement of any Third Party Intellectual Property, including the requirement to pay a license fee to such Third Party for use of such Third Party Intellectual Property during the work under this Agreement (an "IP Infringement") as a result of the Second Party's use in its performance of the work under this Agreement of the Background Intellectual Property provided by the First Party, provided that the Second Party: (a) gives notice to the First Party of any IP Infringement forthwith on becoming aware of the same and ceases to use the Background Intellectual Property which is the subject of the IP Infringement; (b) gives the First Party the sole conduct of the defense to any claim or action in respect of the IP Infringement and does not at any time admit liability or otherwise settle or compromise or attempt to settle or compromise the said claim or action except upon the express instructions of the First Party; and (c) acts in accordance with the reasonable instructions of the First Party and gives the First Party such assistance as it shall reasonably require in respect of the conduct of such defense. Notwithstanding the provisions of this Section, the First Party's liability to indemnify the Second Party shall cease in respect of continuing use by the Second Party of the Background Intellectual Property which is the subject of the IP Infringement following either: (a) notification by the First Party to the Second Party that the Background Intellectual Property provided by the First Party is actually or is believed by the First Party to be the subject of an IP Infringement; or (b) the Second Party becoming aware that the Background Intellectual Property provided by the First Party is the subject of an IP Infringement; except where the First Party agrees or insists that the Second Party shall continue to use the Intellectual Property of the First Party which is the subject of the IP Infringement. For the avoidance of doubt, the Second Party is not obliged to act contrary to a judgment or to an official directive, even if not final and conclusive.

6.9 Liability for Use of Drug Substance and Drug Product. Liability in respect of the use of the Drug Substance Delivered to Dyax and any Drug Product produced therefrom shall rest solely on Dyax and Dyax shall indemnify Rentschler against any liability, loss, damages, costs, legal costs, professional and other expenses whatsoever incurred or suffered by Rentschler arising out of or in respect of such use of the Drug Substance following its Delivery to Dyax and any Drug Product produced therefrom; provided however, that the forgoing shall not apply to any liability arising out of Rentschler's gross negligence or willful misconduct.

6.10 Liability for Use of the Process. Liability in respect of use or operation of the Process (or any part of the Process), by or on behalf of Dyax, other than by Rentschler under the terms of this Agreement and other than as a result of an infringement of Third Party Intellectual Property due to the incorporation of Rentschler's Background Intellectual Property for which Rentschler is obliged to indemnify Dyax under Section 6.8, shall rest solely on Dyax. Dyax shall indemnify Rentschler against any liability, loss, damages, costs, legal costs, professional and other expenses whatsoever incurred or suffered by Rentschler arising out of or in respect of use or operation of the Process by or on behalf of Dyax (other than by Rentschler under this Agreement).

6.11 Limitations.

6.11.1 Dyax's sole and exclusive remedy in relation to a Non-Conforming Batch shall be limited to those remedies set out in Section 2.3.4 and 4.5. Other than: (i) with regard to liability arising out of Article 6; or (ii) in respect of Rentschler's gross negligence or willful misconductwhich results in a failure to progress the work under this Agreement in a reasonably timely manner, Rentschler's total liability (whether for breach of contract, negligence, breach of statutory duty and/or other tort, or otherwise, including any associated legal costs) in connection with or as a result of the work carried out under this Agreement shall be limited to the price paid or payable for the Batch (in the case of a Drug Product Batch, including the price paid or payable for the Drug Substance in the Batch) in respect of which such liability arises plus all costs for Consumables, Subcontracted Work, associated with such Batch.

6.11.2 Neither Party shall be liable to the other for any indirect, consequential or special loss, loss of profits or damage howsoever arising.

6.12 Survival. The obligations of Rentschler and Dyax and under this Article 6 shall survive the termination or expiration of this Agreement, subject to the statutory periods of limitation of the Governing Law.

7. Supply of Materials; Delivery; Transportation of Product

7.1 Supply of Materials by Dyax. If requested by Rentschler, Dyax will make all materials to be supplied by it and all required information available to Rentschler DDP Facility (Incoterms 2010). Dyax is responsible for the suitability of the materials and information for the Services. Upon Dyax' request Rentschler will liaise with and assist Dyax or Dyax' nominated transportation agent to arrange transportation of products in the name of Dyax from or to the production site. Dyax shall inform Rentschler´s incoming goods department ([*****]) and the project manager of any Delivery to be made at least three Business Days before any such Delivery to Rentschler is initiated.

7.2 Delivery. As long as the respective manufacture processes are not validated, Dyax’ claims for Delivery do not arise before the Release of the respective Batch. Conforming Batches may be Delivered to Dyax. All shipments will be Ex Works (EXW) (IncoTerms 2010) from the Facility, except that Rentschler will be responsible for packaging the Product as specified in the Batch Production Record, and Dyax shall bear all shipping and insurance charges as set out in the applicable Work Order, which means that (a) Product will be Delivered from the Facility to Dyax's carrier; and (b) risk and title to Product pass to Dyax upon Delivery to the carrier. The Drug Substance Delivery Date shall be no longer than [*****] weeks from the WCB thaw date and for the Drug Product Delivery Date shall be no longer than [*****] weeks from the Drug Substance thaw date, unless otherwise agreed by the Parties.

7.3 Packaging and Labeling. Unless otherwise agreed, Rentschler shall package and label Product for Delivery in accordance with its standard operating procedures and in accordance with required shipping conditions. It shall be the responsibility of Dyax to inform Rentschler in writing in advance of any special packaging and labeling requirements for Product. All additional costs and expenses of whatever nature incurred by Rentschler in complying with such special requirements must be agreed to in advance in writing and will be charged to Dyax in addition to the Price.

7.4 Acceptance of Delivery. Dyax shall diligently examine the Product as soon as practicable after receipt. Notice of all claims arising out of:

7.4.1 Visible damage to or total or partial loss of Product in transit will be given in writing to Rentschler and the carrier within [*****] Business Days of receipt by Dyax; or

7.4.2 Non-Delivery will be given in writing to Rentschler and the carrier within [*****] calendar days after the receipt by Dyax of Rentschler's dispatch notice.

7.5 Damage Claims. Dyax shall make damaged Product and associated packaging materials available for inspection and shall comply with the reasonable requirements of any insurance policy covering the Product, for which notification has been given by Rentschler to Dyax. Rentschler shall offer Dyax all reasonable assistance in pursuing any claims arising out of the transportation of Product.

8. Records. Records of Services shall be kept available for Dyax's review at the Facility where the Services were performed (or a Third Party facility on behalf of the Rentschler facility). Rentschler will retain batch, laboratory and other technical records ("Records") of Services for the longer of ten (10) years or for the minimum period required by applicable law and consistent with FDA regulations and guidance relating to the manufacture or testing of products intended to support an application for regulatory approval. To the extent that raw data from Services or descriptions of any of Rentschler's protocols, test methods, or SOPs are not included in the Dyax-approved protocol Work Order, or report pertaining to any particular Service and are required by a competent regulatory authority, Rentschler will upon written request by Dyax provide a copy of such raw data or relevant portions of such protocols, test methods, or SOPs to be used solely for purposes of such regulatory submission under the provisions of Confidentiality in accordance with Section 10. In the event Rentschler proposes to dispose of Records Rentschler shall provide Dyax written notice thereof. If within [*****] calendar days after such notice Dyax requests any Records, Rentschler shall provide to Dyax at Dyax's expense such Records rather than disposing thereof. Rentschler may, however, retain copies of any Records as are reasonably necessary for regulatory or insurance purposes, and to abide by the relevant commercial and tax law provisions, subject to Rentschler's obligation of confidentiality. Notwithstanding anything to the contrary in this Agreement, Rentschler shall not be required to destroy any computer files stored securely by Rentschler that are created during automatic system back-up.

9. Price and Terms of Payment

9.1 Price. Dyax shall pay the Price in accordance with the relevant provisions detailed in the relevant mutually agreed upon Work Order. The price in the Work Orders shall be the same as the price in Appendix A of this Agreement, subject to the provisions of Section 9.2.3. Notwithstanding the foregoing, if one Party provides a justification for a Price change and the other Party approves the change, such approval shall not be unreasonably withheld, then the Price in the Work Order shall be the new mutually agreed Price. The Fees are exclusive of costs for materials provided by Rentschler and for external services. In respect of those costs, Rentschler has provided an estimate in the respective offer, but the final payment in respect of the same will depend on the real expense, subject to the quantity used or the scope of the external services and any changes in market price. Dyax will reimburse the costs for materials [*****] without handling fee; except that with respect to manufacture of process validation and commercial Batches, Dyax will not reimburse Rentschler for use of materials which are in excess of the quantities specified in the bill of materials or any agreed backup materials. Storage of Drug Substance manufactured by Rentschler for Dyax is inclusive for two months after Rentschler's Release.

9.2 Costs of Further Use and Liability for Administrative Procedures.

9.2.1 All costs concerning the further use or importation by Dyax of Drug Substance or Drug Product are to be borne by Dyax, including any administration fees connected with the marketing of the Drug Product, even if the respective administrative authority should charge Rentschler directly. Dyax will ensure that the respective amounts are received by Rentschler on Rentschler´s bank account at least [*****] Business Days before the fee becomes due. Dyax will inform Rentschler about any administrative requirement applicable to Rentschler of any country Dyax is marketing its Product as soon as possible.

9.2.2 If Rentschler's cooperation is required in any administrative procedures, especially in procedures of admission, customs or of importation, Dyax indemnifies Rentschler from any liability which may arise out of this cooperation. That applies, in particular, in cases, where Rentschler, on Dyax' request, makes statements or applications at or towards governmental authorities or where Rentschler participates in making those statements or applications.

9.2.3 Beginning on the first anniversary of the Effective Date, and on each succeeding anniversary of the Effective Date during the term of this Agreement, the then current price for a batch of cGMP Product shall be increased by [*****].

9.3 Payment. Payment will be made in accordance with relevant mutually agreed upon Work Orders. All payments shall be made free and clear of and without deduction or deferment in respect of any disputes or claims whatsoever an d/or as far as is legally possible in respect of any taxes imposed by or under the authority of any government or public authority. Payment must be made within [*****] calendar days of receipt by Dyax of a correct invoice. Payment shall be made without deduction, deferment, set-off, lien or counterclaim of any nature. Payment shall be made in dollars by wire transfer to the bank account designated by Rentschler.

9.4 Taxes. Any payment under this Agreement is exclusive of any Value Added Tax (or other tax) that may apply and shall be paid gross, without deductions or set-offs, whether by way of withholding or other income taxes, and Dyax shall ensure that such sum is paid to Rentschler as shall, after deduction of such withholding or other income taxes, be equivalent to the consideration payable under this Agreement.

9.5 Payment Default. In the event of a default of payment on due date, interest shall accrue on any amount overdue at the annual rate of [*****]% above the prime rate of interest published from time to time in the Wall Street Journal, interest to accrue on a [*****] basis both before and after judgment

9.6 Invoice Terms. The invoices will be issued according the payment plan in the Work Order. The payment plan for Services will be typically as follows: [*****] per cent ([*****]%) of the [*****] upon [*****] of Services as set forth in the corresponding Work Order, [*****] per cent ([*****]%) after the [*****] of the respective Services and [*****] per cent ([*****]%) after issuance of final documentation associated with the respective Services.

10. Confidentiality

10.1 Confidential Information. During the Term and for a period of ten (10) years after any termination or expiration thereof, each Party agrees to keep in confidence and not to disclose to any Third Party, or use for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement, any Confidential Information of the other Party. As used herein, "Confidential Information" shall mean all trade secrets or confidential or proprietary information designated as such in writing by the disclosing Party, whether by letter or by the use of an appropriate stamp or legend, prior to or at the time any such trade secret or confidential or proprietary information is disclosed by the disclosing Party to the receiving Party. Notwithstanding the foregoing, information which is orally or visually disclosed to the receiving Party by the disclosing Party, or is disclosed in writing without an appropriate letter, stamp or legend, shall constitute Confidential Information if (x) it would be apparent to a reasonable person, familiar with the disclosing Party's business and the industry in which it operates, that such information is of a confidential or proprietary nature, the maintenance of which is important to the disclosing Party, or if (y) the disclosing Party, within thirty (30) calendar days after such disclosure, Delivers to the receiving Party a written document or documents describing such information and referencing the place and date of such oral, visual or written disclosure and the names of the employees or officers of the receiving Party to whom such disclosure was made. The restrictions on the disclosure and use of Confidential Information set forth in the first sentence of this Section 10.1 shall not apply to any Confidential Information that: (i) was known by the receiving Party prior to disclosure by the disclosing Party hereunder (as evidenced by the receiving Party's written records); (ii) is or becomes part of the public domain through no fault of the receiving Party; (iii) is disclosed to the receiving Party by a Third Party having a legal right to make such a disclosure without violating any confidentiality or non-use obligation that such Third Party has to the disclosing Party; or (iv) is independently developed by the receiving Party (as evidenced by the receiving Party's written records).

Notwithstanding the obligations of confidentiality and non-use set forth above, a receiving Party may provide Confidential Information disclosed to it to (i) governmental or other Regulatory Authorities in order to obtain patents or to gain or maintain approval to conduct Clinical Studies or to otherwise Develop, Manufacture or Commercialize the Product in accordance with this Agreement; provided, that such disclosure shall be subject to the prior written consent of the Party whose Confidential Information is intended to be disclosed (which consent shall not be unreasonably withheld or delayed), and such Confidential Information shall be disclosed only to the extent reasonably necessary to obtain patents or authorizations in a manner consistent with the rights and obligations hereunder, (ii) the extent required by applicable law, including without limitation by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity, (iii) any bona fide actual or prospective underwriters, investors, lenders or other financing sources or bona fide actual or prospective collaborators, strategic partners or acquirers who are obligated to keep such information confidential, to the extent reasonably necessary to enable such actual or prospective underwriters, investors, lenders or other financing sources, collaborators, strategic partners or acquirers to determine their interest in underwriting or making an investment in, or otherwise providing financing to, collaborating or partnering with, or acquiring, the receiving Party. In addition, if either Party is required to disclose Confidential Information of the other Party by regulation, law or legal process, including without

limitation by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity, such Party shall provide prior notice of such intended disclosure to such other Party if practicable under the circumstances and shall disclose only such Confidential Information of such other Party as is required to be disclosed. Dyax and Rentschler shall each cause all their respective employees, consultants, contractors and persons for whom it is responsible having access to Rentschler Confidential Information or Dyax Confidential Information to be subject to the same obligations of confidence as Dyax and Rentschler pursuant to this Section 10.1 and shall be bound by confidentiality agreements in support of such obligations.

10.4 Remedies. Without prejudice to any other rights and remedies that the Parties may have, the Parties agree that the confidential information is valuable and that damages may not be an adequate remedy for any breach of the provisions of Sections 10.1, 10.2, or 10.3. The Parties agree that the relevant Party will be entitled without proof of special damage to seek the remedies of an injunction and other equitable relief for any actual or threatened breach by the other Party.

10.7 Survival. The obligations of Rentschler and Dyax under this Section 10 shall survive the termination or expiration of this Agreement.

11. Term and Termination

11.1 Term. This Agreement will expire on the later of (a) five (5) years from the Effective Date or (b) the completion of all Services under the last Work Order executed by the Parties prior to the fifth anniversary of the Effective Date. This Agreement may be extended by mutual agreement of the Parties or earlier terminated in accordance with Section 11.2. or 11.3. Upon request of extension of this Agreement by Dyax, Rentschler shall notify Dyax of its acceptance or rejection of such request for extension in writing no later than [*****] calendar days from the date of such request by Dyax.

11.2 Termination without Cause.

11.2.1 Dyax may, in its sole discretion terminate this Agreement or any Work Orders at any time for any reason or no reason by giving not less than [*****] calendar days notice in writing to Rentschler. In the event of termination pursuant to this Section 11.2.1, Dyax shall pay Rentschler for Services performed up to the date of termination and Rentschler shall provide to Dyax all completed deliverable for such Services. In addition, Dyax shall pay Rentschler the Exit Fee according to Section 3.4 as applicable, reimburse Rentschler for expenses incurred or irrevocably committed to Third Parties in accordance with this Agreement and the Price for any Batches that are in-progress.

11.2.2 Rentschler may in its sole discretion terminate this Agreement or any Work Order at any time for any reason or no reason by giving not less than [*****] months notice in writing to Dyax. During such notice period, Rentschler shall continue all work in progress and Rentschler shall provide to Dyax all completed and in progress deliverable for such Services and both Parties shall remain liable to each other for their respective obligations under this Agreement. In the event of termination pursuant to this Section 11.2.2 Dyax shall pay Rentschler for Services performed.

11.3 Termination for Cause. Rentschler and Dyax may each terminate this Agreement forthwith by notice in writing to the other upon the occurrence of any of the following events:

11.3.1 If the other commits a material breach of this Agreement which in the case of a breach capable of remedy is not remedied to the reasonable satisfaction of the non-breaching Party within [*****] calendar days of the receipt by the other of written notice identifying the breach and requiring its remedy; or

11.3.2 Any Party may terminate this Agreement at any time by giving notice in writing to the other Party, if the other Party files a petition of any type as to its bankruptcy, is declared bankrupt, becomes insolvent, makes an assignment for the benefit of creditors, goes into liquidation or receivership, otherwise loses legal control of its business or ceases to carry on its business.

11.4 Rights and Obligations upon Termination. Upon the termination of this Agreement for whatever reason:

11.4.1 Rentschler shall continue to operate as normal during the period following notice of termination and shall provide to Dyax all completed deliverables for such Services, and forecasting, ordering, manufacture and Delivery shall continue until the date of actual termination. Rentschler shall promptly return to Dyax all Dyax Confidential Information, and shall dispose of or provide to Dyax the Dyax Materials (and where supplied by Dyax), the WCB and any materials therefrom, as directed by Dyax upon termination;

11.4.2 Dyax shall promptly return to Rentschler or destroy all Rentschler Know-How and Rentschler Confidential Information it has received from Rentschler;

11.4.3 At Dyax's request on termination, Rentschler shall provide reasonable cooperation to assist Dyax with technical transfer of the Process to an alternative manufacturer, subject to payment of a reasonable fee to Rentschler in respect of such transfer activity; and

11.4.4 Rentschler and Dyax shall do all such acts and things and shall sign and execute all such deeds and documents as the other may reasonably require to evidence compliance with this Section 11.4.

11.5 Survival. The following provisions shall survive termination: Sections 5.3 and 5.4, and Articles 6, 10, 11 and 13.

12. Force Majeure. If either Party is prevented or delayed in the performance of any of its obligations under this Agreement by Force Majeure such Party shall give written notice thereof to the other Party specifying the matters constituting Force Majeure together with such evidence as reasonably can give and specifying the period for which it is estimated that such prevention or delay will continue, the Party claiming Force Majeure shall be excused from the performance or the punctual performance of such obligations as the case may be from the date of such notice for so long as such cause of prevention or delay shall continue. However, the affected Party shall promptly undertake commercially reasonable efforts necessary to cure such force majeure circumstances. Notwithstanding the foregoing, if the Party claiming Force Majeure estimates that the delay will exceed [*****] calendar days, or if the delay has, in fact, exceeded [*****] calendar days, the other Party may terminate this Agreement for cause as set forth in Section 9.3, including an additional [*****] calendar days notice to remedy the breach.

13. Mediation, Arbitration, Governing Law, Jurisdiction, and Enforceability

13.1 Mediation. In the event of any dispute, controversy or claim arising out of or relating to this Agreement that the Steering Committee is unable to resolve, or the breach, termination or invalidity thereof, each Party shall by written notice to the other have the right to have such dispute referred to the executive management of Rentschler and Dyax for attempted resolution by good faith negotiations within [*****] calendar days after such notice is received. If resolved, the resolution shall be binding and final. If such executive management is unable to resolve such dispute within the [*****] calendar day period, and before arbitration is initiated, then the following shall apply:

13.1.1 If the dispute is predominantly concerned with a scientific or technical issue then the entire dispute shall be referred to an independent expert, appointed jointly by the Parties. If the Parties cannot agree on an independent expert, Section 13.2 shall apply. The decision of the independent expert shall be given in writing and in English and considered final and binding on the Parties except if there has been a manifest error on the face of the decision whereupon the Parties may revert to their respective remedies under Section 13.2.

13.1.2 If the dispute is predominantly concerned with an issue other than scientific or technical then the Parties shall participate in a mediation that will last no less than [*****] hours unless the dispute is resolved before such time. Notwithstanding the requirement for the Parties to submit to mediation for a minimum of [*****] hours, neither Party will be required to participate in mediation for longer than [*****] hours. Any mediation will take place a mutually agreeable venue, and will be officiated by a mutually agreeable mediator identified and engaged by the Parties, the cost and fees for whom shall be borne equally by the Parties. In the event the Parties' efforts to reach an amicable resolution through mediation or other informal means are unsuccessful, either Party may invoke the provisions of Section 13.2. Any settlement reached by the Parties under this Section shall not be binding until reduced to writing and signed by the above-specified management of Rentschler and Dyax. When reduced to writing, such agreement shall supersede all other agreements, written or oral, to the extent such agreements specifically pertain to the matters so settled.

13.2 Arbitration. In the event of the failure to reach a resolution pursuant to Section 13.1, any dispute, controversy or claim arising out of or relating to this Agreement, including without limitation its formation, validity, binding effect, amendment, construction, interpretation, breach, termination, enforcement or rescission,, shall be submitted to and resolved exclusively by binding arbitration, in accordance with the provisions of this section, provided however that any party may also seek preliminary or temporary injunctive relief or provisional remedies in any court of competent jurisdiction. Binding arbitration shall be conducted in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce in force on the date when the Notice of Arbitration is submitted in accordance with these Rules. Arbitration shall be held in the city of Zurich, Switzerland, before one (1) arbitrators selected pursuant to such arbitration rules who will have no personal or pecuniary interest, either directly or indirectly, from any business or family relationship with either of the parties. The arbitration proceedings shall be conducted in English. All decisions of the arbitrator will be final, binding, and conclusive on the parties. The parties will equally share the costs of the arbitrator and the arbitration fee (if any). Either party may seek confirmation of the arbitration award in any competent

court. The prevailing Party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award.

13.3 Governing Law and Jurisdiction. This Agreement shall in be exclusively made under, governed by, and construed, performed and enforced in accordance with, the laws of Switzerland, without giving effect to the Switzerland’s conflicts of laws provisions that may direct the application of the laws of another jurisdiction.

13.4 Waiver. No failure or delay on the part of either Rentschler or Dyax to exercise or enforce any rights conferred on it by this Agreement shall be construed or operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege or further exercise thereof operate so as to bar the exercise or enforcement thereof at any time or times thereafter.

13.5 Severability. The illegality or invalidity of any provision (or any part thereof) of this Agreement shall not affect the legality, validity or enforceability of the remainder of its provisions or the other parts of such provision as the case may be. The Parties shall replace the illegal or invalid provision with a legal and valid provision that as closely as possible reflects the intent and economic effect of the illegal or invalid provision.

14. Miscellaneous

14.1 Assignment. Neither Party shall be entitled to assign, transfer, charge or in any way make over the benefit and/or the burden of this Agreement without the prior written consent of the other which consent shall not be unreasonably withheld or delayed, save that either Party shall be entitled without the prior written consent of the other Party to assign, transfer, charge, sub-contract, deal with or in any other manner make over the benefit and/or burden of this Agreement to an Affiliate or to any company with which such assigning Party may merge or to any company to which such assigning Party may transfer its assets and undertakings to which the Agreement relates. In this case the assigning Party remains jointly and severally liable for claims arising out of this Agreement.

14.2 Notices. All notices to be given as required in the Agreement shall be in writing and may be delivered personally, or mailed either by a reputable overnight carrier with required receipt signature or certified mail, postage prepaid to the Parties at the addresses set forth above or at such other address as either Party may provide by written notice to the other Party in accordance with the provisions of this Section 14.2. Such notice shall be effective: (i) on the date sent, if delivered personally or by facsimile (receipt of which is confirmed); (ii) the date after delivery if sent by overnight carrier; or (iii) on the date received if sent by certified mail.

(i)If to Dyax:

Dyax Corp

55 Network Drive

Burlington, MA 01803

Attn: General Counsel

(i)If to Rentschler:

Rentschler Biotechnologie GmbH

Erwin-Rentschler-Str. 21

D-88471 Laupheim

Attn: Rechtsabteilung

14.3 Press Releases. The text of any press release or other communication to be published by or in the media concerning the subject matter of this Agreement shall require the prior written approval of Rentschler and Dyax.

14.4 Entire Agreement. This Agreement, together with the Appendices and Work Orders attached hereto, embody the entire understanding of Rentschler and Dyax and there are no promises, terms, conditions or obligations, oral or written, expressed or implied, other than those contained in this Agreement. The terms of this Agreement shall supersede all previous agreements (if any) which may exist or have existed between Rentschler and Dyax relating to the Services.

14.5 No Third Party Beneficiaries. The Parties to this Agreement do not intend that any terms hereof should be enforceable by any person who is not a Party to this Agreement.

14.6 Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed an original thereof.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by its duly authorized representatives as of the Effective Date.

Rentschler Biotechnologie GmbH Dyax Corp.

By: /s/Klaus B. Schoeppe_______________ By: /s/Christopher Perley____________

Name : Klaus B. Schoeppe ___________ Name: Christopher Perley___________

Title: VP Project Management____________ Title: SVP Technical Operations______

Date: 6/12/2014 ______________________ Date: 6/12/2014 __________________

Rentschler Biotechnologie GmbH

By: /s/Christoph Winterhalter____________

Name : Christoph Winterhalter _________

Title: VP Business Development__________

Date: 6/12/2014 _____________________

Appendix A - Services

[Omitted]

[Appendix A to the Agreement was superceded in its entirety by Appendix A to the Second Amendment]

Appendix B - Schedule

[Omitted]

[Appendix B to the Agreement was superceded in its entirety by Appendix A to the Second Amendment]

Appendix C - Drug Substance and Drug Product Specifications

[*****]

AMENDMENT 1 TO THE

Master Development & Manufacturing Services Agreement

The Parties conclude this Amendment (this “Amendment”) to amend the Master Development and Manufacturing Services Agreement (the “Agreement”) made and entered into as of June, 11th, 2014 (the "Effective Date") with the contract number CCF7BA98-A366. This Amendment is entered into by and between Rentschler Biotechnologie GmbH, a company organized under the laws of Germany, having a principle place of business at Erwin-Rentschler-Str. 21, 88471 Laupheim, Germany ("Rentschler") and Dyax Corp., a company organized under the laws of the State of Delaware, USA, having a principle place of business at 55 Network Drive, Burlington, Massachusetts, USA ("Dyax"). Rentschler and Dyax are referred to herein individually as a "Party" and collectively as the "Parties".

NOW, the Parties hereto amend the Agreement as follows:

1. Section 9.3 (Payment) of the Agreement shall, henceforth, have the wording:

"Payment will be made in accordance with relevant mutually agreed upon Work Orders. All payments shall be made free and clear of and without deduction or deferment in respect of any disputes or claims whatsoever and/or as far as is legally possible in respect of any taxes imposed by or under the authority of any government or public authority. Payment must be made within [*****] calendar days of receipt by Dyax of a correct invoice. Payment shall be made without deduction, deferment, set-off, lien or counterclaim of any nature. Payment shall be made in euros by wire transfer to the bank account designated by Rentschler.”

2. No change or modification of this Amendment shall be valid or binding upon the Parties unless such change or modification is in writing and duly executed by the Parties.

3. Except as specifically set forth herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect.

4. This Amendment comes into force with the Effective Date of the Agreement.

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Signed on behalf of Rentschler Biotechnologie GmbH Date: 7/29/2014 Signature: /s/Hans Eisenbrand Printed Name: Hans Eisenbrand Position: Corporate Counsel		Date: 7/29/2014 Signature: /s/Thomas Lottner Printed Name: Thomas Lottner Position: VP Commercial Manager
Signed on behalf of Dyax Corp. Date: 7/22/2014 Signature: /s/Christopher Perley Printed Name: Christopher Perley Position: SVP Technical Operations		If second signature is required: Date: ______________________________ Signature: __________________________ Printed Name: _______________________ Position: ____________________________

AMENDMENT 2 TO THE

Master Development & Manufacturing Services Agreement

NOW, the Parties hereto amend the Agreement as follows:

1. Appendix A of the Agreement is hereby deleted in its entirety and replaced with the Appendix A in Attachment 1.

2. The Parties have agreed that the reservation time for 1,000L production facilities (work packages 6 and 7a) is April 24^th - June 21^st 2015. The reservation time for the 2,000L production facility (work package 8) is July 26^th - August 24^th 2015.

3. No change or modification of this Amendment shall be valid or binding upon the Parties unless such change or modification is in writing and duly executed by the Parties.

4. Except as specifically set forth herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect.

5. This Amendment comes into force with the Effective Date of the Agreement.

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Signed on behalf of Rentschler Biotechnologie GmbH Date: 1/15/2015 Signature: /s/Dr. Klaus Schoepe Printed Name: Dr. Klaus Schoepe Position: VP Project Management		Date: 1/15/2015 Signature: /s/Thomas Lottner Printed Name: Thomas Lottner Position: VP Commercial Manager
Signed on behalf of Dyax Corp. Date: 2/3/2015 Signature: /s/Christopher Perley Printed Name: Christopher Perley Position: SVP Technical Operations		If second signature is required: Date: ______________________________ Signature: __________________________ Printed Name: _______________________ Position: ____________________________

Appendix A - Services and Schedule

[*****]

AMENDMENT 3 TO THE

Master Development & Manufacturing Services Agreement

NOW, the Parties hereto amend the Agreement as follows:

1. Subsequent work packages under Appendix A of Amendment 2 will be replaced by the work packages described in this amendment under Appendix A:

WP 9: Optional: Scale-down and Virus Validation (Part 1)

WP 16 Mock Fermentation and Development of a Specific HCP-ELISA

WP 17: Filing Documents for Phase III

WP 19: Validation of a Specific HCP-ELISA

WP 32: Filing Documents for Market Authorization (MAA and BLA)

2. Subsequent work packages under Appendix A of Amendment 2 will be taken out completely:

WP18: Optional: Genotypic Characterization of Master Cell Bank and Working Cell Bank

3. Assignment of Work package 4, Scope Change 05 V2 is cancelled.

4. No change or modification of this Amendment shall be valid or binding upon the Parties unless such change or modification is in writing and duly executed by the Parties.

5. Except as specifically set forth herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect.

6. This Amendment comes into force with the Effective Date of the Agreement.

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Signed on behalf of Rentschler Biotechnologie GmbH Date: 4/23/2015 Signature: /s/Dr. Klaus Schoepe Printed Name: Dr. Klaus Schoepe Position: VP Project Management		Date: 4/23/2015 Signature: /s/Thomas Lottner Printed Name: Thomas Lottner Position: VP Commercial Manager
Signed on behalf of Dyax Corp. Date: 5/11/2015 Signature: /s/Christopher Perley Printed Name: Christopher Perley Position: SVP Technical Operations		If second signature is required: Date: ______________________________ Signature: __________________________ Printed Name: _______________________ Position: ____________________________

Appendix A - Services and Schedule

[*****]

AMENDMENT 4 TO THE

MASTER DEVELOPMENT & MANUFACTURING SERVICES AGREEMENT

The Parties conclude this Amendment (this “Amendment”) to amend the Master Development and Manufacturing Services Agreement (the “Agreement”) made and entered into as of June, 11th, 2014 (the “Effective Date”) with the contract number CCF7BA98-A366. This Amendment is entered into by and between Rentschler Biotechnologie GmbH, a company organized under the laws of Germany, having a principle place of business at Erwin-Rentschler-Str. 21, 88471 Laupheim, Germany (“Rentschler”) and Dyax Corp., a company organized under the laws of the State of Delaware, USA, having a principle place of business at 55 Network Drive, Burlington, Massachusetts, USA (“Dyax”). Rentschler and Dyax are referred to herein individually as a “Party” and collectively as the “Parties”.

Now, the Parties wish to perform another project which is more fully described in the corresponding Work Orders. In consideration of the foregoing, the Parties agree to amend the Agreement as follows:


1.	The Agreement shall apply to all products related to which Rentschler performs development and/or manufacturing services for Dyax as described in a Work Order in accordance with the Agreement.


2.	Section 1. of the Agreement is hereby amended and reads as follows:

1.20 “Drug Product” or “DP” means the final finished dosage form of DX-2930 or any other product as defined in a Work Order produced by the filling process from Drug Substance.

1.22 “Drug Substance” or “DS” means the bulk purified recombinant protein DX-2930 or any other product as defined in a Work Order that is produced by cell culture and purification process from a MCB or WCB.

1.35 “Product” means all or any part of a product as defined in a Work Order (whether Drug Substance or Drug Product) manufactured (including any sample thereof), and includes all derivatives thereof.

1.49 “Working Cell Bank” or “WCB” and “Master Cell Bank” or “MCB” means the clonal cell line that has been designed and engineered to produce a recombinant protein which is further defined in a Work Order. A WCB or MCB can either be supplied to Rentschler by Dyax or be prepared by Rentschler as further defined in a Work Order.


3.	No change or modification of this Amendment shall be valid or binding upon the Parties unless such change or modification is in writing and duly executed by the Parties.


4.	Except as specifically set forth herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect.


5.	This Amendment comes into force with the date of the first Work Order for a project other than DX-2930.

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Signed on behalf of Rentschler Biotechnologie GmbH Date: Signature: /s/Dr. Klaus Schoepe Printed Name: Dr. Klaus Schoepe Position: VP Project Management	Date: Signature: /s/Thomas Lottner Printed Name: Thomas Lottner Position: VP Commercial Manager
Signed on behalf of Dyax Corp. Date: Signature: /s/Burt Adelman Printed Name: Burt Adelman Position:

AMENDMENT 5 TO THE

Master Development & Manufacturing Services Agreement

NOW, the Parties hereto amend the Agreement as follows:

1. Subsequent work packages under Appendix A of Amendment 2 will be replaced by the work packages described in this amendment under Appendix A:

WP 6: Scale-up and GMP-At-Risk run at 1,000 L Scale (1 Batch)

WP 12: Stability Study of Drug Substance (3 Batches) including Freeze/Thaw (1 Batch)

WP 14: Comparability Study (Drug Substance)

WP 28: Forced Degradation Study

2. Section 3.3 and 3.4.2 of the Agreement are deleted.

3. Section 4.4 is replaced by the following:

Disposition and Batch Record Review. Rentschler shall carry out Release or reject of each Batch of Drug Substance. On completion of Release of each Batch, and no later than [*****] Business Days following the performance of the final filtration and filling step of Drug Substance, Rentschler shall provide the Batch Record for such Batch to Dyax for review. Within [*****] Business Days following delivery of the complete Batch Record to Dyax, Dyax shall confirm in writing Dyax accepts Rentschler's findings detailed in the Batch Record, or shall submit a complaint in accordance with the Quality Agreement in the form annexed thereto. Dyax shall be taken to have accepted such Batch on the earlier of actual notification by Dyax of its acceptance of Rentschler's findings in the Batch Record or in the absence of notice of rejection of such findings or the Batch within [*****] Business Days from such delivery of the Batch Record. Should an error or omission have occurred, Rentschler shall have [*****] Business Days to correct same, after which the [*****] Business Day period for Dyax to review shall restart. For Drug Product release testing, the CoA will be provided no later than [*****] Business Days following recipient of the Drug Product vials.

4. No change or modification of this Amendment shall be valid or binding upon the Parties unless such change or modification is in writing and duly executed by the Parties.

5. Except as specifically set forth herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect.

6. This Amendment comes into force with the Effective Date of the Agreement.

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Signed on behalf of Rentschler Biotechnologie GmbH Date: 8/27/2015 Signature: /s/Dr. Christoph Winterhalter Printed Name: Dr. Christoph Winterhalter Position: VP Business Development		Date: 8/27/2015 Signature: /s/Dr. Klaus Schoepe Printed Name: Dr. Klaus Schoepe Position: VP Project Management
Signed on behalf of Dyax Corp. Date: 9/3/2015 Signature: /s/Christopher Perley Printed Name: Christopher Perley Position: SVP Technical Operations		If second signature is required: Date: ______________________________ Signature: __________________________ Printed Name: _______________________ Position: ____________________________

CONFIDENTIAL DOCUMENT

Exhibit 10.5

Manufacturing Services Agreement

This Manufacturing Services Agreement, together with any Work Orders attached hereto (collectively, this "Agreement"), is made and entered into as of February 20, 2015 (the "Effective Date") by and between Cook Pharmica LLC, an Indiana limited liability company having its principle place of business at 1300 South Patterson Drive, Bloomington, Indiana 47403 (“Cook”) and Dyax Corp., a company organized under the laws of the State of Delaware, USA, having a principle place of business at 55 Network Drive, Burlington, Massachusetts, USA ("Dyax"). Cook and Dyax are referred to herein individually as a "Party" and collectively as the "Parties.”

WHEREAS, Cook provides a full range of bioprocessing services to the biopharmaceutical industry, including validation and commercial drug product manufacturing services.

WHEREAS, Dyax desires Cook to perform Services (as hereinafter defined) in accordance with the terms of this Agreement related to validation and the production of CGMP material suitable to supply clinical trials and commercial markets that meets FDA and EMA acceptance criteria, and Cook desires to perform such services.

NOW, THEREFORE, in consideration of the above statements and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties hereto agree as follows:

1. Definitions. Unless the context requires otherwise, words and phrases defined in any other part of this Agreement shall bear the same meanings in this Article 1, references to Work Orders are references to work orders to this Agreement, and references to Sections are references to sections of this Agreement. In the event of a conflict between a term in any executed Work Order or any supplemental or additional term agreed to in writing from time to time between the Parties and this Agreement, this Agreement will prevail, unless expressly stated otherwise. As such, the following terms when used in this Agreement, shall, except where the context otherwise requires, have the following meanings.

1.2 "Agreement" means this Agreement, together with any fully executed Work Orders.

1.3 "Background Intellectual Property" means any Intellectual Property owned by or in the possession of a Party (and to which that Party has the rights): (i) as of the date of this Agreement; or (ii) thereafter either (a) acquired independently of this Agreement, or (b) developed independently of this Agreement by any employee of that Party without reference or reliance upon any of the Confidential Information disclosed by the other Party.

1.4 "Batch" means a specific quantity of Drug Product comprising a number of Units mutually agreed upon by the Parties that is: (a) is expected to have uniform character and quality within specified limits, and (b) is produced according to a single manufacturing order during the same cycle of Production.

1.5 "Batch Record Package" is a compilation of records containing the Production history and control of a Product. These records are generated by Cook manufacturing and Cook quality control and reviewed and approved by Cook quality assurance. Batch Record Package includes executed Batch Production Records that contain bill of materials, manufacturing instructions, formulas, appropriate packaging instructions, deviation documentation including out of specification investigations, environmental monitoring records, laboratory test records, COA, and additional documentation as required by the Work Order.

1.6 "Batch Production Record" or "BPR" means a record of one or more manufacturing steps of a Batch (e.g. thawing, aseptic filling, inspection, and packaging) and made concurrently with the Manufacture.

1.7 “BLA” means Biologic Licensing Application.

1.8 "Business Day" means a day that is not a Saturday, Sunday or a day on which banking institutions in Boston, Massachusetts, USA are authorized by law to remain closed.

1.9 "Certificate of Analysis" or "COA" means a document listing the test results, certifying that the Product has met Product Specifications.

1.10 “Certificate of Compliance” or “COC” means the certificate to be issued by Cook stating that the Drug Product was Produced and tested in compliance with: (i) applicable cGMP guidelines, (ii) terms of this Quality Agreement, and (iii) internal policies and procedures.

1.11 "CGMP" or "Good Manufacturing Practices" means those current practices, as amended from time to time, related to the manufacture of biologics as set forth in the FDCA and such standards of good manufacturing practice as are required by the FDA or other Regulatory Authorities (as defined herein), and as promulgated under the US Federal Food Drug and Cosmetic Act at 21 CFR Chapters 210, 211, 600 and 610, the Guide to Good Manufacturing Practices for Medicinal Products as promulgated under European Directive 2003/94//EC and ICH Guidance Q7A (Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients).

1.12 "CGMP Product" means Product which is required under Work Orders to be manufactured in accordance with CGMP.

1.13 “Commercially Reasonable Efforts” means, with respect to the activities under this Agreement, the efforts and resources used by a reputable biopharmaceutical contract development and manufacturing organization for drug products of similar nature, complexity and developmental stage.

1.14 “Component Specifications” means the Specifications and testing to be performed for the Components, as set forth in the relevant Work Order.

1.15 “Components” means all components (such as vials, plungers, stoppers and syringes) used by Cook in the Production of Drug Product under this Agreement. Components are listed in the relevant Work Order, and are identified as either Components supplied by Dyax (“Dyax-Supplied Components”) and/or Components supplied by Cook (“Cook-Supplied Components”).

1.16 "Confidential Information" means all information concerning the know-how, ideas, concepts, inventions, pricing, Third Party information, business, technical or financial data concerning the Specifications, Master Batch Records, the Drug Substance or the Drug Product, whether disclosed directly or indirectly in writing, orally, electronically or by drawings or observation. Confidential Information does not include information that is: (i) already known by receiving Party; (ii) obtained by receiving Party from a Third Party that is not under a duty of confidentiality to the disclosing Party; (iii) in the public domain; or (iv) independently developed by the receiving Party; in each case as evidenced by contemporaneous written record.

1.17 "Conforming Batch" means a Batch which meets the following requirements: (i) has been produced in accordance with CGMP; (ii) meets the Drug Product Specification; (iii) adheres to all applicable laws; and (iv) has been produced in accordance with the Master Batch Record.

1.18 “Cook Disposition” means Cook disposition of Drug Product following Cook Quality review of executed Batch documentation resulting in a Batch Record and generation of a Certificate of Analysis for those assays performed by Cook and Certificate of Compliance stating that the Drug Product was Produced in accordance with Specifications and CGMPs (if applicable) and deemed a Conforming Batch, or resulting in a Batch Record and a document stating the Batch was rejected and deemed a Non-Conforming Batch.

1.19 "Cook Factor" means a situation in which Cook did not carry out (or has not yet carried out) the Services as set forth in a fully executed Work Order, including but not limited to process validation and manufacturing Drug Product in accordance with Section 1.11, CGMP, Master Batch Record, Specification and/or supporting standard operating procedures.

1.20 "Cook Know-How" means all technical and other information and materials, ideas, concepts, methods, procedures, designs, documents, data, inventions, discoveries and works of authorship (in each case, whether or not patentable) known to Cook from time to time other than Dyax Confidential Information and information in the public domain.

1.21 “Cook Project Product Code” means the identifying alphanumeric code established by Cook to identify the final packaged Product as set forth in the relevant Work Order.

1.22 “Dedicated Equipment” means the capital equipment identified on a relevant Work Order that is dedicated for use in the provision of the Services.

1.23 "Deliver," "Delivered" or "Delivery" has the meaning ascribed to it by Section 7.2.

1.24 "Delivery Date" means the date a Batch of Product is Delivered to Dyax.

1.25 "Drug Master File" or “DMF” is a submission to the FDA or other Regulatory Authority that may be used to provide Confidential Information on Products Produced the Facility.

1.26 "Drug Product" or "DP" means the final finished dosage form of DX-2930 produced by the filling process from Drug Substance.

1.27 "Drug Product Specification" means the specification for Drug Product as defined in this Agreement.

1.28 "Drug Substance" or "DS" means the bulk purified recombinant protein DX-2930 that is produced by the cell culture and purification process from the Working Cell Bank “WCB”.

1.29 "Drug Substance Specification" means the Specification for Drug Substance as defined in this Agreement.

1.30 "Dyax Disposition" means Dyax disposition of Drug Product following Dyax Quality review of executed Batch documentation and generation of a Certificate of Analysis and a Certificate of Conformance for those assays performed by Dyax or on Dyax’s behalf by Third Parties stating that the Drug Product was Produced in accordance with Specifications and CGMPs (if applicable) and deemed a Conforming Batch, or a document stating the Batch was rejected and deemed a Non-Conforming Batch.

1.31 "Dyax Materials" means the materials supplied by Dyax to Cook and identified as such in Work Orders hereto, including without limitation, Drug Substance and Dyax-Supplied Components.

1.32 “EMA” means the European Medicines Agency and any successor agency or entity that may be established hereafter.

1.33 "Facility" means Cook’s manufacturing, laboratory and warehouse facilities located at 1300 South Patterson Drive, Bloomington, IN 47403, agreed to in writing by the Parties.

1.34 “FDA” means the United States Food and Drug Administration and any successor agency or entity that may be established hereafter.

1.35 "Force Majeure" means any cause beyond the reasonable control of the Party (or its Affiliates, suppliers, public utilities, or common carriers) in question which for the avoidance of doubt and without prejudice to the generality of the foregoing, including, without limitation, acts of God (including but not limited to earthquake, tornado or hurricane), governmental actions, laws or regulations of any government or agency thereof (that could not reasonably have been expected or anticipated on the Effective Date following diligent inquiry into current and proposed federal, state, local and other regulatory requirements), war, terrorism, civil commotion, damage to or destruction of production facilities or materials, scientific or technical events, labor disturbances (whether or not any such labor disturbance is within the power of the affected Party to settle), and epidemic.

1.36 "Intellectual Property" means all know-how, inventions, discoveries, devices, data, patents, designs, copyrights, or other industrial or intellectual property and all applications therefore.

1.37 “MAA” means Marketing Authorization Application.

1.38 "Master Batch Record" or "MBR" means a master production instruction of the manufacturing steps (e.g. thawing, aseptic filling, inspection, packaging). An MBR is based on the technology transfer documents from Dyax transcribed into a format consistent with Cook’s standard documentation.

1.39 "Non-Conforming Batch" means a Batch which, after review of the Batch Record Package, does not meet the requirements of a Conforming Batch.

1.40 “Person” means an individual or legal entity.

1.41 "Price" means the price specified in Work Orders for the Services.

1.42 “Process Consumables” shall mean materials used as an aid in the Production of Product that do not become part of the finished Product, including but not limited to: filters, tubing, and bags.

1.43 "Produce” or “Production" means the process for the production of Drug Product, including any improvements or modifications thereto from time to time.

1.44 "Product" means all or any part of the DX-2930 Batch manufactured (including any sample thereof), particulars of which are set out in Work Orders and includes all derivatives of DX-2930.

1.45 “Product Availability Date” means the date that Product is made available to Client or its designated carrier in accordance with the Delivery Terms.

1.46 “Product Invention” means any Invention that relates directly to the Product and that is: (a) first conceived and reduced to practice during the Term in the course of, and as a direct result of, performing the Production; and (b) uses Dyax Materials. For the avoidance of doubt, a Product Invention shall include Inventions made solely by employees of Cook, employees of Dyax or jointly by employees of Cook and employees of Dyax.

1.47 “Project Invention” means any Invention first conceived and reduced to practice during the Term in the course of, and as a direct result of performing the Production, excluding Product Inventions. For the avoidance of doubt, a Project Invention shall include Inventions made solely by employees of Cook, employees of Dyax or jointly by employees of Cook and employees of Dyax.

1.48 "QA Management" means the organizational unit responsible for CGMP Product disposition.

1.49 "Quality Agreement" shall mean an agreement setting out: (i) the mutually agreed quality standards applicable for the manufacture of the Drug Product in accordance with CGMP; and (ii) the roles and responsibilities of each Party's personnel in relation to quality assurance matters, in the form to be attached as Appendix C, and which will be executed by the Parties in connection with the execution of this Agreement.

1.50 “Regulatory Approval” means all authorizations by the appropriate Regulatory Authority necessary for commercial sale in a jurisdiction, including without limitation, approval of labeling, price, reimbursement and Production.

1.51 “Regulatory Authority” means any national, state, provincial, or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission of any court, tribunal or judicial or arbitral body.

1.52 “Release” means either a Cook or Dyax Disposition of a Batch as a Conforming Batch.

1.53 "Services" means all or any part of the services that are the subject of this Agreement as described in Appendix A, the particulars of which will be set out in fully executed Work Orders.

1.54 "Specification(s)" means a document containing a list of tests, references to analytical procedures, and appropriate acceptance criteria which are numerical limits, ranges, or other criteria for the tests described, establishing the set of criteria to which the Drug Product should conform, as agreed upon between the Parties, and includes without limitation, Drug Substance Specifications and/or Drug Product Specifications. The Specification(s) may be modified from time to time as mutually agreed to by the Parties in writing.

1.55 “Supply Deficiency” means, in the case of the failure by Cook, to produce the amount of Drug Product at least equal to the amount specified in the relevant Work Order.

1.56 "Terms of Payment" means the terms of payment specified in 9.3.

1.57 “Testing Standards and Procedures” means, with respect to each Product Produced hereunder, the written standards and procedures for evaluating compliance with the applicable Product Specifications, as mutually agreed upon in writing by Dyax and Cook, and incorporated in the applicable relevant Work Order.

1.58 "Third Party Laboratories" means any Third Party utilized by Cook, with Dyax' prior written approval, subcontracted to perform Services.

1.59 "Third Party" means any Party other than Dyax, Cook and their respective Affiliates.

1.60 “Unit” means an individually packaged dose of a Drug Product, including by way of example, a vial, cartridge, or prefilled syringe, as specified in the applicable Work Order.

1.61 "Work Order" means a project plan or similar document that specifies Services to be performed by Cook under this Agreement and that is approved in writing and signed by both Parties. Work Orders shall be attached to, and/or specifically reference, this Agreement. Work orders shall be deemed an integral part hereof, provided, however, that the terms and conditions of this Agreement shall be controlling over any terms and conditions included in any Work Order and any term or condition of such Work Order that is different from or contrary to the terms and conditions of this Agreement shall be void.

2. Scope of Services; Management; Work Orders; Performance

2.1 Services.

2.1.1 A description of the overall scope of the Services which specifies the design, information desired, outcomes desired, estimated duration of the Services and other matters pertinent to completion of the Services is attached to this Agreement as Appendix A. Cook shall complete its obligations to perform the Services (including providing the Facility, equipment, materials, and methods, and a sufficient number of suitably skilled staff necessary to successfully achieve the Services) as set forth in Appendix A and shall use Commercially Reasonable Efforts to successfully achieve the milestones as set forth in Appendix A (the "Milestones"), as they may be amended from time to time in Work Orders after the execution of this Agreement. Promptly following Agreement approval, the Parties will work in good faith to develop a project plan to meet the Milestones.

2.1.2 The core regulatory and/or technical support associated with maintaining the CGMP state of the facility, maintaining quality systems to ensure CGMP compliance, completing any investigations resulting from manufacturing and quality activities shall be at Cook’s cost. Work beyond the scope of Services can be provided by Cook to Dyax as required, and is subject to mutual written agreement of the Parties. Additionally, Cook shall respond in a timely manner to all Dyax inquiries regarding the status of validation and manufacturing activities under this Agreement, and shall use Commercially Reasonable Efforts to respond to most inquiries promptly.

2.1.3 When reasonably required by Cook, Dyax shall provide to Cook suitably skilled, educated and technical employees or representatives with knowledge of Dyax's materials and/or the Services for the purpose of facilitating and assisting the technology transfer to Cook to enable to perform the Services hereunder. Dyax shall ensure that such employees or representatives will be subject to enforceable obligations of confidentiality preventing them from using any information of a confidential nature which they acquire during such visit; and obey the rules at Cook’s facility with regard to health and safety, and CGMP. Additionally, Dyax has the right to have two (2) representatives on-site at the Facility during the performance of Services. Such representatives will have access to all areas where Services are being performed (provided that those representatives do not interfere with Cook’s work for Cook’s other clients and must be accompanied by a Cook representatives at all times). Dyax will coordinate with Cook in order to minimize the impact of their presence on Cook’s operations, and will comply with Cook’s policies and procedures. Cook shall provide suitable office space for such representatives with usual and customary support such as internet service.

2.1.4 All Services performed by Cook hereunder shall be completed in accordance with all applicable laws and regulations.

2.2 Management.

2.2.1 Cook and Dyax will appoint Project Leaders as their principal points of contact. The Parties shall form a Joint Project Team ("JPT") comprised of representatives from the development, manufacturing, quality, and regulatory functions and the Project Leaders from each of the Parties. The JPT shall determine the [*****] relating to the Product at the Facility. The JPT will meet regularly to review progress and [*****] the [*****] and [*****] to the [*****], and provide [*****] and [*****] as needed. In the event that the JPT is unable to reach a decision on any matter, the issue shall be referred to the Steering Committee as defined below in Section 2.2.2.

2.2.2 In addition to the JPT, the Parties shall also form a Steering Committee which shall comprise a minimum of two (2) and an equal number of representatives ("Representatives") from each of Cook and Dyax, and each Party shall notify the other of its selected Representatives. Each Representative shall carry an [*****] and proxy votes may be granted by Representatives

to their fellow Representative(s) if they are unable to attend meetings. The Steering Committee will take action by [*****] its Representatives. Each Party shall be entitled to change their respective nominated Representatives at any time and shall promptly give written notice of the change to the other Party. The quorum for the Steering Committee shall be a minimum of two (2) Representa-tives from each Party. The Steering Committee shall meet in person or by tele-phone. The Steering Committee shall meet at such times as the Steering Committee determines reasonably necessary to monitor the progress of the Services and to resolve issues arising therefrom. If the Steering Committee is unable to resolve the matter, it shall be referred to the President of Cook and the Chief Executive Officer of Dyax.

2.3 Work Orders.

2.3.1 Dyax and Cook shall complete and execute a Work Order before Services are provided. Each Work Order will include information relating to the specific Services and timelines agreed to by the Parties and the price for such Services. Such timelines and prices shall be consistent with this Agreement unless one Party provides a justification for a change and the other Party approves the change; such approval shall not be unreasonably withheld. Once signed by both Parties, a Work Order becomes a part of this Agreement, although the terms in a Work Order will govern only Services described in that Work Order. In the event that the terms of any Work Order are inconsistent with the terms of this Agreement, this Agreement shall control, unless otherwise explicitly agreed to in writing by the Parties. No Work Order shall be deemed to modify this Agreement. Upon execution of any Work Order, such plan shall be deemed to be incorporated herein.

2.3.2 Dyax considers performance of the Services in accordance with the Milestones in this Agreement and the Forecasting and Ordering Process defined in Article 3 to be important. If Cook reasonably believes that it will be unable to complete the Services in a Work Order in accordance with the scope, schedule and cost in the Work Order, then Cook shall promptly notify Dyax in writing, but in any case within [*****] Business Days. If Dyax reasonably believes that Cook will be unable to complete the Services in a Work order in accordance with the scope, schedule and cost, then Dyax shall promptly notify Cook in writing, but in any case within [*****] Business Days.

2.3.3 If it is reasonably possible (taking into account Cook’s obligations as a government contractor, to Dyax, and to its other clients) for Cook to address the issue by performing or re-performing, as applicable, the incomplete or non-conforming portions of the Services within [*****] calendar days of such written notice, then Cook shall perform or re-perform, as applicable, the incomplete or non-conforming portions of the Services as soon as reasonably possible within such [*****] calendar day period. This performance or re-performance shall be provided at Cook’s cost (including the cost of components and supplies if re-performance is required due to a Cook Factor) if the delay was caused by a Cook Factor, and at Dyax’s cost if not caused by a Cook Factor. Cook will use Commercially Reasonable Efforts to continue, initiate or re-initiate, as applicable, such incomplete or non-conforming portions in the next available space in its facilities. All Services requiring materials which are purchased by Cook are subject to correct and punctual supply of Cook’s suppliers, and Cook will use Commercially Reasonable efforts to promptly procure all materials, Components, and supplies required to initiate or re-initiate, as applicable, such incomplete or non-conforming portions.

2.3.4 If it is not reasonably possible for Cook to initiate or re-initiate, as applicable, such incomplete or non-conforming portions within [*****] calendar days of written notice, Cook shall reschedule the Services as soon as possible using Commercially Reasonable Efforts and taking into account Cook’s obligations as a government contractor, to Dyax and to its other clients. If initiation or re-initiation of the incomplete or non-conforming portions of the Services cannot be commenced within [*****] calendar days or if the Parties cannot agree on a schedule for initiation or re-initiation, as applicable, Dyax may, at its option, terminate this Agreement immediately upon written notice to Cook.

2.4 Materials.

2.4.1 Dyax, at Dyax’s sole expense, shall deliver or cause to be delivered: (i) a reasonably sufficient amount of Drug Substance and applicable Certificate of Analysis therefor and (ii) all other Dyax-Supplied Components, all to be delivered to Cook at least [*****] days in advance of the date set forth in the applicable Work Order for Production of such Drug Product. Except as may specifically be set forth in the Services and/or applicable Purchase Order or Work Order, on receipt of the Drug Substance and Dyax-Supplied Components as set forth above, Cook’s sole obligation with respect to evaluation of the Drug Substance and Dyax-Supplied Components shall be to perform an identification test on Drug Substance and review the accompanying Certificate of Analysis to confirm that the Drug Substance and Dyax-Supplied Components (if applicable) conform with the relevant Specifications.

2.4.2 Dyax shall provide Cook a Material Safety Data Sheet for Drug Substance and Drug Product. Cook shall notify Dyax of any unusual adverse health or environmental occurrence relating to the Drug Product, including, but not limited to any claim or complaint by any Cook employee or third party that the operations of Cook pursuant to this Agreement have resulted in

any adverse health or safety effect on an employee or third party. Cook and Dyax both agree to advise each other promptly of any safety or toxicity problems of which they become aware regarding the Product.

2.4.3 Cook shall at all times use reasonable efforts to keep the Dyax Materials secure and safe from loss or damage, but in no case shall Cook be obligated to use efforts greater than Cook uses to store its own material of similar nature; and will not transfer to any part of the Dyax Materials or the Drug Product, except to Third Party Laboratory as may be permitted in a relevant Work Order.

2.4.4 Cook shall audit and qualify all Product-related vendors and suppliers of Cook-Supplied Components, and all materials required to perform the Services unless the responsibility for those audits and qualifications is specifically assumed by Dyax under a relevant Work Order. Dyax shall certify and audit all vendors and suppliers of Dyax Materials unless the responsibility for such certification and audits is specifically assumed by Cook under the relevant Work Order.

2.4.5 Dyax shall supply to Cook, or cause to be shipped to Cook, all Dyax-Supplied Components at Dyax’s expense.

2.4.6 Cook will use Commercially Reasonable Efforts to purchase the Cook-Supplied Components in quantities sufficient to meet Dyax’s Work Orders. All Services requiring materials which are purchased by Cook are subject to correct and punctual supply of respective suppliers. Cook shall place orders for materials in accordance with the order lead times of the respective suppliers and Cook’s supply chain practices to allow sufficient time for sampling, testing, and Release by Cook of such materials to achieve on-time performance of the Services. Dyax shall reimburse Cook for the Cook-Supplied Components as set forth in the relevant Work Order. Generation of invoices and payment for Cook-Supplied Components shall be made in accordance with Article 9 of this Agreement. Materials purchased by Cook at the request of and paid for by Dyax which are not used in the performance of the Services will be the property of Dyax.

2.4.7 Cook and Dyax will develop a bill of materials and safety stock policies for the process validation and commercial Batches. The bill of materials and safety stock policies may be changed from time to time upon mutual agreement of the Parties.

2.4.8 Unless otherwise specifically agreed in a Work Order, Cook’s markup on Cook Supplied Materials, Cook-Supplied Components and Dedicated Equipment shall be [*****].

2.5 Specification. The Specification on-file with the FDA for Drug Product (included as Appendix B to this Agreement) will be transcribed into a Material Specification Sheet (“MSS”) in Cook’s standard form, and shall be approved by Cook and Dyax. Notwithstanding the above, the Parties hereby confirm that Specifications may change over time and shall be effective only if reduced to writing and signed by the quality and/or regulatory representative of both Parties, which quality and/or regulatory representative shall be nominated from time to time by each Party. Any such amendments to Specifications must also reflect, in writing, any corresponding changes to the timing of the Services and any changes to the Pricing detailed in the applicable Work Order.

2.6 Facility Visits and Audits. Dyax's representatives may visit the Facility to observe the progress of, or to audit the Services ("Routine Visits"). Dyax may also have the Facility audited and inspected by competent authorities as required by CGMP. Dyax shall request an appointment for such visits with Cook a minimum of [*****] calendar days before and the Parties will agree on the dates and the scope. Such audit, in excess of [*****] in duration by [*****] per year, [*****], unless agreed otherwise by the Parties in writing. The Parties agree that audits and inspections by Regulatory Authorities can be agreed upon by the Parties within a shorter timeframe. In addition to such Routine Visits, Dyax shall have the right to, and Cook will without undue delay allow for, audits caused by events which could put the quality of Dyax' Product at risk ("For-Cause Audits"). Cook will have the right to audit any sites or laboratories used by Dyax (except for Dyax's contract manufacturers) or any Third Party analytical subcontractor engaged by Dyax in connection with any materials provided by or on behalf of Dyax to Cook as part of the Services.

2.7 Dedicated Equipment.

2.7.1 Cook shall procure the Dedicated Equipment at Dyax’s sole cost, plus applicable Cook markup to cover handling costs, in accordance with the Product Specifications. Cook shall use commercially reasonable efforts to determine whether the Dedicated Equipment conforms to the applicable Product Specifications and will work in the Facility for purpose stated in the relevant Work Order.

2.7.2 Cook may use the Dedicated Equipment only for performing its obligations under this Agreement. Cook shall use the Dedicated Equipment only in accordance with any written instructions prescribed by Dyax or the manufacturer of the Dedicated Equipment, and shall perform such routine maintenance and calibration for the Dedicated Equipment as is reasonably required by such written instructions for an annual maintenance charge to Dyax. All costs for any extraordinary or non-routine

maintenance that may be required will be approved in advance by Dyax, and the appropriate relevant Work Order will be revised to reflect any additional maintenance costs that may be required during the Term. Except (i) in connection with such routine maintenance, (ii) as required by the Services, or (iii) as directed in writing by Dyax, Cook shall not make any alterations, additions or improvements to the Dedicated Equipment. All alterations, additions or improvements made to the Dedicated Equipment will be at Dyax’s sole cost and expense.

2.7.3 Dyax shall own and continue to own all right, title and interest in and to any Dedicated Equipment. Dyax assumes any risk of loss, damage, theft or destruction of the Dedicated Equipment while that Dedicated Equipment is in Cook’s possession or on Cook’s premises. Upon termination or expiration of this Agreement, Dyax shall have the right and obligation to, upon reasonable notice, reclaim possession of such Dedicated Equipment at its sole expense (including all costs of disconnection, removal, physical transfer and any subsequent reinstallation and requalification costs). Cook shall reasonably cooperate with Dyax to remove and return such Dedicated Equipment to Dyax in accordance with Dyax’s written instructions and shall invoice Dyax for (i) direct costs incurred and (ii) any damage other than reasonable wear and tear to the Facility incurred as a result of the use and removal of the Dedicated Equipment. Notwithstanding the above, upon termination or expiration of this Agreement, Dyax may offer to sell to Cook, or Cook may offer to purchase from Dyax, the Dedicated Equipment at its then depreciated cost or fair market value, whichever is less. Neither Cook nor Dyax shall be obligated to make or accept such offers. In the event that Dyax has not removed the Dedicated Equipment within [*****] after reasonable notice, the Dedicated Equipment shall be deemed to be abandoned and Cook may dispose of it or use it as it sees fit.

3. Manufacture and Supply; Forecasting and Ordering

3.1 Production of Drug Product. Dyax shall order and purchase from Cook and Cook shall use Commercially Reasonable Efforts to Produce and Deliver to Dyax quantities of CGMP Drug Product from time to time in accordance with the terms and conditions set out in this Agreement.

3.2 Forecasts, Orders and Capacity.

3.2.1 Forecasts. Commencing on the date of this Agreement and prior to the first day of each subsequent calendar quarter, Dyax will provide to Cook a written [*****]rolling forecast of Dyax’s estimated quantities for each Product (the “Rolling Forecast”). The first [*****] will specify the number of batches to be delivered each [*****] and the second [*****] will specify the number of batches to be delivered each [*****]. Within [*****] Business Days of receipt of the Rolling Forecast, Cook shall notify Dyax if the Rolling Forecast is accepted or rejected. If the Rolling Forecast is not accepted, the Parties shall negotiate in good faith to prepare a mutually acceptable Rolling Forecast that provides reasonable opportunity for Dyax to have reasonable quantities of cGMP Drug Product manufactured by Cook in accordance with this Agreement.

3.2.2 Purchase Orders. Dyax will order full Batches based on the expected yield per Batch. Each Purchase Order must include the requested quantity, Product Availability Date, the Cook Project or Product Code, Unit price, and Purchase Order total dollar amount. Dyax shall not, without the written consent of Cook, designate a Product Availability Date in a Purchase Order earlier than [*****] calendar days from the date Dyax submits the Purchase Order. Cook shall not, without the written consent of Dyax schedule a batch to be manufactured earlier than [*****] calendar days from the Product Availability Date in a Purchase Order. No other terms or conditions contained in any Dyax Purchase Order form(s) shall be binding on Cook. Provided that the Purchase Order is consistent with the [*****] and the conditions above are met, Cook shall accept the Purchase Order and provide a confirmation of receipt including the scheduled Drug Substance thaw date and Product Availability Date. Upon Dyax’s receipt of the confirmation, such Purchase Order shall become a “Firm Order.” If Cook is unable to meet the Dyax’s requested Product Availability Date (except when caused by Dyax’s delay in delivery of Bulk Drug Substance or delays caused by a Component supplier) Cook shall so notify Dyax and provide to Dyax an alternative Product Availability Date which shall not be more than [*****] calendar days later than the initial Product Availability Date designated by Dyax in its Purchase Order. If the Purchase Order is not consistent with the [*****], the Parties shall negotiate in good faith to prepare mutually acceptable Purchase Order terms.

3.2.3 Cancellation of Purchase Orders. If Dyax cancels a Firm Order less than [*****] before the Product Availability Date, Dyax shall pay [*****]% of the Purchase Order amount.

3.2.4 Notwithstanding Section 3.2.3, if Cook fills Dyax’s schedule slot with new business (i.e. work that was not already scheduled for another client at the time of cancellation by Dyax) the Cancellation Fee shall be reduced to [*****]% of the amount otherwise payable hereunder.

3.2.5 Annual Order Increases. Notwithstanding the foregoing, the aggregate increase in any calendar year compared to the previous calendar year shall not exceed [*****] percent ([*****]%) or a total of [*****] batches, whichever is greater, without Cook’s written consent which shall not be unreasonably withheld.

3.3 Drug Product Storage.

3.3.1 In no event shall Cook be required to store Drug Product for more than [*****] days after Cook’s Disposition of Drug Product without Cook’s prior written consent and Dyax’s written agreement to reimburse Cook for all costs incurred in connection with such storage.

3.3.2 In no event shall Cook be required to store more than a [*****] day calendar supply of Drug Substance and Components as calculated using the Firm Order without the prior written consent of Cook and Dyax's written agreement to reimburse Cook for all costs incurred in connection with such storage.

3.3.3 Cook shall not be permitted to store Drug Product, Drug Substance and Components in third party storage facilities without prior written consent by Dyax; such consent will not be unreasonably withheld.

3.4 Supply Deficiencies

3.4.1 If there is a Supply Deficiency, Cook shall promptly notify Dyax, and Cook may take one or more of the following steps to remedy any remaining Supply Deficiency: (i) utilize suitable production capacity of Cook or its Affiliates not then committed to third party customers; and (ii) coordinate and cooperate with Dyax to reschedule Batches of Drug Product ordered hereunder in order to maximize Cook’s ability to rectify the Supply Deficiency while minimizing the disruption to any Purchase Order and/or Work Order then in force with Dyax and other third party customers.

3.4.2 The provisions of this Section 3.4 (“Supply Deficiencies”) shall be the sole liability of Cook and sole remedy of Dyax with respect to any Supply Deficiency. Dyax shall not be entitled to cancel any unfulfilled part of the Production and/or Firm Order or to refuse to accept the Production and/or Firm Order on grounds of late performance, late delivery or failure to produce the estimated quantities of Drug Product for Delivery.

3.5 Government Obligations. Cook is obligated to dedicate its vial line to specified products for up to [*****] upon [*****] notice by the U.S. government. Cook shall inform Dyax of changes to this obligation.

4. Quality and Regulatory Matters; Changes in Manufacturing

4.1 Quality Assurance and Quality Control. In addition to compliance with this Agreement, each Party shall fulfil its responsibilities as set out in the Quality Agreement. Subject always to the provisions of the Quality Agreement, Cook will not knowingly make any modification to the Master Batch Record as validated), any other Specification, raw materials, components, or testing without the written consent of Dyax. Cook agrees to inform Dyax within [*****] days of the result of any regulatory development or changes to Product Specifications that materially affect the Production of the Product. Cook shall notify Dyax of and require written approval from Dyax for changes to Master Batch Records and Product Specifications prior to the Production of subsequent Batches of Product.

4.2 New Products in the Facility. Cook recognizes that the addition of new products into its multi-product facilities could have an impact on the regulatory status of Drug Product. Cook will provide to Dyax information about the class of new products, but will not provide other clients’ confidential information, as agreed in the Quality Agreement. For the avoidance of doubt, the Parties agree that Cook will notify Dyax within [*****] prior to any other product introduced into the Facility to allow for proper assessment of such product’s impact on Drug Product Production and notification of applicable Regulatory Authorities.

4.3 Changes Mandated by Regulatory Authority.

4.3.1 If Facility, equipment, process or system changes are required of Cook as a result of a change in the regulatory requirements of a Regulatory Authority, and such regulatory changes apply solely and specifically to the production and supply of Drug Product, then Dyax and Cook will review such requirements and agree in writing to such regulatory changes and the cost to implement the changes, and Dyax shall bear the actual pre-approved costs of those changes. If such changes are initiated by the introduction of another product by another Cook client in the facility, than these costs shall be the sole responsibility of Cook.

4.3.2 Notwithstanding anything in Section 4.3.1, if such regulatory changes as described in Section 4.3.1 apply generally to Drug Product as well as to other products produced by Cook, then Cook shall bear the cost of those changes.

4.3.3 If Dyax requests Cook to comply with GMP as regulated under jurisdictions other than FDA and EMA, Dyax will provide Cook with information required to comply with such GMP rules and the Parties will mutually agree if and how the additional requirement can be met.

4.4 Disposition and Batch Record Review. Cook shall complete a Cook Disposition for each Batch of Drug Product. Cook shall ship Batch samples promptly after performance of the final manufacturing process step. On completion of Cook Release of each Batch, and no later than [*****] Business Days following the performance of the final manufacturing process step, Cook shall provide the Batch Record Package for such Batch to Dyax for review. Following receipt of the complete Batch Record Package and all Batch test results Dyax will complete a Dyax Disposition the Batch. Cook may be requested in accordance with the Quality Agreement to assist Dyax in any investigations to support Dyax Disposition. Not later than [*****] calendar days following delivery of the Batch samples and not later than [*****] calendar days after delivery of the complete Batch Record Package to Dyax, Dyax shall communicate to Cook any discovered problem that could result in rejection of the Batch or communicate the Dyax Disposition decision.

4.5 Non-Conforming Batch Drug Product. The provisions below shall apply in the event that: (i) during Cook Disposition of a Batch, it is ascertained that such Batch is a Non-Conforming Batch; or (ii) during Dyax Disposition of a Batch that such Batch is a Non-Conforming Batch within the period set out in Section 4.4 above and Cook accepts that such Batch is a Non-Conforming Batch; or (iii) an independent expert as provided for in Section 4.5.5 below determines that a Batch is a Non-Conforming Batch.

4.5.1 The Non-Conforming Batch shall not be Delivered to Dyax, unless Dyax requests it. If Dyax requests Delivery of the Non-Conforming Batch, Cook shall Deliver such Non-Conforming Batch in accordance with Section 7.

4.5.2 If the Non-Conforming Batch arose other than as a result of a Cook Factor, Dyax shall be obliged to make all payments associated with the manufacture and disposition of such Batch. If the Non-Conforming Batch was not the result of a Cook Factor, and Dyax wishes to replace the Non-Conforming Batch, the Parties will negotiate in good faith to schedule a new Batch. For the avoidance of doubt, if a Batch is rejected by Dyax, and such Batch’s failure is the result of nonconforming Dyax Materials, then such non-conformity shall not be deemed the result of the negligence or willful misconduct of Cook for purposes of this Article 4.

4.5.3 The following provisions shall apply if the Non-Conforming Batch arose as a result of an Cook Factor: (i) if Dyax wishes to take Delivery of the Non-Conforming Batch under Section 4.5.1, the Parties shall agree in writing to a reduction in the consideration payable with respect to such Batch; or (ii) if Dyax does not wish to take Delivery of the Non-Conforming Batch under Section 4.5.1, manufacture of a further Batch shall be undertaken at Cook's cost and expense (excluding cost of Drug Substance but including the cost of materials and Components) and as soon as reasonably practicable and the provisions of Section 2.3.4 shall apply.

4.5.4 In the event that Dyax claims that any Batch was a Non-Conforming Batch, subsequent to Cook Disposition and such non-conformance could not have been reasonably discovered by Dyax during the disposition period described in Section 4.4, then Dyax shall notify Cook in writing promptly after discovery of such latent defect and the Parties shall meet to discuss such matter. If the Parties are unable to agree after consultation with senior management of both Parties, then the matter shall be referred to an independent expert in accordance with the Quality Agreement.

4.5.5 If there is any dispute concerning whether any Batch was a Non-Conforming Batch and/or the reasons therefor, the Parties shall designate a qualified Third Party Laboratory or an independent expert (acting as an expert and not as an arbitrator) to determine whether or not the Batch is a Conforming Batch. The decision of such independent expert shall be in writing and shall be binding on both Cook and Dyax. The costs of such independent expert shall be borne by the Parties equally.

4.6 Regulatory.

4.6.1 Dyax shall have the right and responsibility for determining regulatory strategy, decisions and actions relating to the Drug Product, provided that Cook shall have the right and responsibility for determining regulatory strategy, decisions and actions to the extent relating to (i) the Facility; (ii) Cook quality systems; (iii) any requirement imposed on Cook by a Regulatory Authority or (iv) any other commitments made by Cook to other customers (each an "Cook Regulatory Responsibility"). Dyax shall therefore consult with Cook in relation to the Chemistry, Manufacturing and Controls (CMC) section of any submissions to Regulatory Authorities before submission to such Regulatory Authorities and Dyax shall not make any change to its regulatory filings, which may have an impact on any Cook Regulatory Responsibility without prior agreement with Cook.

4.6.2 Dyax shall have sole responsibility, at Dyax’s expense, for obtaining all permits and licenses necessary or required for the sale, marketing and commercialization of each Product Produced by Cook hereunder. Cook shall be responsible, at Cook’s expense, to obtain and maintain all permits and licenses required for it to carry out its development, regulatory and Production obligations hereunder.

4.6.3 Dyax will diligently pursue Regulatory Approval of marketing licenses for Drug Product Produced by Cook hereunder. Dyax will advise Cook of document requirements in support of BLA, MAA and similar applications required of foreign governments and agencies including amendments, license applications, supplements and maintenance of such. Cook will provide documents and assist Dyax in preparation of submissions to Regulatory Authorities designated by Dyax in support of Dyax’s BLA, MAA and similar applications required of foreign governments and licenses. All regulatory submission preparation and maintenance performed by Cook for Dyax shall be specified in relevant Work Orders.

4.6.4 Cook shall monitor and maintain reasonable records respecting its compliance with CGMPs in the manner provided by the Quality Agreement, including the process of establishment and implementation of the operating procedures and the training of personnel as are reasonably necessary to assure such compliance.

4.6.5 At Dyax’s request, Cook will authorize Regulatory Authorities to review applications related to the Product on Dyax’s behalf. Cook will notify Dyax within [*****] of all contacts with Regulatory Authorities (both written and verbal) related to each Product. Cook shall inform Dyax of the result of any regulatory inspection which directly affects the Production of a Product, including any notice of inspection, notice of violation or other similar notice received by Cook affecting Production, Facility, testing, storage or handling of a Product. In the event of a Regulatory inspection which directly involves Drug Product, Dyax shall be promptly, but no later than [*****] after initiation of inspections, informed of the inspection. In the event that there are inspectional observations, Dyax shall be informed immediately, but no later than [*****] calendar days after receipt of observations, and shall have the opportunity to review and provide Cook with comments to Cook’s response. Dyax shall provide its comments to the response of these observations within [*****] business days. The contents of Cook’s response shall be determined by Cook in its sole discretion

4.6.6 Except as provided in Section 4.6.5, any and all other communications from and to the Regulatory Authorities related to the Production of the Drug Product at the Facility shall be handled in accordance with the terms and conditions of the Quality Agreement, or as otherwise agreed in writing by Cook and Dyax.

4.6.7 Dyax shall be solely responsible for preparing and submitting to the Regulatory Authorities all documents necessary for the Regulatory Approval of Product including adverse drug experience reports, field alert reports, periodic reports and applications for renewals, variations, supplements and amendments. Cook shall prepare and maintain all regulatory filings and manufacturing files, certificates, authorizations, data and other records that directly pertain to the Production of the Drug Product, as further set forth in the Quality Agreement or as otherwise agreed in writing by Cook and Dyax.

4.6.8 Cook shall maintain the records required by the terms and conditions of the Quality Agreement, or as otherwise agreed to in writing by Cook and Dyax in a relevant Work Order. Cook agrees that, in response to any complaint, or in the defense by Dyax of any litigation, hearing, regulatory proceeding or investigation relating to the manufacture of Drug Product, Cook shall use reasonable efforts to make available to Dyax during normal business hours and upon reasonable prior written notice, such Cook employees and records reasonably necessary to permit the effective response to, defense of, or investigation of such matters, subject to appropriate confidentiality protections. Dyax shall reimburse Cook for all costs and expenses incurred by Cook in connection with the performance of Cook’s obligations under the immediately preceding sentence.

4.6.9 Each party promptly shall notify the other of new regulatory requirements of which it becomes aware which are relevant to the Production of a Drug Product under this Agreement and which are required by the FDA, any other applicable Regulatory Authority or other Applicable Laws or governmental regulations, and shall confer with each other with respect to the best means to comply with such requirements.

4.6.10 Dyax shall be the sole owner of all regulatory filings and all governmental approvals obtained by Dyax from any Regulatory Authority with respect to the Product. Notwithstanding the foregoing, and for the avoidance of doubt, all rights in and to Cook Intellectual Property Rights and Cook Confidential Information shall remain entirely vested in Cook.

4.7 Drug Product Recall. If Dyax is required to recall any Product because such Product may violate local, state or federal laws or regulations, the laws or regulations of any applicable foreign government or agency or the Product Specifications, or in the event that Dyax elects to institute a voluntary recall, Dyax shall be responsible for coordinating such recall. Dyax promptly

shall notify Cook if any Product is the subject of a recall and provide Cook with a copy of all documents relating to such recall. Cook shall cooperate with Dyax in connection with any recall, at Dyax’s expense. Unless such recall is caused solely by the gross negligence or willful misconduct of Cook or solely by Cook’s breach of its warranties under this Agreement, Dyax shall be responsible for all of the costs and expenses of such recall. In the event a recall, product withdrawal or field correction is necessary because both (i) Cook has delivered a Non-Conforming Drug Product to Dyax, and (ii) such non-conformity is solely due to the gross negligence or willful misconduct of Cook or solely by Cook’s breach of its warranties of Cook, Cook will bear all reasonable costs associated with such recall, product withdrawal or field correction (including but not limited to costs associated with receiving and administering the recalled Product and notification of the recall to those Persons whom Dyax deems appropriate) in accordance with and up to a cumulative total maximum amount set forth in the chart below; notwithstanding the chart below, provided, however, in no event shall Cook's liability for costs associated with such recall, product withdrawal or field correction exceed [*****].



Number of Consignees	Recall Class
Number of Consignees	I	II	III
<500	$[*****]	$[*****]	$[*****]
500-2000	$[*****]	$[*****]	$[*****]
2,000-10,000	$[*****]	$[*****]	N/A
10,000-25,000	$[*****]	$[*****]	N/A
>25,000	$[*****] per consignee	$[*****] per consignee	N/A

4.8 Drug Product Testing.

4.8.1 As set forth in a Work Order, Cook shall test, or cause to be tested by third party testing facilities audited by Cook, in accordance with Testing Standards and Procedures, each Batch of Product Produced pursuant to this Agreement before delivery to Dyax. A Certificate of Analysis for each Batch of Product delivered to Dyax shall set forth the items tested by Cook, specifications, and test results. Cook shall send, or cause to be sent, such certificates along with one (1) copy of the Batch Record Package to Dyax within [*****] calendar days after the final manufacturing process step if such Batch requires no investigations and/or additional testing. For the avoidance of doubt, Dyax is solely responsible for final Dyax Disposition of each Batch of the Product.

4.8.2 As set forth in a Work Order or Master Batch Record, Cook shall ship samples of a Batch to the Dyax-specified test laboratories promptly following performance of the final manufacturing step.

4.9 Drug Master File

Cook shall file and maintain the appropriate Drug Master File (“DMF”) and related reference applications (e.g. Facility master file) for its Production of each Product hereunder in accordance with 21 CFR 314.420, or European equivalents of such guidelines and regulations, as may be amended from time to time, at Cook’s expense, and Cook shall provide all needed rights of reference to Dyax for the fee set forth in a Work Order.

5. Intellectual Property

5.1 Background Intellectual Property. Nothing in this Agreement shall affect the ownership by either Party of any Intellectual Property owned by or in the possession of that Party at the date of this Agreement or Intellectual Property developed independently of this Agreement by any employee of that Party without reference to or reliance upon any of the Confidential Information disclosed by the other Party.

5.2 Non-exclusive License under Background Intellectual Property. Each Party hereby grants to the other Party a non-exclusive, royalty free license to use that Party's Background Intellectual Property during the term of this Agreement solely for the purposes of performing or exercising its rights under this Agreement. The foregoing license grant shall also include any and all information, data and processes developed subsequent to the Effective Date relating to the Production of Drug Product and shall extend beyond termination of this Agreement only as necessary to complete the Production of outstanding Work Orders.

5.3 Disclosure. Subject to the obligations of confidentiality set forth in Section 10.1 (“Confidential Information”), each Party shall disclose to the other Party any and all Inventions made pursuant to the activities undertaken relating to this Agreement at least quarterly or as may otherwise be agreed to in writing by the Parties.

5.4 Inventions. All Project Inventions shall be owned by Cook. To the extent that a Project Invention is patentable, Cook shall have the right but not the obligation to file, prosecute and maintain any patents or patent applications claiming or covering any Project Invention. All Product Inventions shall be owned by Dyax. Dyax shall have the right but not the obligation to file, prosecute and maintain any patents or patent applications claiming all Product Inventions. Each Party shall bear the expense of activities relating to its own filing, prosecution and maintenance of any patent or patent applications provided for by this Section 5.4. Each Party shall execute all writings or take such acts, at the other Party’s expense, as may be reasonably required for either Party to fully enjoy the rights and licenses granted pursuant to this Section 5.4.

5.5 No Implied Licenses. Except as expressly set forth in this Agreement, nothing contained in this Agreement shall be construed as granting, by implication, estoppel or otherwise, any licenses or rights under any patents or other intellectual property rights. Only licenses and rights granted expressly herein shall be of legal force and effect.

5.6 Trademarks. Dyax grants to Cook a non-exclusive, royalty free license to use the Dyax Trademarks for the sole purpose of allowing Cook to fulfill its responsibilities under this Agreement. Such license shall not be transferable in whole or in part. Dyax shall be solely responsible for selecting, registering and enforcing the Dyax Trademarks used to identify the Product and except as set forth in this Section 5.6 and shall have sole and exclusive rights in such Dyax Trademarks.

6. Representations; Warranties; Liability; Indemnity and Insurance

6.1 6.1 General. Each Party warrants to the other that:

6.1.1 such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized;

6.1.2 such Party (i) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder, and (ii) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;

6.1.3 this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against such Party in accordance with its terms;

6.1.4 all necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such Party in connection with this Agreement have been obtained;

6.1.5 the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i) do not conflict with or violate any requirement of Applicable Laws or regulations and (ii) do not conflict with, or constitute a default under, any contractual obligation of such Party. Cook has informed Dyax, and Dyax acknowledges, that Cook is a US Government contractor and that in an emergency, Cook may be obligated to give US Government production requirements over other production orders; and if this occurs, it shall not be deemed a breach by Cook of its representations and warranties under this clause, or under any other section of this Agreement;

6.1.6 to the best of its knowledge as of the date of this Agreement, each Party’s use of Background Intellectual Property pursuant to this Agreement for the purposes set out in this Agreement will not infringe the Intellectual Property of a Third Party; and

6.2 Warranties of Cook

6.2.1 The Services will be performed in accordance with the terms of this Agreement.

6.2.2 It has such permits, licenses and authorizations as are necessary to own its respective properties conduct its business and perform its obligations hereunder.

6.2.4 It will use reasonable endeavors to keep the Drug Substance, the Drug Product, the Dyax Materials, and the Dyax Confidential Information secure and safe from loss and damage in such manner as Cook stores its own material of similar nature.

6.2.5 It will not part with possession of the Drug Substance, the Drug Product, the Dyax Materials, or the Dyax Confidential Information, except solely for the purpose of services at any Third Party Laboratories or approved storage facility that may be required and only with Dyax's advance written permission.

6.2.6 It will not use the Dyax Materials, or the Dyax Confidential Information (or any part thereof) for any other purposes other than performance of Services under this Agreement.

6.2.7 All of the Services will be performed at the Facility unless prior written approval is obtained from Dyax, such approval not to be unreasonably withheld.

6.2.9 Unencumbered title to Drug Product will be conveyed to Dyax upon Delivery.

6.3 Warranties of Dyax

6.3.1 Dyax shall supply to Cook the Dyax Confidential Information, together with full details of any hazards relating to the Dyax Materials and their storage and use (if applicable). The biological and chemical properties of the Dyax Materials have been evaluated in accordance with FDA’s requirements for use in Phase 1 clinical trials and in a Phase 1a clinical trial and based on this evaluation the Dyax Materials are safe and non-hazardous for purposes of the Services to be performed hereunder. For the avoidance of doubt, the Dyax Materials and the Dyax Confidential Information supplied to remain the property of Dyax.

6.3.2 Dyax hereby grants Cook the non-exclusive right to use the Dyax Materials, and the Dyax Confidential Information for the purpose of this Agreement;

6.3.3 Dyax is not subject to any claim or notice of infringement or misappropriation of any third party intellectual property rights relating to the Dyax Confidential Information, Dyax Intellectual Property Rights and Dyax Materials used by Cook under this Agreement.

6.3.4 To Dyax's knowledge without independent investigation, as of the Effective Date of this Agreement, Dyax has the right to supply the Dyax Materials and the Dyax Confidential Information to Cook and the necessary rights to non-exclusively license or otherwise permit to use the same for the purpose of the Services; and Dyax shall not do or cause anything to be done which would adversely affect their ownership or entitlement to use the same for those purposes.

6.4 Indemnification by Dyax. Dyax will defend, indemnify and hold harmless Cook, its Affiliates and their respective directors, officers, employees and agents (the "Cook Indemnified Parties") from and against all claims, demands, liabilities, damages, penalties, fines, costs and expenses, including reasonable attorneys' and expert fees and costs, and costs or amounts paid to settle (collectively, "Losses") arising from or occurring as a result of a third party's claim (including any third party product liability or infringement claim), action, suit, judgment or settlement to the extent such Losses are due to or based upon: (i) the manufacture of the Product by Dyax or its contract manufacturer, or the sale or use thereof; (ii) negligence, recklessness, bad faith, intentional wrongful acts or omissions or violations of applicable law or regulation by or of Dyax or its Affiliates or their respective directors, officers, employees or agents; or (iii) the breach by Dyax of the terms of, or the inaccuracy of any representation or warranty made by it in this Agreement; except, in each case, to the extent that such Losses arise out of, and are allocable to any cause set forth in Section 6.5(i) or (ii).

6.5 Indemnification by Cook. Cook will defend, indemnify and hold harmless Dyax, its Affiliates and licensees and their respective directors, officers, employees and agents (the "Dyax Indemnified Parties") from and against all Losses arising from or occurring as a result of a third party's claim (including any third party product liability or infringement claim), action, suit, judgment or settlement to the extent such Losses are due to or based upon: (i) the negligence, recklessness, bad faith, intentional wrongful acts or omissions or violations of applicable law or regulation by or of Cook or its Affiliates or their respective directors, officers, employees or agents; or (ii) the breach by Cook of the terms of, or the inaccuracy of any representation or warranty made by it in this Agreement; except, in each case, to the extent that such Losses arise out of, and are allocable to any cause set forth in Section 6.4 (i), (ii) or (iii).

6.6 Claims for Indemnification.

6.6.1 A Person entitled to indemnification under thus Agreement (an "Indemnified Party") shall give prompt written notification to the Party from whom indemnification is sought (the "Indemnifying Party") of the commencement of any action, suit or proceeding relating to a third party claim for which indemnification may be sought or, if earlier, upon the assertion of any such claim by a third party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a third party claim as provided in this Section 6.6 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to give notice).

6.6.3 The Party not controlling such defense may participate therein at its own expense; provided that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith; provided further that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel in any one jurisdiction for all Indemnified Parties.

6.7 No Consequential or Punitive Damages. NEITHER PARTY HERETO WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES; PROVIDED THAT NOTHING IN THIS SECTION 6.7 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY WITH RESPECT TO THIRD PARTY CLAIMS.

6.8 Intellectual Property Indemnity. Each Party shall be liable for and indemnify the other Party against any liability, loss, claim, damage, proceedings and costs whatsoever arising out of any actual or suspected infringement of any Third Party Intellectual Property, including the requirement to pay a license fee to such Third Party for use of such Third Party Intellectual Property during the work under this Agreement (an "IP Infringement") as a result of the Indemnified Party's use in its performance of the work under this Agreement of the Background Intellectual Property provided by the Indemnifying Party, provided that the Indemnified Party: (a) gives notice to the Indemnifying Party of any IP Infringement forthwith on becoming aware of the same and ceases to use the Background Intellectual Property which is the subject of the IP Infringement; (b) gives the Indemnifying Party the right to conduct the defense to any such claim or action with respect to the IP Infringement, and the Indemnified Party does not at any time admit liability or otherwise settle or compromise or attempt to settle or compromise the said claim or action except with the express written consent of the Indemnifying Party; and (c) cooperates with the reasonable instructions of the Indemnifying Party and gives the Indemnifying Party such assistance as it shall reasonably require with respect to the conduct of such defense.

6.9 Liability for Use of Drug Substance and Drug Product. Liability with respect to the use of the Drug Product Delivered to Dyax shall rest solely with Dyax, and Dyax shall indemnify Cook against any liability, loss, damages, costs, legal costs, professional and other expenses whatsoever incurred or suffered by Cook arising out of or with respect to such use of the Drug Substance following its Delivery to Dyax, and/or any Drug Product produced therefrom; provided however, that the forgoing shall not apply to any liability arising out of Cook’s gross negligence or willful misconduct.

6.10 Liability for Use of the Production. Liability with respect to use or operation of the Production (or any part of the Production), by or on behalf of Dyax, other than by Cook under the terms of this Agreement and other than as a result of an infringement of Third Party Intellectual Property due to the incorporation of Cook's Background Intellectual Property for which Cook is obliged to indemnify Dyax under Section 6.8, shall rest solely with Dyax. Dyax shall indemnify Cook against any liability, loss, damages, costs, legal costs, professional and other expenses whatsoever incurred or suffered by Cook arising out of or with respect to use or operation of the Production by or on behalf of Dyax (other than by Cook under this Agreement).

6.11 Limitations. Dyax's sole and exclusive remedy with respect to a Non-Conforming Batch shall be limited to those remedies set out in Section 2.3.4 and 4.5. Other than with respect to indemnification liability for third party claims arising under Article 6, Cook's total liability (whether for breach of contract, negligence, breach of statutory duty and/or other tort, or otherwise, including any associated legal costs) in connection with or as a result of the work carried out under this Agreement [*****]. Neither Party shall be liable to the other for any indirect, consequential or special loss, loss of profits or damage howsoever arising.

6.12 Abatement. Notwithstanding anything to the contrary in this Agreement, in the event that Production is held, in a suit or proceeding, to infringe any intellectual property rights of a third party (or to constitute the misappropriation of a trade secret of a third party) and Production is enjoined, or Cook has an objective basis (confirmed by an opinion of its legal counsel) for believing that it is likely to be found to infringe or constitute a misappropriation, or is likely to be enjoined, then Cook shall, at its option, either (i) procure the right to continue Production at its own expense or (ii) modify the Production so that it becomes non-infringing or no longer constitutes a misappropriation, provided that Dyax is advised of such modification and determines that it has no adverse effect; provided, however, that if (a) and (b) are not reasonably practicable, then Cook shall have the right, in its sole discretion, to terminate this Agreement, effective upon the date the notice is given, by giving Dyax prior written notice of the termination.

6.13 Waiver of Subrogation. All Cook-Supplied Components and equipment used by Cook in the Production of Product (collectively, “Cook Property”) shall at all times remain the property of Cook and Cook assumes risk of loss for such property until delivery of Product to a common carrier as specified under Section 7.2. Cook hereby waives any and all rights of recovery against Dyax, or against its directors, officers, employees, agents or representatives, for any loss or damage to Cook Property to the extent the loss of damage is covered or could be covered by insurance (whether or not such insurance is described in this Agreement). Dyax assumes all risk of loss for all Dyax Materials supplied by Dyax, and all Product (collectively, “Dyax Property”). Dyax hereby waives any and all rights of recovery against Cook, or against its directors, officers, employees, agents or representatives, for any loss or damage to the Dyax Property to the extent the loss of damage is covered or could be covered by insurance (whether or not such insurance is described in this Agreement), unless such loss is the result of Cook’s gross negligence or willful misconduct.

6.14 Limitations an Essential Element of the Agreement. The Parties are willing to enter into this Agreement only in consideration of and in reliance upon the provisions of this Agreement limiting their exposure to loss or liability. Such provisions are an essential part of the bargain underlying this Agreement and have been reflected in the pricing and other consideration specified in this Agreement. Both Parties understand and agree that the exclusion of warranties, limitation of liability and the limitation of remedies allocate risks between the Parties as authorized under Applicable Laws.

6.15 Survival. The obligations of Cook and Dyax and under this Article 6 shall survive the termination or expiration of this Agreement, subject to the statutory periods of limitation of the Governing Law.

7. Supply of Materials; Delivery; Transportation of Product

7.1 Supply of Materials by Dyax. If requested by Cook, Dyax will make all materials to be supplied by it and all required information available to Cook’s Facility (DDP) (Incoterms 2010). Dyax is responsible for the suitability of the materials and information for the Services. Upon Dyax' request Cook will liaise with and assist Dyax or Dyax' nominated transportation agent to arrange transportation of products in the name of Dyax from or to the production site. Dyax shall inform Cook´s incoming goods department and the project manager of any Delivery to be made at least [*****] Business Days before any such Delivery to Cook is initiated.

7.2 Delivery. Conforming Batches may be Delivered to Dyax. All shipments will be Ex Works (EXW) (IncoTerms 2010) from the Facility, except that Cook will be responsible for packaging the Product as specified in the Batch Production Record, and Dyax shall bear all shipping and insurance charges as set out in the applicable Work Order, which means that (a) Product will be Delivered from the Facility to Dyax's carrier; and (b) risk of loss to Product shall pass to Dyax upon Delivery to the carrier.

7.3 Packaging and Labeling. Unless otherwise agreed, Cook shall package and label Product for Delivery in accordance with its standard operating procedures and in accordance with required shipping conditions. It shall be the responsibility of Dyax to inform Cook in writing in advance of any special packaging and labeling requirements for Product. All additional costs and expenses of whatever nature incurred by Cook in complying with such special requirements must be agreed to in advance in writing and will be charged to Dyax in addition to the Price.

7.4 Acceptance of Delivery. Dyax shall diligently examine the Product as soon as practicable after receipt. Notice of all claims arising out of:

7.4.1 Visible damage to or total or partial loss of Product in transit will be given in writing to Cook and the carrier within [*****] Business Days of receipt by Dyax; or

7.4.2 Non-Delivery will be given in writing to Cook and the carrier within [*****] calendar days after the receipt by Dyax of Cook's dispatch notice.

7.5 Damage Claims. Dyax shall make damaged Product and associated packaging materials available for inspection and shall comply with the reasonable requirements of any insurance policy covering the Product, for which notification has been given by Cook to Dyax. Cook shall offer Dyax all reasonable assistance in pursuing any claims arising out of the transportation of Product.

8. Records. Records of Services shall be kept available for Dyax's review at the Facility where the Services were performed (or a Third Party facility on behalf of the Cook facility). Cook will retain Batch, laboratory and other technical records ("Records") of Services for the longer of ten (10) years or for the minimum period required by applicable law and consistent with FDA regulations and guidance relating to the manufacture or testing of products intended to support an application for regulatory approval. To the extent that raw data from Services or descriptions of any of Cook's protocols, test methods, or SOPs are not included in the Dyax-approved protocol Work Order, or report pertaining to any particular Service and are required by a competent regulatory authority, Cook will upon written request by Dyax provide a copy of such raw data or relevant portions of such protocols, test methods, or SOPs to be used solely for purposes of such regulatory submission under the provisions of Confidentiality in accordance with Section 10. In the event Cook proposes to dispose of Records Cook shall provide Dyax written notice thereof. If within [*****] calendar days after such notice Dyax requests any Records, Cook shall provide to Dyax at Dyax's expense such Records rather than disposing thereof. Cook may, however, retain copies of any Records as are reasonably necessary for regulatory or insurance purposes, and to abide by the relevant commercial and tax law provisions, subject to Cook's obligation of confidentiality. Notwithstanding anything to the contrary in this Agreement, Cook shall not be required to destroy any computer files stored securely by Cook that are created during automatic system back-up.

9. Price and Terms of Payment

9.1 Price. Dyax shall pay the Price in accordance with the relevant provisions detailed in the relevant mutually agreed upon Work Order. The price in the relevant Purchase Order or Work Orders shall be the same as the price in Appendix A of this Agreement, subject to the provisions of Section 9.2. Dyax will not reimburse Cook for use of materials which are in excess of the quantities specified in the bill of materials or any agreed backup materials.

9.2 Price Increase. Beginning on the [*****] anniversary of the Effective Date, and on each succeeding anniversary of the Effective Date during the term of this Agreement, the then-current price for a Batch of CGMP Product shall be increased by the annual percentage increase, if any, for the most recent [*****] period for which figures are available in the [*****]. Price increases shall be effective for all new Work Orders placed after the applicable anniversary.

9.3 Payment. Cook shall generate invoices for all fees and cost reimbursements. Invoices for Product will be sent after completion of the relevant Work Order and/or Cook Disposition of each Batch of Drug Product, as applicable, and title to Product shall pass to Dyax upon such Cook Disposition. Invoices for cost reimbursement will be sent not less than monthly and include reasonable documentation of costs incurred. Unless otherwise indicated in writing by Cook, [*****]. Dyax shall pay undisputed invoices within [*****] days of receipt of a correct invoice. Invoices not disputed within [*****] days of receipt shall be deemed accepted and payment shall be made without deduction, deferment, set-off, lien or counterclaim of any nature. For the avoidance of doubt, the Parties acknowledge that an invoice for a Non-Conforming Batch will be considered to be a disputed invoice and

subject to Section 4.5.5. Such invoice shall not be due and payable under this Section 9.3 until the final decision of such independent expert. Payments may either be made by check or wire transfer of immediately available funds to the following account or such other account as Cook may designate from time to time:

By Wire:

[*****]

A/C Name: [*****]

A/C#: [*****]

ABA#: [*****]

International swift code: [*****]

International wire routing number: [*****]

9.4Payment Default. Invoices that remain unpaid more than [*****] days beyond the scheduled payment due date may be subject to an interest charge equal to the annual rate of [*****] interest [*****], interest to accrue on a [*****] basis both before and after judgment.

9.5 Taxes. Unless otherwise indicated in writing by Cook, all prices and charges are exclusive of any applicable taxes, levies, import duties, Goods and Services Tax (GST), Value Added Tax (VAT), and fees of whatever nature, imposed by or under the authority of any governmental body, all of which shall be paid by Dyax (other than taxes on Cook’s net income). Indiana sales tax shall be charged on all applicable transactions unless Dyax has provided to Cook a properly completed Indiana Exemption Certificate (Form ST-105). To the extent that Dyax has located at the Facility, Dedicated Equipment or other personal property that is subject to property tax, Cook may be obligated to report such property, and Dyax shall be obligated to file and pay all applicable Monroe County, Indiana property taxes.

10. Confidentiality

10.1 Confidential Information. Each Party agrees that during the Term of this Agreement and for a period of [*****] years thereafter, it will keep the Confidential Information of the other Party secret and confidential, respect the other Party’s proprietary rights therein and make use of and permit to be made use of such information only as necessary to perform its obligations and exercise its rights under this Agreement. Neither Party may disclose or permit the Confidential Information of the other Party to be disclosed to any third party except as expressly provided herein without the other Party’s prior written consent.

10.2 Disclosure of Confidential Information. Dyax and Cook shall grant access to the Confidential Information only to Affiliates, subcontractors, employees, consultants, marketing collaborators and contractors who reasonably need to know such information for purposes such Party’s exercise of its rights or performance of its obligations under this Agreement and who are subject to the same obligations of confidentiality as Cook and Dyax under appropriate confidentiality agreements.

10.3 Exceptions to Confidentiality. The obligations of Article 10 shall not apply to Confidential Information to the extent that it:

10.3.1 is now, or hereafter becomes, through no act or failure to act on the part of the receiving Party in breach of Section 10.1 (“Confidential Information”), generally known or available;

10.3.2 is known by the receiving Party at the time of receiving such information, as shown by contemporaneous written records predating such receipt;

10.3.3 is furnished after the Effective Date to the receiving Party by a third party, without breach of and not subject to any obligation of confidentiality; or

10.3.4 is independently developed by the receiving Party without use of or reference to Confidential Information of the other Party, as shown by independent written records, contemporaneous with such development.

10.3.5 Cook or Dyax is required to disclose under any statutory, regulatory, stock exchange or similar legislative requirement or court order, provided, however, that (i) receiving Party gives the disclosing Party prior written notice of such

required disclosure and assists the disclosing Party in its reasonable efforts to prevent or limit such disclosure; and (ii) the Confidential Information so disclosed otherwise remains the Confidential Information of the disclosing Party.

10.4 Return of Confidential Information. Upon any expiration or termination of this Agreement, each Party will use diligent efforts to return or destroy all Confidential Information of the other Party and copies, summaries, compilations, extracts or other derivatives thereof, except to the extent such Confidential Information is necessary to exercise any right surviving termination of this Agreement. Additionally, each Party will be allowed to keep one archival copy of any Confidential Information of the other Party solely for record keeping and for the purpose of determining its rights and obligations hereunder.

10.5 Restrictions on Soliciting or Hiring Employees. During the Term of the Agreement and for [*****] months after the Agreement terminates or expires, neither Party shall not, directly or indirectly, solicit, hire, employ or attempt to solicit, hire or employ any person who is or was an employee of the other Party during the Term (or the following [*****] months), or in any other way directly or indirectly seek to solicit, induce, bring about, influence, promote, facilitate, or encourage any such individual to work for the other Party.

10.6 Remedies. Each Party acknowledges and agrees that neither Party shall have an adequate remedy at law for a violation of this Article 10 and therefore shall be entitled to enforce this Article 10 by seeking temporary or permanent injunctive or mandatory relief obtained in any court of competent jurisdiction without prejudice to any other rights and/or remedies which may be available to such Party at law or in equity.

10.7 Use of Name. Except as set forth in Section 5.6, neither Party shall use the name or trademarks of the other Party, except to the extent that a Party is permitted to use the Confidential Information of the other Party or required to do so pursuant to this Article 10, without the prior written consent of such other Party, such consent not to be unreasonably withheld. Under no circumstances shall either Party state or imply in any promotional material, publication or other published announcement that the other Party has tested or approved any product.

10.8 Survival. The obligations of Cook and Dyax under this Section 10 shall survive the termination or expiration of this Agreement.

11. Term and Termination

11.1 Term. This Agreement will expire on the later of (a) five (5) years from the Effective Date or (b) the completion of all Services under the last Work Order executed by the Parties prior to the fifth anniversary of the Effective Date. This Agreement may be extended by mutual agreement of the Parties or earlier terminated in accordance with Section 11.2. or 11.3. Upon request of extension of this Agreement by Dyax, Cook shall notify Dyax of its acceptance or rejection of such request for extension in writing no later than [*****] calendar days from the date of such request by Dyax.

11.2 Termination without Cause.

11.2.1 Dyax may, in its sole discretion terminate this Agreement or any Work Orders at any time for any reason or no reason by giving not less than [*****] calendar days’ notice in writing to Cook. In the event of termination pursuant to this Section 11.2.1, Dyax shall pay Cook for all Services covered by any Work Order that have been performed or irrevocably committed as of the termination date, except that the terms of Sections 3.2.3 and 3.2.4 shall apply.

11.2.2 Cook may in its sole discretion terminate this Agreement or any Work Order at any time for any reason or no reason by giving not less than [*****] months’ notice in writing to Dyax. During such notice period, Cook shall (i) continue all work in progress, (ii) develop a mutually agreeable schedule for the Batches in the most recently accepted Rolling Forecast, (iii) Produce and complete Cook Disposition all Batches in accordance with the mutually agreeable schedule, and (iv) Cook shall provide to Dyax all completed and in progress deliverable for such Services and both Parties shall remain liable to each other for their respective obligations under this Agreement. In the event of termination pursuant to this Section 11.2.2 Dyax shall pay Cook for Services performed.

11.3 Termination for Cause. Cook and Dyax may each terminate this Agreement by notice in writing to the other upon the occurrence of any of the following events:

11.4 Termination for Insolvency. Subject to any limitations imposed by applicable law, either Party shall have the right to terminate this Agreement by giving notice to the other Party in the event that:

11.4.1 Such other Party shall have: (i) voluntarily commenced any proceeding or filed any petition seeking relief under the bankruptcy, insolvency or other similar laws of any jurisdiction, (ii) applied for, or consented to, the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (iii) filed an answer admitting the material allegations of a petition filed against or with respect to it in any such proceeding, (iv) made a general assignment for the benefit of creditors of all or substantially all of its assets, (v) become unable generally, or admitted in writing its inability, to pay all or substantially all of its debts as they become due, or (vi) taken corporate action for the purpose of effecting any of the foregoing; or

11.4.2 An involuntary proceeding shall have been commenced, or any involuntary petition shall have been filed, in a court of competent jurisdiction seeking: (i) relief with respect to such other Party, or of its property, under the bankruptcy, insolvency or similar laws of any jurisdiction, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for such other Party or for all or substantially all of its property, or (iii) the winding-up or liquidation of such other Party; and, in each case, such proceeding or petition shall have continued undismissed for [*****] days or an order or decree approving or ordering any of the foregoing shall have continued unstayed, unappealed and in effect for [*****] days.

11.5 Rights and Obligations upon Termination. Upon the termination of this Agreement for whatever reason:

11.5.1 Cook shall continue to operate as normal during the period following notice of termination and shall provide to Dyax all completed deliverables for such Services, and forecasting, ordering, manufacture and Delivery shall continue until the date of actual termination. Cook shall promptly return to Dyax all Dyax Confidential Information, and shall dispose of or provide to Dyax the Dyax Materials as directed by Dyax upon termination;

11.5.2 Dyax shall promptly return to Cook or destroy all Cook Know-How and Cook Confidential Information it has received from Cook;

11.5.3 At Dyax's request on termination, Cook shall provide reasonable cooperation to assist Dyax with technical transfer of the Production to an alternative manufacturer, subject to payment of a reasonable fee to Cook with respect to such transfer activity; and

11.5.4 Cook and Dyax shall do all such acts and things and shall sign and execute all such deeds and documents as the other may reasonably require to evidence compliance with this Section 11.5.

11.6 Survival. The following provisions shall survive termination: Sections 3.1, 3.2.2 thru 3.2.4 and 11.5, and Articles 4 thru10 and 12 thru 14.

12. Force Majeure. Neither Party shall be liable for failure to perform its obligations under this Agreement (or for a delay in the performance of such obligations), and neither shall be deemed in breach of its obligations, if such failure or delay is due to Force Majeure. In event of Force Majeure, the Party affected thereby shall use commercially reasonable efforts to cure or overcome the same and resume performance of its obligations hereunder. If an event of Force Majeure continues and causes a Party to delay its performance of its obligations for more than [*****] days, then the other Party shall have the right upon written notice to terminate this Agreement without any liability to the other Party.

13. Mediation, Arbitration, Governing Law, Jurisdiction, and Enforceability

13.1 Mediation. In the event of any dispute, controversy or claim arising out of or relating to this Agreement that the Steering Committee is unable to resolve, or the breach, termination or invalidity thereof, each Party shall by written notice to the other have the right to have such dispute referred to the executive management of Cook and Dyax for attempted resolution by good faith negotiations within [*****] calendar days after such notice is received. If resolved, the resolution shall be binding and final. If such executive management is unable to resolve such dispute within the [*****] calendar day period, and before arbitration is initiated, then the following shall apply:

13.1.1 If the dispute is predominantly concerned with a scientific or technical issue then the entire dispute shall be referred to an independent expert, appointed jointly by the Parties. If the Parties cannot agree on an independent expert, Section 13.2 shall apply. The decision of the independent expert shall be given in writing and considered final and binding on the Parties except if there has been a manifest error on the face of the decision whereupon the Parties may revert to their respective remedies under Section 13.2.

13.1.2 If the dispute is predominantly concerned with an issue other than scientific or technical then the Parties shall participate in a mediation that will last no less than [*****] hours unless the dispute is resolved before such time. Notwithstanding the requirement for the Parties to submit to mediation for a minimum of [*****] hours, neither Party will be required to participate in mediation for longer than [*****] hours. Any mediation will take place a mutually agreeable venue, and will be officiated by a mutually agreeable mediator identified and engaged by the Parties, the cost and fees for whom shall be borne equally by the Parties. In the event the Parties' efforts to reach an amicable resolution through mediation or other informal means are unsuccessful, either Party may invoke the provisions of Section 13.2. Any settlement reached by the Parties under this Section shall not be binding until reduced to writing and signed by the above-specified management of Cook and Dyax. When reduced to writing, such agreement shall supersede all other agreements, written or oral, to the extent such agreements specifically pertain to the matters so settled.

13.2 Arbitration. In the event of the failure to reach a resolution pursuant to Section 13.1, any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be finally settled by binding arbitration in accordance with the complex rules of the Commercial Arbitration Rules of the American Arbitration Association in effect on the date of this Agreement by a panel of three arbitrators who shall be experienced in the biopharmaceutical industry and who will be appointed in accordance with such rules. The place of arbitration will be New York, New York, and the Parties shall share equally filing fees, arbitrator fees or other costs of such proceedings, except that each Party shall bear its own attorney's fees, and other out-of-pocket arbitration expenses, unless the arbitrators decides otherwise.

13.3 Governing Law and Jurisdiction. The construction, validity and performance of this Agreement shall be governed by the laws of the State of New York.

13.4 Waiver. No failure or delay on the part of either Cook or Dyax to exercise or enforce any rights conferred on it by this Agreement shall be construed or operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege or further exercise thereof operate so as to bar the exercise or enforcement thereof at any time or times thereafter.

14. Miscellaneous

14.2 Independent Contractors. Cook and Dyax each acknowledge that they shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture, agency or any type of fiduciary relationship. Neither Cook nor Dyax shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior consent of the other Party to do so.

14.3 Affiliate(s). Any licenses granted under this Agreement by Dyax will be deemed to be granted both to Cook and Cook’s Affiliate(s). Cook shall cause its any of its Affiliate(s) that are in involved in providing the Services to Dyax to comply fully with the provisions of this Agreement to the extent such provisions specifically relate to, or are intended to specifically relate to, its Affiliate(s).

14.4 Counterparts/Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original signatures.

14.5 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by one Party to the other are, for all purposes of Section 365(n) of Title XI of the United States Code (“Title XI”), licenses of rights to “intellectual property” as defined in Title XI. During the Term of this Agreement each Party shall create and maintain current copies to the extent practicable of all such intellectual property. If a bankruptcy proceeding is commenced by or against one Party under Title XI, the other Party shall be entitled to a copy of any and all such intellectual property and all embodiments of such intellectual property developed or created by the Parties pursuant to this Agreement, and the same, if not in the possession of such other Party, shall be promptly delivered to it (a) upon such Party’s written request following the commencement of such bankruptcy proceeding, unless the Party subject to such bankruptcy proceeding, or its trustee or receiver, elects within [*****] days to continue to perform all of its obligations under this Agreement, or (b) if not delivered as provided under clause (a) above, upon such other Party’s request following the rejection of this Agreement by or on behalf of the Party subject to such bankruptcy proceeding. If a Party has taken possession of all applicable embodiments of the intellectual property of the other Party pursuant to this Section 12.14 (“Bankruptcy”) and the trustee in bankruptcy of the other Party does not reject this Agreement, the Party in possession of such intellectual property shall return such embodiments upon request. If a Party seeks or involuntarily is placed under Title XI and the trustee rejects this Agreement as contemplated under 11 U.S.C. 365(n)(1), the other Party hereby elects, pursuant to Section 365(n) of Title XI, to retain all rights granted to it under this Agreement to the extent permitted by Applicable Law.

14.6 Exporter of Record. Dyax shall be the exporter of record for any Product shipped out of the United States. Dyax warrants that all shipments of Product exported from the United States will be made in compliance with all export laws and regulations and all applicable import laws and regulations of the country of importation. Dyax shall be responsible for obtaining any licenses or government authorization(s) necessary for exportation from the United States, and for ensuring that all domestic and international shipments are made in accordance with all applicable laws and regulations, including but not limited to Department of Transportation and Department of Homeland Security regulations related to transportation of biological agents. Dyax’s designated carrier and freight forwarder shall solely be Dyax’s agent. Dyax shall select and pay the freight forwarder and such designated freight forwarder shall solely be responsible for preparing and filing any relevant declarations or other documents required for the export. Dyax shall bear all costs and expenses associated with this Section 12.15 (“Exporter of Record”).

14.7 Importer of Record. In the event any material or equipment to be supplied by Dyax, including without limitation Dyax-Supplied Components and Bulk Drug Substance, is imported into the United States for delivery to Cook (“Imported Goods”), such Imported Goods shall be imported DDP Bloomington, IN (Incoterms 2010). Dyax shall be deemed to be the “Importer of Record” of such Imported Goods. As the Importer of Record, Dyax shall be responsible for all aspects of the Imported Goods including, without limitation (a) payment of all tariffs, duties, customs, fees, expenses and charges payable in connection with the importation and delivery of the Imported Goods, and (b) keeping all records, documents, correspondence and tracking information required by applicable laws, rules and regulations arising out of or in connection with the importation or delivery of the Imported Goods.

14.8 Quality Agreement. The safety, quality control, and quality assurance aspects of the Services relating to Drug Substance or Drug Product shall be pursuant to the Quality Agreement. In the event of a conflict between the provisions of this Agreement and the provisions of the Quality Agreement, the provisions of this Agreement shall govern.

14.9 Notices. All notices to be given as required in the Agreement shall be in writing and may be delivered personally, or mailed either by a reputable overnight carrier with required receipt signature or certified mail, postage prepaid to the Parties at the addresses set forth above or at such other address as either Party may provide by written notice to the other Party in accordance with the provisions of this Section 14.9. Such notice shall be effective: (i) on the date sent, if delivered personally; (ii) the date after delivery if sent by overnight carrier; or (iii) on the date received if sent by certified mail.

(i)If to Dyax:

Dyax Corp

55 Network Drive

Burlington, MA 01803

Attn: General Counsel

(ii)If to Cook:

Cook Pharmica LLC

1300 South Patterson Drive

Bloomington, Indiana 47403

Attention: President

With a copy to:

Cook Group, Inc.

750 Daniels Way

Bloomington, IN 47402

Attention: General Counsel

14.10 Press Releases. The text of any press release or other communication to be published by or in the media concerning the subject matter of this Agreement shall require the prior written approval of Cook and Dyax.

14.11 Entire Agreement. This Agreement, together with the Appendices and Work Orders attached hereto, embody the entire understanding of Cook and Dyax and there are no promises, terms, conditions or obligations, oral or written, expressed or implied, other than those contained in this Agreement. The terms of this Agreement shall supersede all previous agreements (if any) which may exist or have existed between Cook and Dyax relating to the Services.

14.12 No Third Party Beneficiaries. The Parties to this Agreement do not intend that any terms hereof should be enforceable by any person who is not a Party to this Agreement.

14.13 Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed an original thereof.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by its duly authorized representatives as of the Effective Date.

Cook Pharmica LLC Dyax Corp.

By: /s/Ted M. Green By: /s/Gustav Christensen

Name : Ted M. Green Name: Gustav Christensen

Title: President Title: Chief Executive Officer

Date: 3/2/2015 Date: 2/23/15

Appendix A - Services

Services, Scope, Cost & Milestones

(Work Order)

Appendix B - Specifications

[*****]

Appendix C - Quality Agreement

AMENDMENT 1 TO THE

Manufacturing Services Agreement

This Amendment to the Manufacturing Services Agreement (the “Agreement”) made and entered into as of February 20, 2015 (the "Effective Date") is entered into by and between Cook Pharmica LLC, an Indiana limited liability company having its principle place of business at 1300 South Patterson Drive, Bloomington, Indiana 47403 (“Cook”) and Dyax Corp., a company organized under the laws of the State of Delaware, USA, having a principle place of business at 55 Network Drive, Burlington, Massachusetts, USA ("Dyax"). Cook and Dyax are referred to herein individually as a "Party" and collectively as the "Parties.”

NOW, the Parties hereto amend the Agreement as follows:

1. Section 4.5.2 shall be deleted and replaced with the following:

“If the Non-Conforming Batch arose other than as a result of a Cook Factor, Dyax shall be obliged to make all payments associated with the manufacture and disposition of such Batch. If the Non-Conforming Batch was not the result of a Cook Factor, and Dyax wishes to replace the Non-Conforming Batch, the Parties will negotiate in good faith to schedule a new Batch. For the avoidance of doubt, if a Batch is rejected by Dyax, and such Batch’s failure is the result of nonconforming Dyax Materials, then such non-conformity shall not be deemed the result of the negligence or willful misconduct of Cook for purposes of this Article 4. In addition, Dyax acknowledges and agrees that if a Batch is deemed to be Non-Conforming either because: (i) the Dyax Materials being used under quarantine are the cause of such Non-Conformance, or (ii) if Cook is unable to release the Batch due to the failure of Dyax Materials to meet specifications at the time the Dyax Materials were delivered to Cook, Dyax shall not be relieved of its obligation to pay Cook for such Non-Conforming Batch.”

2. No change or modification of this Amendment shall be valid or binding upon the Parties unless such change or modification is in writing and duly executed by the Parties.

4. Except as specifically set forth herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect.

5. This Amendment comes into force with the Effective Date of the Agreement.

(Rest of page intentionally left blank; signatures follow on the next page)

Signed on behalf of

Cook Pharmacia LLC

Date: 7/22/2015

Signature: /s/Tedd M. Green

Printed Name: Tedd M. Green

Position: President

Signed on behalf of

Dyax Corp.

Date: 7/17/2015

Signature: /s/Christopher Perley

Printed Name: Christopher Perley

Position: Sr. Vice President, Technical Operations

Exhibit 31.1

Certification Pursuant to Section 240.13a-14 or 240.15d-14

of the Securities Exchange Act of 1934, as amended



I, Gustav A. Christensen, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Dyax Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: November 6, 2015		/s/Gustav A. Christensen
		Gustav A. Christensen
		President and Chief Executive Officer

Exhibit 31.2

Certification Pursuant to Section 240.13a-14 or 240.15d-14

of the Securities Exchange Act of 1934, as amended



I, George Migausky, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Dyax Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: November 6, 2015		/s/George Migausky
		George Migausky
		Executive Vice President and
		Chief Financial Officer

Exhibit 32

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Each of the undersigned officers of Dyax Corp. (the "Company") certifies, under the standards set forth in and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: November 6, 2015		/s/Gustav. A Christensen
		Gustav A. Christensen
		President and Chief Executive Officer



Dated: November 6, 2015		/s/George Migausky
		George Migausky
		Executive Vice President and
		Chief Financial Officer

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Form 10-Q DYAX CORP For: Sep 30

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