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<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>1. Nature of Business and Basis of Presentation</b>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt">Celgene Corporation and its subsidiaries (collectively “Celgene” or the “Company”) is a global
biopharmaceutical company primarily engaged in the discovery, development and commercialization of
innovative therapies designed to treat cancer and immune-inflammatory diseases. The Company’s
primary commercial stage products include REVLIMID<sup style="font-size: 85%; vertical-align: text-top">®</sup>, THALOMID<sup style="font-size: 85%; vertical-align: text-top">®</sup> (inclusive of
Thalidomide Celgene<sup style="font-size: 85%; vertical-align: text-top">TM</sup> and Thalidomide Pharmion<sup style="font-size: 85%; vertical-align: text-top">TM</sup>, subsequent to the
acquisition of Pharmion Corporation, or Pharmion), VIDAZA<sup style="font-size: 85%; vertical-align: text-top">®</sup> and FOCALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup>.
ALKERAN<sup style="font-size: 85%; vertical-align: text-top">®</sup> was licensed from GlaxoSmithKline, or GSK, and sold under the Celgene label
through March 31, 2009, the conclusion date of the ALKERAN<sup style="font-size: 85%; vertical-align: text-top">®</sup> license with GSK. For a
period of two years, the Company will continue to earn residual payments based upon GSK’s
ALKERAN<sup style="font-size: 85%; vertical-align: text-top">®</sup> revenues. FOCALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> is sold exclusively to Novartis Pharma AG, or
Novartis. The Company also derives revenues from a licensing agreement with Novartis, which
entitles it to royalties on FOCALIN XR<sup style="font-size: 85%; vertical-align: text-top">®</sup> and the entire RITALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> family of
drugs, and sales of bio-therapeutic products and services through the Company’s Cellular
Therapeutics subsidiary.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The accompanying unaudited consolidated financial statements have been prepared from the books and
records of the Company pursuant to U.S. generally accepted accounting principles for interim
information and the rules and regulations of the Securities and Exchange Commission for interim
reporting. Pursuant to such rules and regulations, certain information and footnote disclosures
normally included in complete annual financial statements have been condensed or omitted. The
consolidated financial statements include the accounts of Celgene Corporation and its subsidiaries.
All intercompany transactions and balances have been eliminated. Investments in limited
partnerships and interests in which the Company has an equity interest of 50% or less and does not
otherwise have a controlling financial interest are accounted for by either the equity or cost
method. Certain immaterial reclassifications have been made to the prior period consolidated
financial statements in order to conform to the current period presentation. The interim
consolidated financial statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008, or the 2008 Annual Report on Form 10-K.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The preparation of the consolidated financial statements requires management to make estimates and
assumptions that affect reported amounts and disclosures. Actual results could differ from those
estimates. The Company is subject to certain risks and uncertainties related to product
development, regulatory approval, market acceptance, scope of patent and proprietary rights,
competition, technological change and product liability.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Interim results may not be indicative of the results that may be expected for the full year. In
the opinion of management, these financial statements include all normal and recurring adjustments
considered necessary for a fair presentation of these interim consolidated financial statements.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>2. Summary of Significant Accounting Policies</b>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s significant accounting policies are described in Note 1 of the Notes to the
Consolidated Financial Statements included in the 2008 Annual Report on Form 10-K.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>New Accounting Pronouncements: </b>In September 2006, the Financial Accounting Standards Board,
or FASB, issued Statement of Financial Accounting Standards, or SFAS, No. 157, “Fair Value
Measurements,” or SFAS 157, which establishes a framework for measuring fair value and expands
disclosures about fair value measurements. The FASB partially deferred the effective date of SFAS
157 for non-financial assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a nonrecurring basis to fiscal years beginning after November 15, 2008.
The Company’s adoption of SFAS 157 related to non-financial assets beginning January 1, 2009 did
not have a material impact on the Company’s consolidated financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In December 2007, the FASB ratified EITF Issue No. 07-1, “Accounting for Collaborative Arrangements
Related to the Development and Commercialization of Intellectual Property,” or EITF 07-1, which
provides guidance on how the parties to a collaborative agreement should account for costs incurred
and revenue generated on sales to third parties, how sharing payments pursuant to a collaboration
agreement should be presented in the income statement and certain related disclosure requirements.
EITF 07-1 was effective for the Company beginning January 1, 2009 on a retrospective basis and did
not have any impact on the Company’s consolidated financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” or SFAS 141R, which
replaces FASB Statement No. 141, “Business Combinations,” and requires an acquirer to recognize the
assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited exceptions.
SFAS 141R amended SFAS No. 109, “Accounting for Income Taxes,” or SFAS 109, and FASB Interpretation
No., or FIN, 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement
No. 109,” or FIN 48. Previously, SFAS 109 and FIN 48, respectively, generally required
post-acquisition adjustments to a business combination related deferred tax asset valuation
allowance and liabilities related to uncertain tax positions to be recorded as an increase or
decrease to goodwill. SFAS 141R does not permit this accounting and generally will require any
such changes to be recorded in current period income tax expense. Thus, after SFAS 141R is
adopted, all changes to valuation allowances and liabilities related to uncertain tax positions
from an acquisition (whether the combination was accounted for under SFAS 141 or SFAS 141R) must be
recognized in current period income tax expense. SFAS 141R was effective for the Company beginning
January 1, 2009 and the Company will account for future business combinations in accordance with
its provisions.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statements, an Amendment of ARB No. 51,” or SFAS 160, which changes the accounting for and
reporting of noncontrolling interests (formerly known as minority interests) in consolidated
financial statements. SFAS 160 was effective for the Company beginning January 1, 2009 and did not
have any impact on the Company’s consolidated financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities,” or SFAS 161, which is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity’s financial position, financial performance and cash flows.
SFAS 161 was effective for the Company beginning January 1, 2009. See Note 8 for expanded
disclosures required by SFAS 161.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In April 2008, the FASB issued FASB Staff Position, or FSP, No. FAS 142-3, “Determination of the
Useful Life of Intangible Assets,” or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should
be considered in developing renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets.” FSP
FAS142-3 was effective for the Company beginning January 1, 2009 and did not have any impact on the
Company’s consolidated financial statements.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt">In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement),” or FSP APB 14-1,
which requires separate accounting for the debt and equity components of convertible debt issuances
that have a cash settlement feature permitting settlement partially or fully in cash upon
conversion. A component of such debt issuances that is representative of the approximate fair
value of the conversion feature at inception should be bifurcated and recorded to equity, with the
resulting debt discount amortized to interest expense in a manner that reflects the issuer’s
nonconvertible, unsecured debt borrowing rate. The requirements for separate accounting must be
applied retrospectively to previously issued convertible debt issuances as well as prospectively to
newly issued convertible debt issuances, negatively affecting both net income and earnings per
share, in financial statements issued for fiscal years beginning after December 15, 2008. Since
the Company’s past convertible debt issuance did not include a cash settlement feature, the
adoption of FSP APB 14-1 did not have any impact on its consolidated financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In June 2008, the FASB issued FSP EITF No. 03-6-1, “Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities,” or FSP EITF 03-6-1. The FSP
addresses whether instruments granted in share-based payment transactions are participating
securities prior to vesting and therefore need to be included in the earnings allocation in
calculating earnings per share under the two-class method described in SFAS No. 128, “Earnings per
Share.” The FSP requires companies to treat unvested share-based payment awards that have
non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in
calculating earnings per share. FSP EITF 03-6-1 was effective for the Company beginning January 1,
2009. Since the Company’s past share-based payment awards did not include non-forfeitable rights
to dividends or dividend equivalents, the adoption of FSP EITF 03-6-1 did not have any impact on
its consolidated financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In November 2008, the FASB ratified EITF Issue No. 08-6, “Equity Method Investment Accounting
Considerations,” or EITF 08-6, which clarifies the accounting for certain transactions and
impairment considerations involving equity method investments. EITF 08-6 was effective for the
Company beginning January 1, 2009 and did not have any impact on the Company’s consolidated
financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In November 2008, the FASB ratified EITF Issue No. 08-7, “Accounting for Defensive Intangible
Assets,” or EITF 08-7, which clarifies the accounting for certain separately identifiable
intangible assets which an acquirer does not intend to actively use but intends to hold to prevent
its competitors from obtaining access to them. EITF 08-7 requires an acquirer in a business
combination to account for a defensive intangible asset as a separate unit of accounting which
should be amortized to expense over the period the asset diminishes in value. EITF 08-7 was
effective for the Company beginning January 1, 2009 and the Company will account for defensive
intangible assets acquired in future business combinations in accordance with its provisions.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly,” or FSP FAS 157-4. FSP FAS 157-4 amends SFAS 157 and provides additional guidance
for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the
asset or liability have significantly decreased and also includes guidance on identifying
circumstances that indicate a transaction is not orderly for fair value measurements. This FSP
shall be applied prospectively with retrospective application not permitted. This FSP was
effective for interim and annual periods ending after June 15, 2009, with early adoption permitted
for periods ending after March 15, 2009. The Company did not early adopt FSP FAS 157-4 and the
adoption of FSP FAS 157-4 did not have any impact on its consolidated financial statements.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt">In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments,” or FSP FAS 115-2 and FAS 124-2. This FSP amends SFAS 115,
“Accounting for Certain Investments in Debt and Equity Securities,” SFAS 124, “Accounting for
Certain Investments Held by Not-for-Profit Organizations,” and EITF Issue No. 99-20, “Recognition
of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That
Continue to Be Held by a Transferor in Securitized Financial Assets,” to make the
other-than-temporary impairments guidance more operational and to improve the presentation of
other-than-temporary impairments in the financial statements. This FSP will replace the existing
requirement that the entity’s management assert it has both the intent and ability to hold an
impaired debt security until recovery with a requirement that management assert it does not have
the intent to sell the security, and it is more likely than not it will not have to sell the
security before recovery of its cost basis. This FSP provides increased disclosure about the
credit and noncredit components of impaired debt securities that are not expected to be sold and
also requires increased and more frequent disclosures regarding expected cash flows, credit losses,
and an aging of securities with unrealized losses. Although this FSP does not result in a change
in the carrying amount of debt securities, it does require that the portion of an
other-than-temporary impairment not related to a credit loss for a held-to-maturity security be
recognized in a new category of other comprehensive income and be amortized over the remaining life
of the debt security as an increase in the carrying value of the security. This FSP was effective
for interim and annual periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. The Company did not early adopt FSP FAS 115-2 and FAS 124-2
and the adoption of FSP FAS 115-2 and FAS 124-2 did not have any impact on its consolidated
financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of
Financial Instruments,” or FSP FAS 107-1 and APB 28-1. This FSP amends SFAS No. 107, “Disclosures
about Fair Value of Financial Instruments,” to require disclosures about fair value of financial
instruments not measured on the balance sheet at fair value in interim financial statements as well
as in annual financial statements. Prior to this FSP, fair values for these assets and liabilities
were only disclosed annually. This FSP applies to all financial instruments within the scope of
SFAS 107 and requires all entities to disclose the method(s) and significant assumptions used to
estimate the fair value of financial instruments. This FSP was effective for interim periods
ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.
This FSP does not require disclosures for earlier periods presented for comparative purposes at
initial adoption. In periods after initial adoption, this FSP requires comparative disclosures
only for periods ending after initial adoption. The Company did not early adopt FSP FAS 107-1 and
APB 28-1 and the adoption of FSP FAS 107-1 and APB 28-1 did not have any impact on its consolidated
financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In April 2009, the FASB issued FSP FAS 141R-1, “Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies,” or FSP FAS 141R-1. FSP FAS
141R-1 amends and clarifies SFAS No. 141R to address application issues associated with initial
recognition and measurement, subsequent measurement and accounting, and disclosure of assets and
liabilities arising from contingencies in a business combination. FSP FAS 141R-1 was effective for
the Company beginning January 1, 2009 and the Company will account for assets or liabilities
arising from contingencies acquired in future business combinations in accordance with its
provisions.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” or SFAS 165, which established
general standards of accounting for and disclosure of events that occur after the balance sheet
date but before financial statements are issued. It sets forth the period after the balance sheet
date during which management of a reporting entity should evaluate events or transactions that
occur for a potential recognition or disclosure in the financial statements, the circumstances
under which an entity should recognize events or transactions occurring after the balance sheet
date in its financial statements and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. It was effective for financial statements
issued for interim and annual periods ending after June 15, 2009 and did not have any impact on the
Company’s consolidated financial statements.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt">In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets,” or SFAS
166, and SFAS No. 167, “Amendments to FASB Interpretation No. 46(R),” or SFAS 167. SFAS 166 is a
revision to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities,” or SFAS 140. It eliminates the concept of a “qualifying
special-purpose entity,” changes the requirements for derecognizing financial assets and requires
additional disclosures. SFAS 166 clarifies that the objective of paragraph 9 of SFAS 140 is to
determine whether a transferor and all of the entities included in the transferor’s financial
statements being presented have surrendered control over transferred financial assets. It also
enhances information reported to users of financial statements by providing greater transparency
about transfers of financial assets and a company’s continuing involvement in transferred financial
assets. SFAS 167 is a revision to FIN 46(R), “Consolidation of Variable Interest Entities,” or FIN
46(R), and changes how a company determines when an entity that is insufficiently capitalized or is
not controlled through voting (or similar rights) should be consolidated. The determination of
whether a company is required to consolidate an entity is based on, among other things, an entity’s
purpose and design and a company’s ability to direct the activities of the entity that most
significantly impact the entity’s economic performance. FIN 46(R) is amended to require ongoing
reassessments of whether an enterprise is the primary beneficiary of a variable interest entity.
SFAS 167 will require a company to provide additional disclosures about its involvement with
variable interest entities, any significant changes in risk exposure due to that involvement and
how its involvement with a variable interest entity affects the company’s financial statements.
Both SFAS 166 and SFAS 167 will be effective at the start of a company’s first fiscal year
beginning after November 15, 2009. The Company is currently evaluating the impact, if any, that
the adoption of SFAS 166 and SFAS 167 will have on its consolidated financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In June 2009, the FASB issued SFAS No. 168, “The <i>FASB Accounting Standards Codification</i><sup style="font-size: 85%; vertical-align: text-top"><i>TM</i>
</sup>and the Hierarchy of Generally Accepted Accounting Principles,” or SFAS 168, which
established the <i>FASB Accounting Standards Codification</i><sup style="font-size: 85%; vertical-align: text-top"><i>TM </i></sup>as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental entities in
preparation of financial statements in conformity with generally accepted accounting principles in
the United States. All other accounting literature not included in the <i>FASB Accounting Standards
Codification</i><sup style="font-size: 85%; vertical-align: text-top"><i>TM</i></sup> will be nonauthoritative. SFAS 168 is effective for financial statements
issued for interim and annual periods ending after September 15, 2009 and the Company does not
expect the adoption of SFAS 168 will have any impact on its consolidated financial statements.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>3. Acquisition of Pharmion Corporation</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On March 7, 2008, Celgene acquired all of the outstanding common stock and stock options of
Pharmion in a transaction accounted for under the purchase method of accounting for business
combinations. Celgene paid a combination of $920.8 million in cash and approximately 30.8 million
shares of Celgene common stock valued at $1.749 billion to Pharmion shareholders. The operating
results of Pharmion are included in the Company’s consolidated financial statements from the date
of acquisition.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following table provides unaudited pro forma financial information for the six-month period
ended June 30, 2008 as if the acquisition of Pharmion had occurred as of the beginning of the
period presented. For the six-month period presented, the unaudited pro forma results include the
nonrecurring charge for in-process research and development, or IPR&D, amortization of acquired
intangible assets, elimination of expense and income related to pre-acquisition agreements with
Pharmion, reduced interest and investment income attributable to cash paid for the acquisition and
the amortization of the inventory step-up to fair value of acquired Pharmion product inventories.
The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings
that may result from the combined operations of Celgene and Pharmion. Accordingly, these unaudited
pro forma results are presented for illustrative purposes and are not intended to represent or be
indicative of the actual results of operations of the combined company that would have been
achieved had the acquisition occurred at the beginning of the period presented, nor are they
intended to represent or be indicative of future results of operations.
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<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
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<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Six-Month Period</td>
<td> </td>
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<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2008</td>
<td> </td>
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<div style="margin-left:15px; text-indent:-15px">Total revenue
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,086,415</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,530,660</td>
<td nowrap="nowrap">)</td>
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<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
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<td>
<div style="margin-left:15px; text-indent:-15px">Net loss per common share: basic
and diluted
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.58</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Prior to the acquisition, Celgene had licensed exclusive rights relating to the development
and commercial use of THALOMID<sup style="font-size: 85%; vertical-align: text-top">®</sup> and its distribution system to Pharmion, and
also maintained a THALOMID<sup style="font-size: 85%; vertical-align: text-top">®</sup> supply agreement with Pharmion. The Company
accounted for these arrangements in accordance with EITF Issue No. 04-1, “Accounting for
Preexisting Relationships between the Parties to a Business Combination.” The effective settlement
of these arrangements resulted in no settlement gain or loss as the contractual terms were deemed
to be at market rates due to several factors including, but not limited to, the continued absence
of European marketing authorization for THALOMID<sup style="font-size: 85%; vertical-align: text-top">®</sup> since the agreements were
executed by unrelated entities in December 2004, the review of similar recent agreements entered
into by pharmaceutical and biotechnology companies containing similar economic terms and the lack
of a termination penalty for either party to the agreements. In addition, the Company has valued
the reacquired THALOMID<sup style="font-size: 85%; vertical-align: text-top">®</sup>-related rights when valuing the developed product
rights acquired. Any assets and liabilities that existed between Celgene and Pharmion as of the
acquisition date have been eliminated in the accompanying consolidated financial statements.
</div>
</div>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 4 - us-gaap:RestructuringAndRelatedActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>4. Restructuring</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The March 7, 2008 acquisition cost of Pharmion included $58.6 million in restructuring liabilities
primarily related to the planned exit of certain business activities, involuntary terminations and
the relocation of certain Pharmion employees. The remaining balance of these restructuring
liabilities totaled $27.6 million and $15.9 million as of December 31, 2008 and June 30, 2009,
respectively. The following table summarizes changes to the restructuring liabilities during the
six-month period ended June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Cumulative</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Payments</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Payments</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Severance costs
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,654</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,635</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(17,419</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Contract termination fees
</div></td>
<td> </td>
<td> </td>
<td align="right">22,485</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,859</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,100</td>
<td nowrap="nowrap">)<sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td align="right">13,526</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,525</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Facility closing costs
</div></td>
<td> </td>
<td> </td>
<td align="right">2,664</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(660</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,004</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,591</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">834</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(459</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">375</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,075</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total restructuring costs
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">27,637</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,613</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,100</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">15,924</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(36,610</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">In 2009, the Company amended a manufacturing contract on terms other than
those that had been expected.
</div></td>
</tr>
</table>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company expects to finalize the contractual terms of the remaining arrangements being
restructured during 2009.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
</body>
</html>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 5 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>5. Earnings Per Share (EPS)</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Basic earnings per share is computed by dividing net income by the weighted-average number of
common shares outstanding during the period. Diluted earnings per share is computed by dividing
net income adjusted to add back the after-tax amount of interest recognized in the period
associated with any convertible debt issuance that may be dilutive by the weighted-average number
of common shares outstanding during the period increased to include all additional common shares
that would have been outstanding as if the outstanding convertible debt was converted into shares
of common stock and assuming potentially dilutive common shares, resulting from option exercises,
had been issued and any proceeds thereof used to repurchase common stock at the average market
price during the period. The assumed proceeds used to repurchase common stock are the sum of the
amount to be paid to the Company upon exercise of options, the amount of compensation cost
attributed to future services and not yet recognized and, if applicable, the amount of excess
income tax benefit that would be credited to paid-in capital upon exercise. As of their maturity
date, June 1, 2008, substantially all of the Company’s convertible notes were converted into shares
of common stock.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three-Month Periods Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six-Month Periods Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">142,835</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">119,883</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">305,717</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,521,205</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest expense on convertible debt, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">456</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss) for diluted computation
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">142,835</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">120,339</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">305,717</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,521,205</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average shares:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td> </td>
<td align="right">459,586</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">442,640</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">459,584</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">427,451</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Effect of dilutive securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Options, restricted stock units, warrants
and other incentives
</div></td>
<td> </td>
<td> </td>
<td align="right">7,496</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible debt
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,519</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">467,082</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">466,687</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">467,759</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">427,451</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss) per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.31</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.27</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.67</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.56</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.31</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.26</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.65</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.56</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The total number of potential common shares excluded from the diluted earnings per share
computation because their inclusion would have been anti-dilutive was 21,040,000 and 9,778,698
shares for the three-month periods ended June 30, 2009 and 2008, respectively. The total number of
potential common shares excluded for the six-month periods ended June 30, 2009 and 2008 was
19,911,123 and 33,827,167, respectively. All of the potentially dilutive securities for the
six-month period ended June 30, 2008 were determined to be anti-dilutive as a result of the net
loss for the period. Substantially all of the Company’s convertible debt had been converted into
shares of common stock as of June 30, 2008.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On May 26, 2009, the Company entered into an agreement to purchase shares of its common stock from
Morgan Stanley & Co. Inc., for an aggregate purchase price of $100.0 million under an Accelerated
Share Repurchase, or ASR, program. The Company entered into this agreement as part of a $500.0
million share repurchase program approved by its Board of Directors in April 2009. The amount paid
was reflected in the Company’s Consolidated Balance Sheet at June 30, 2009 as a reduction to
Stockholders’ Equity.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On May 27, 2009, the Company received an initial delivery of 1.2 million shares, representing
approximately 50% of the shares that could have been purchased, based on the closing price of its
common stock on May 27, 2009. An additional 1.0 million shares were delivered on May 29, 2009, in
accordance with the terms of the agreement. The Company expects all ASR program purchases to be
completed no later than August 26, 2009. The total number of shares to be repurchased will be
determined at the completion of the ASR program based on the volume weighted-average-price of the
Company’s stock during the term of the agreement.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On a year-to-date basis, share repurchases totaled $100.0 million as of June 30, 2009.
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 6 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>6. Comprehensive Income (Loss)</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The components of comprehensive income (loss) consist of net income (loss), changes in pension
liability, changes in net unrealized gains (losses) on marketable securities classified as
available-for-sale, net unrealized gains (losses) related to cash flow hedges and changes in
foreign currency translation adjustments.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three-Month Periods Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six-Month Periods Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">142,835</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">119,883</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">305,717</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,521,205</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive income (loss):
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Marketable securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Net unrealized gains (losses) on marketable
securities available for sale, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">5,105</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,862</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,932</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Reversal of unrealized gains on Pharmion
investment, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62,806</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Reclassification adjustment for gains
included in net income (loss)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,204</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(951</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17,171</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,239</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total other comprehensive losses related to
marketable securities available for sale, net
of tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,099</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,813</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,239</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(64,941</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net unrealized gains (losses) related to cash flow
hedges, net of tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,917</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,843</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Currency translation adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right">31,066</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,455</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,700</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">28,179</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total other comprehensive income (loss) items
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,950</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,358</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">904</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(36,762</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Comprehensive income (loss)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">140,885</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">114,525</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">306,621</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,557,967</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 7 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>7. Financial Instruments and Fair Value Measurement</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The table below presents information about assets and liabilities that are measured at fair value
on a recurring basis as of June 30, 2009 and the valuation techniques the Company utilized to
determine such fair value. In general, fair values determined based on Level 1 inputs utilize
quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company’s
Level 1 assets consist of marketable equity securities. Fair values determined based on Level 2
inputs utilize observable quoted prices for similar assets and liabilities in active markets and
observable quoted prices for identical or similar assets in markets that are not very active. The
Company’s Level 2 assets consist primarily of U.S. Treasury fixed rate securities, U.S.
government-sponsored agency fixed rate securities, U.S. government-sponsored agency mortgage-backed
fixed rate obligations, Federal Deposit Insurance Corporation, or FDIC, guaranteed fixed rate
corporate debt, non-U.S. government issued fixed rate securities, non-U.S. government guaranteed fixed rate
securities, forward currency contracts and warrants for the purchase of equity securities.
Fair values determined based on Level 3 inputs utilize unobservable inputs and include valuations
of assets or liabilities for which there is little, if any, market activity. The Company’s Level 3
securities at June 30, 2009 consist of warrants for the purchase of equity securities in a
non-publicly traded company in which the Company has invested and which is party to a collaboration
and option agreement with the Company.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Quoted Price in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Significant</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Significant</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Active Markets for</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other Observable</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unobservable</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance at</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Identical Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Inputs</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Inputs</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 1)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 2)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 3)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Available-for-sale securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,631,125</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">510</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,630,615</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Warrants
</div></td>
<td> </td>
<td> </td>
<td align="right">830</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">830</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">15,687</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,687</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forward currency
contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,780</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,780</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,643,862</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">510</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,642,522</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">830</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Quoted Price in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Significant</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Significant</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Active Markets for</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other Observable</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unobservable</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance at</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Identical Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Inputs</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Inputs</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 1)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 2)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 3)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Available-for-sale securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,129,705</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">407</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,118,244</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,054</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Forward currency
contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(57,486</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(57,486</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,072,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">407</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,060,758</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,054</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following table is a roll-forward of the fair value of Level 3 securities (significant
unobservable inputs):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six-Month Periods Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at beginning of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,054</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37,038</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net gains (losses) (realized and unrealized)
</div></td>
<td> </td>
<td> </td>
<td align="right">2,436</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net purchases, issuances and settlements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,660</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21,542</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Transfers in and/or out of Level 3
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at end of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">830</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">15,496</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 8 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>8. Derivative Instruments and Hedging Activities</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Foreign Currency Forward Contracts: </b>Effective January 1, 2009, the Company adopted SFAS 161 and
enhanced its disclosures for derivative instruments and hedging activities by providing additional
information about its objectives for using derivative instruments, the level of derivative activity
the Company engages in, as well as how derivative instruments and related hedged items affect its
financial position and performance. Since SFAS 161 requires only additional disclosures concerning
derivatives and hedging activities, the adoption of SFAS 161 did not affect the presentation of the
Company’s financial position or results of operations.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company uses foreign currency forward contracts to hedge specific forecasted transactions
denominated in foreign currencies and to reduce exposures to foreign currency fluctuations of
certain assets and liabilities denominated in foreign currencies.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company enters into foreign currency forward contracts to protect against changes in
anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates,
primarily associated with non-functional currency denominated revenues and expenses of foreign
subsidiaries. The foreign currency forward hedging contracts outstanding at June 30, 2009 and
December 31, 2008 had settlement dates within 24 months. These foreign currency forward contracts
are designated as cash flow hedges under SFAS No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended, or SFAS 133, and, accordingly, to the extent effective, any
unrealized gains or losses on them are reported in other comprehensive income (loss), or OCI, and
reclassified to operations in the same periods during which the underlying hedged transactions
affect operations. Any ineffectiveness on these foreign currency forward contracts is reported in
other income, net. Foreign currency forward contracts entered into to hedge forecasted revenue and
expenses were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Notional Amount</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Foreign Currency</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Euro
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">688,650</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">704,198</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Yen
</div></td>
<td> </td>
<td> </td>
<td align="right">15,311</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">703,961</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">704,198</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The notional settlement amounts of the foreign currency forward contracts outstanding as of
June 30, 2009 and December 31, 2008 were $704.0 million and $704.2 million, respectively. The
Company considers the impact of its own and the counterparties’ credit risk on the fair value of
the contracts as well as the ability of each party to execute its obligations under the contract.
As of June 30, 2009 and December 31, 2008, credit risk did not materially change the fair value of
the Company’s foreign currency forward contracts.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company recognized reductions in net product sales for the settlement of certain effective cash
flow hedge instruments of $5.8 million and $6.6 million for the three- and six-month periods ended
June 30, 2009, respectively, and no reductions for each of the three- and six-month periods ended
June 30, 2008. These settlements were recorded in the same period as the related forecasted sales
occurred. The Company recognized reductions in research and development expenses for the
settlement of certain effective cash flow hedge instruments of $0.6 million and $1.6 million for
the three- and six-month periods ended June 30, 2009, respectively, and no reductions for each of
the three- and six-month periods ended June 30, 2008. These settlements were recorded in the same
period as the related forecasted research and development expenses occurred. Changes in time
value, which the Company excluded from the hedge effectiveness assessment for the three- and
six-month periods ended June 30, 2009, were included in other income, net.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company also enters into foreign currency forward contracts to reduce exposures to foreign
currency fluctuations of certain recognized assets and liabilities denominated in foreign
currencies. These foreign currency forward contracts have not been designated as hedges under SFAS
133 and, accordingly, any changes in their fair value are recognized in other income, net in the
current period. The aggregate notional amount of the foreign currency forward non-designated
hedging contracts outstanding at June 30, 2009 and December 31, 2008 were $361.2 million and $56.6
million, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following table summarizes the fair value and presentation in the consolidated balance sheets
for derivative instruments as of June 30, 2009 and December 31, 2008:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Asset Derivatives</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Liability Derivatives</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance Sheet</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance Sheet</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts designated as hedging instruments under SFAS 133
</div></td>
<td> </td>
<td colspan="3" align="center">Other current assets</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,054</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">Other current liabilities</td>
<td> </td>
<td align="left">$</td>
<td align="right">28,455</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts not designated as hedging instruments under SFAS 133
</div></td>
<td> </td>
<td colspan="3" align="center">Other current assets</td>
<td> </td>
<td align="left">$</td>
<td align="right">26,589</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">Other current liabilities</td>
<td> </td>
<td align="left">$</td>
<td align="right">2,968</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,643</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">31,423</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">December 31, 2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Asset Derivatives</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Liability Derivatives</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance Sheet</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance Sheet</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts designated as hedging instruments under SFAS 133
</div></td>
<td> </td>
<td colspan="3" align="center">Other current assets</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,552</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">Other current liabilities</td>
<td> </td>
<td align="left">$</td>
<td align="right">50,000</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts not designated as hedging instruments under SFAS 133
</div></td>
<td> </td>
<td colspan="3" align="center">Other current assets</td>
<td> </td>
<td align="left">$</td>
<td align="right">30</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">Other current liabilities</td>
<td> </td>
<td align="left">$</td>
<td align="right">9,068</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,582</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">59,068</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following tables summarize the effect of derivative instruments designated as hedging
instruments under SFAS 133 on the consolidated statements of operations for the three- and
six-month periods ended June 30, 2009 and 2008:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22" style="border-bottom: 1px solid #000000">For the Three-Month Period Ended June 30, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Amount of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Gain/(Loss)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Recognized in</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Income on</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Derivative</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><i>(Amount Excluded</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">on Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><i>From Effectiveness</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(31,141</td>
<td nowrap="nowrap">)(1)</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="left">Net product sales</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,810</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Other income, net</td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right" colspan="4">374</td>
<td nowrap="nowrap">(2)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" align="left">Research and development</td>
<td> </td>
<td align="left">$</td>
<td align="right">586</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>
<div style="text-align: justify">Losses of $21,757 are expected to be reclassified from
Accumulated OCI into operations in the next 12 months.
</div></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>
<div style="text-align: justify">Hedge ineffectiveness was insignificant and included with the
amount excluded from effectiveness testing.
</div></td>
</tr>
</table>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="18" style="border-bottom: 1px solid #000000">For the Three-Month Period Ended June 30, 2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">on Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">N/A</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">N/A</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="23%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22" style="border-bottom: 1px solid #000000">For the Six-Month Period Ended June 30, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in OCI</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">on Derivative</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">21,884</td>
<td nowrap="nowrap">(1)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" align="left">Net product sales</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,560</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Other income, net</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,236</td>
<td nowrap="nowrap">)(2)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" align="left">Research and development</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,602</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>
<div style="text-align: justify">Losses of $21,757 are expected to be reclassified from Accumulated OCI into operations in the next 12 months.
</div></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>
<div style="text-align: justify">Hedge ineffectiveness was insignificant and included with the amount excluded from effectiveness testing.
</div></td>
</tr>
</table>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="18" style="border-bottom: 1px solid #000000">For the Six-Month Period Ended June 30, 2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Reclassified from</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated OCI</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(Amount Excluded</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">on Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">into Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>From Effectiveness</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>(Effective Portion)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><i>Testing)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">N/A</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">N/A</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following table summarizes the effect of derivative instruments not designated as hedging
instruments under SFAS 133 on the consolidated statements of operations for the three- and
six-month periods ended June 30, 2009 and 2008:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain/(Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Recognized in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">Amount of Gain/(Loss) Recognized in Income on Derivative</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income on</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three-Month Periods Ended June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Six-Month Periods Ended June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts
</div></td>
<td> </td>
<td colspan="2" align="center" nowrap="nowrap">Other income, net</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,607</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">486</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,555</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(94</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
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<!-- Begin Block Tagged Note 9 - celg:CashCashEquivalentsAndMarketableSecuritiesAvailableForSaleTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>9. Cash, Cash Equivalents and Marketable Securities Available-for-Sale</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Money market funds of $456.7 million and $691.0 million at June 30, 2009 and December 31, 2008,
respectively, were recorded at cost, which approximates fair value and are included in cash and
cash equivalents.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated
fair value of available-for-sale securities by major security type and class of security at June
30, 2009 and December 31, 2008 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Estimated</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amortized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Gain</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Loss</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. Treasury securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">377,853</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,157</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(673</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">378,337</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government-sponsored agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">486,652</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,422</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(224</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">491,850</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government-sponsored agency MBS
</div></td>
<td> </td>
<td> </td>
<td align="right">467,595</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,177</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,039</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">472,733</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">FDIC guaranteed corporate debt
</div></td>
<td> </td>
<td> </td>
<td align="right">213,697</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,032</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(230</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">214,499</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-U.S. government issued securities
</div></td>
<td> </td>
<td> </td>
<td align="right">12,462</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,462</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-U.S. government guaranteed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">61,045</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">109</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(420</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">60,734</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Marketable equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">103</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">510</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total available-for-sale marketable securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,619,711</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,000</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,586</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,631,125</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Estimated</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amortized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">December 31, 2008</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Gain</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Loss</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. Treasury securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">263,541</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,394</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">271,935</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government-sponsored agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">571,072</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,985</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(212</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">587,845</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government-sponsored agency MBS
</div></td>
<td> </td>
<td> </td>
<td align="right">229,847</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,241</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(429</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">232,659</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">FDIC guaranteed corporate debt
</div></td>
<td> </td>
<td> </td>
<td align="right">25,546</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">265</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">25,805</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Private cash fund shares
</div></td>
<td> </td>
<td> </td>
<td align="right">11,054</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,054</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Marketable equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total available-for-sale marketable securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,101,467</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">28,885</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(647</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,129,705</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">U.S. government-sponsored agency securities include general unsecured obligations of the
issuing agency. U.S. government-sponsored mortgage-backed securities, or MBS, include fixed rate
asset-backed securities issued by the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation and the Government National Mortgage Association. FDIC guaranteed corporate
debt includes obligations of bank holding companies that meet certain criteria set forth under the
Temporary Liquidity Guaranty Program, or TLGP, and are unconditionally guaranteed by the FDIC.
Non-U.S. government issued securities consist of direct obligations of highly rated governments of
nations other then the United States. Non-U.S. government guaranteed securities consist of
obligations of agencies and other entities that are explicitly guaranteed by highly rated
governments of nations other then the United States. Net unrealized gains in U.S. Treasury fixed
rate securities, U.S. government-sponsored agency fixed rate securities, U.S. government-sponsored
agency mortgage-backed fixed rate obligations and FDIC guaranteed corporate fixed rate debt
primarily reflect the impact of decreased interest rates at June 30, 2009 and December 31, 2008.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Duration periods of available-for-sale debt securities were as follows at June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amortized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Duration of one year or less
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">361,447</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">365,196</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Duration of one through three years
</div></td>
<td> </td>
<td> </td>
<td align="right">1,222,555</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,230,131</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Duration of three through five years
</div></td>
<td> </td>
<td> </td>
<td align="right">25,940</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,915</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Duration of over five years
</div></td>
<td> </td>
<td> </td>
<td align="right">9,362</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,373</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,619,304</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,630,615</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 10 - us-gaap:InventoryDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>10. Inventory</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">A summary of inventories by major category at June 30, 2009 and December 31, 2008 follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">13,287</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,910</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Work in process
</div></td>
<td> </td>
<td> </td>
<td align="right">41,390</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,170</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods
</div></td>
<td> </td>
<td> </td>
<td align="right">22,162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,096</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">76,839</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">100,176</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 11 - us-gaap:EquityMethodInvestmentsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>11. Investment in Affiliated Companies</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">A summary of the Company’s equity investment in affiliated companies follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Investment in Affiliated Companies</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investment in affiliated companies<sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,606</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,862</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Excess of investment over share of equity <sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">2,870</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,530</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investment in affiliated companies
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">19,476</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18,392</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three-Month Periods Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six-Month Periods Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Equity in (Income) Losses of Affiliated Companies</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Affiliated companies (income) losses <sup style="font-size: 85%; vertical-align: text-top">(1) </sup>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,343</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">615</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,423</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">The Company records its interest and share of losses based on its ownership percentage.
</div></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">Consists of goodwill.
</div></td>
</tr>
</table>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Additional equity investments totaling $1.7 million were made during the six-month period
ended June 30, 2009. The six-month period ended June 30, 2008 included other-than-temporary
impairment losses of $4.4 million. These impairment losses were based on an evaluation of several
factors, including a decrease in fair value of the equity investment below its cost.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
</body>
</html>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 12 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>12. Intangible Assets and Goodwill</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Intangible Assets: </b>The Company’s intangible assets consist of developed product rights from the
Pharmion acquisition, contract-based licenses, technology and an acquired workforce. Remaining
amortization periods related to these categories range from one to eleven years. A summary of
intangible assets by category follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Intangible</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Assets,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Net</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Life (Years)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquired developed product rights
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">530,000</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(148,622</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">381,378</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">License
</div></td>
<td> </td>
<td> </td>
<td align="right">4,250</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,075</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology
</div></td>
<td> </td>
<td> </td>
<td align="right">290</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">221</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquired workforce
</div></td>
<td> </td>
<td> </td>
<td align="right">331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(171</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">160</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">534,871</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(149,937</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">384,934</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Intangible</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Assets,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">December 31, 2008</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Net</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Life (Years)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquired developed product rights
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">533,339</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(102,331</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">431,008</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">License
</div></td>
<td> </td>
<td> </td>
<td align="right">4,250</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(922</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,328</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology
</div></td>
<td> </td>
<td> </td>
<td align="right">290</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(59</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">231</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquired workforce
</div></td>
<td> </td>
<td> </td>
<td align="right">337</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(140</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">197</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">538,216</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(103,452</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">434,764</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The decrease in gross carrying value of intangibles at June 30, 2009 compared to December 31,
2008 was primarily due to elimination of the $3.3 million intangible related to
RIMIFON<sup style="font-size: 85%; vertical-align: text-top">®</sup>, which was obtained in the Pharmion acquisition and sold in March of 2009.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Amortization of intangible assets was $22.8 million and $35.3 million for the three-month periods
ended June 30, 2009 and 2008, respectively. Amortization for the six-month periods ended June 30,
2009 and 2008 was $46.5 million and $45.2 million, respectively. Amortization expense for the
six-month period ended June 30, 2008 included amortization of the intangible assets related to the
Pharmion acquisition only for the period subsequent to the March 7, 2008 acquisition date.
Assuming no changes in the gross carrying amount of intangible assets, the amortization of
intangible assets for the next five years is estimated to be approximately $83.8 million for the
year ending December 31, 2009 and approximately $64.3 million for each of the years ending December
31, 2010 through 2013.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Goodwill: </b>At June 30, 2009, the Company’s goodwill related to the March 7, 2008 acquisition of
Pharmion and the October 21, 2004 acquisition of Penn T Limited. The goodwill related to the
Pharmion acquisition reflects the allocation of the Pharmion purchase price.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The change in carrying value of goodwill is summarized as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2008
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">588,822</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Tax benefit on the exercise of Pharmion converted stock options
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(848</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Adjustments to Pharmion assets acquired
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(444</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Adjustments to Pharmion restructuring liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,100</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency translation
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,834</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at June 30, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">577,596</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 13 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>13. Share-Based Compensation</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following table summarizes the components of share-based compensation expense in the
consolidated statements of operations for the three- and six-month periods ended June 30, 2009 and
2008:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three-Month Periods Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six-Month Periods Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of good sold
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,001</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">632</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,973</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,160</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">14,965</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,685</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,663</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,300</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Selling, general and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">19,363</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,828</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36,217</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,961</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total share-based compensation expense
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">35,329</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26,145</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,853</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,421</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Share-based compensation cost included in inventory was $1.4 million at June 30, 2009 and $0.8
million at December 31, 2008.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Stock Options: </b>The weighted-average grant date fair value of the stock options issued during the
three-month periods ended June 30, 2009 and 2008 was $17.83 per share and $25.97 per share,
respectively. The weighted-average grant date fair value of the stock options issued during the
six-month periods ended June 30, 2009 and 2008 was $20.78 per share and $24.18 per share,
respectively. There have been no significant changes to the assumptions used to estimate the fair
value of options granted during the six-month period ended June 30, 2009 as compared to those
disclosed for the year ended December 31, 2008 in Note 15 to the Consolidated Financial Statements
included in the Company’s 2008 Annual Report on Form 10-K.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Stock option transactions for the six-month period ended June 30, 2009 under all plans are as
follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aggregate</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Exercise</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Remaining</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Intrinsic</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Price</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Contractual</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Options</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Per Option</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Term (Years)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(In Thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2008
</div></td>
<td> </td>
<td> </td>
<td align="right">33,805,610</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40.39</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">617,873</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Changes during the period:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">4,533,806</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">44.92</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,433,410</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">12.64</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(632,617</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">58.59</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expired
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(66,698</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">59.70</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">36,206,691</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41.72</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">440,490</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested at June 30, 2009 or expected
to vest in the future
</div></td>
<td> </td>
<td> </td>
<td align="right">35,604,005</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41.48</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">439,352</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested at June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">19,526,973</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29.14</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">407,384</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The total fair value of shares vested during the six-month periods ended June 30, 2009 and
2008 were $16.8 million and $13.2 million, respectively. The total intrinsic value of stock
options exercised during the six-month periods ended June 30, 2009 and 2008 was $48.7 million and
$194.8 million, respectively. The Company primarily utilizes newly issued shares to satisfy the
exercise of stock options.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of June 30, 2009, there was $304.9 million of unrecognized compensation expense related to the
Company’s stock option plan. These costs will be recognized over an expected remaining
weighted-average period of 2.6 years.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Restricted Stock Units: </b>Effective during the quarter ended June 30, 2009, the Company added
restricted stock units, or RSUs, to its equity program in order to provide an effective incentive
award with a strong retention component. Equity awards may, at the option of employee
participants, be divided between stock options and RSUs based on a two-thirds and one-third mix,
respectively, using a three-to-one ratio of stock options to RSUs in calculating the number of RSUs
to be granted. The fair value of RSUs is determined based on the closing price of the Company’s
common stock on the grant dates. Information regarding the Company’s RSUs during the six-month
period ended June 30, 2009 is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Share</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Grant Date</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Nonvested RSUs</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Equivalent</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at December 31, 2008
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Changes during the period:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">459,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39.20</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,448</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">39.01</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">456,725</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">39.20</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">There were no RSUs that vested during the six-month period ended June 30, 2009. The Company
expects to primarily utilize newly issued shares to satisfy the vesting of RSUs.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of June 30, 2009, there was $16.1 million of total unrecognized compensation cost related to
non-vested awards of RSUs. That cost is expected to be recognized over a weighted-average period
of 2.5 years. The Company recognizes compensation cost on a straight-line basis over the requisite
service period for the entire award, as adjusted for expected forfeitures.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 14 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>14. Income Taxes</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company periodically evaluates the likelihood of the realization of its deferred tax assets and
reduces the carrying amount of those deferred tax assets by a valuation allowance to the extent it
believes a portion will not be realized. The Company considers many factors when assessing the
likelihood of future realization of its deferred tax assets, including recent cumulative earnings
experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods
available to it for tax reporting purposes and other relevant factors. Significant judgment is
required in making this assessment.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">During the first quarter of 2009, the Company effectively settled an examination with the Internal
Revenue Service, or IRS, for the years ended December 31, 2004 and 2005. The Company’s U.S.
federal income tax returns have now been audited by the IRS through the year ended December 31,
2005. The Company is also subject to audits by various state and foreign taxing authorities,
including, but not limited to, most U.S. states and major European and Asian countries where the
Company has operations.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company regularly reevaluates its tax positions and the associated interest and potential
penalties, if applicable, resulting from audits of federal, state and foreign income tax filings,
as well as changes in tax law (including regulations, administrative pronouncements, judicial
precedents, etc.) that would reduce the technical merits of the position to below more likely than
not. The Company believes that its accruals for tax liabilities are adequate for all open years.
Many factors are considered in making these evaluations, including past history, recent
interpretations of tax law and the specifics of each matter. Because tax regulations are subject
to interpretation and tax litigation is inherently uncertain, these evaluations can involve a
series of complex judgments about future events and can rely heavily on estimates and assumptions.
The Company applies a variety of methodologies in making these estimates and assumptions which
include studies performed by independent economists, advice from industry and subject matter
experts, evaluation of public actions taken by the IRS and other taxing authorities, as well as the
Company’s industry experience. These evaluations are based on estimates and assumptions that have
been deemed reasonable by management. However, if management’s estimates are not representative of
actual outcomes, the Company’s results of operations could be materially impacted.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Unrecognized tax benefits, generally represented by liabilities on the consolidated balance sheet
and all subject to tax examinations, arise when the estimated benefit recorded in the financial
statements differs from the amounts taken or expected to be taken in a tax return because of the
uncertainties described above. These unrecognized tax benefits relate primarily to issues common
among multinational corporations. Virtually all of these unrecognized tax benefits, if recognized,
would impact the effective income tax rate. The Company accounts for interest and potential
penalties related to uncertain tax positions as part of its provision for income taxes. During the
first quarter of 2009, the Company effectively settled examinations with the IRS and with a foreign
taxing jurisdiction. The foreign examination related to a subsidiary acquired in the Pharmion
acquisition. These settlements resulted in a net tax benefit of $5.3 million, a decrease in the
liability for unrecognized tax benefits related to tax positions taken in prior years of $35.1
million and an increase in tax assets of $7.3 million. The Company believes that it is reasonably
possible that unrecognized tax benefits, as of June 30, 2009, could decrease by approximately $16.0
million over the next 12 months related to the settlement of routine examinations or through the
expiration of the statute of limitations. Increases to the amount of unrecognized tax benefits
from January 1, 2009 of approximately $35.2 million
relate primarily to current year operations. The liability for unrecognized tax benefits is
expected to increase in the next 12 months relating to operations occurring in that period.
</div>
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<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">During the six-month period ended June 30, 2008, the Company’s effective tax rate was impacted by
non-deductible IPR&D charges incurred in connection with the acquisition of Pharmion.
</div>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>15. Collaboration Agreements</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Novartis Pharma AG: </i></b>The Company entered into an agreement with Novartis in which the Company
granted to Novartis an exclusive worldwide license (excluding Canada) to develop and market
FOCALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> (d-methylphenidate, or d — MPH) and FOCALIN XR<sup style="font-size: 85%; vertical-align: text-top">®</sup>, the long-acting
drug formulation. The Company has retained the exclusive commercial rights to FOCALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup>
and FOCALIN XR<sup style="font-size: 85%; vertical-align: text-top">®</sup> for oncology-related disorders, such as chronic fatigue associated with
chemotherapy. The Company also granted Novartis rights to all of its related intellectual property
and patents, including new formulations of the currently marketed RITALIN LA<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The
Company also sells FOCALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> to Novartis and receives royalties on sales of all of
Novartis’ FOCALIN XR<sup style="font-size: 85%; vertical-align: text-top"><sup style="font-size: 85%; vertical-align: text-top">®</sup> </sup>and RITALIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> family of ADHD-related products.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Array BioPharma Inc.: </i></b>The Company has a research collaboration agreement with Array BioPharma
Inc., or Array, focused on the discovery, development and commercialization of novel therapeutics
in cancer and inflammation. As part of this agreement, the Company made an upfront payment in
September 2007 to Array of $40.0 million, which was recorded as research and development expense,
in return for an option to receive exclusive worldwide rights for compounds developed against two
of the four research targets defined in the agreement, except for Array’s limited U.S.
co-promotional rights. In June 2009, the Company made an additional upfront payment of $4.5
million to expand the research targets defined in the agreement, which was recorded as research and
development expense. Array will be responsible for all discovery and clinical development through
Phase I or Phase IIa and be entitled to receive, for each compound, potential milestone payments of
approximately $200.0 million, if certain discovery, development and regulatory milestones are
achieved and $300.0 million if certain commercial milestones are achieved, as well as royalties on
net sales.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s option will terminate upon the earlier of either a termination of the agreement, the
date the Company has exercised its options for compounds developed against two of the four research
targets defined in the agreement, or September 21, 2012, unless the term is extended. The Company
may unilaterally extend the option term for two additional one-year terms until September 21, 2014
and the parties may mutually extend the term for two additional one-year terms until September 21,
2016. Upon exercise of a Company option, the agreement will continue until the Company has
satisfied all royalty payment obligations to Array. Upon the expiration of the agreement, Array
will grant the Company a fully paid-up, royalty-free license to use certain intellectual properties
of Array to market and sell the compounds and products developed under the agreement. The
agreement may expire on a product-by-product and country-by-country basis as the Company satisfies
its royalty payment obligation with respect to each product in each country.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Prior to its expiration as described above, the agreement may be terminated by:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(i)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">the Company at its sole discretion, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(ii)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">either party if the other party
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(x)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">materially breaches any of its material obligations under the
agreement, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(y)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">files for bankruptcy.
</div></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">If the agreement is terminated by the Company at its sole discretion or by Array for a material
breach by the Company, then the Company’s rights to the compounds and products developed under the
agreement will revert to Array. If the agreement is terminated by Array for a material breach by
the Company, then the Company will also grant to Array a non-exclusive, royalty-free license to
certain intellectual property controlled by the Company necessary to continue the development of
such compounds and products. If the
agreement is terminated by the Company for a material breach by Array, then, among other things,
the Company’s payment obligations under the agreement could be either reduced by 50% or terminated
entirely.
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<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>PTC Therapeutics, Inc.: </i></b>In September 2007, the Company invested $20 million, of which $1.1 million
represented research and development expense, in Series 1 Convertible Preferred Stock of PTC
Therapeutics, Inc., or PTC, and also entered into a separate research and option agreement whereby
PTC would perform discovery research activities. If both parties subsequently agree to advance
research on certain discovery targets, a separate pre-negotiated collaboration and license
agreement would be entered into (See Note 17).
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The PTC research and option agreement expires on the earlier of the execution of the collaboration
and license agreement with respect to each of the discovery targets or September 10, 2009.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Acceleron Pharma: </i></b>The Company has a worldwide strategic collaboration with Acceleron Pharma, or
Acceleron, for the joint development and commercialization of ACE-011, a first-in-class, novel
bone-forming compound. The collaboration combines both companies’ resources and commitment to
developing products for the treatment of cancer and cancer-related bone loss. The Company also
signed an option agreement for certain discovery stage programs. Under the terms of the agreement,
Celgene and Acceleron will jointly develop, manufacture and commercialize Acceleron’s products for
bone loss. Celgene made an upfront payment to Acceleron in February 2008 of $50.0 million, which
included a $5.0 million equity investment in Acceleron, with the remainder recorded as research and
development expense. In addition, in the event of an initial public offering of Acceleron, Celgene
will purchase a minimum of $7.0 million of Acceleron common stock.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Acceleron will retain responsibility for initial activities, including research and development,
through the end of Phase IIa clinical trials, as well as manufacturing the clinical supplies for
these studies. In turn, Celgene will conduct the Phase IIb and Phase III clinical studies and will
oversee the manufacture of Phase III and commercial supplies. Acceleron will pay a share of the
development expenses and is eligible to receive development, regulatory approval and sales-based
milestones of up to $510.0 million for the ACE-011 program and up to an additional $437.0 million
for each of the three discovery stage programs. The companies will co-promote the products in
North America. Acceleron will receive tiered royalties on worldwide net sales.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The agreement will continue until the Company has satisfied all royalty payment obligations to
Acceleron and the Company has either exercised or forfeited all of its options under the agreement.
Upon the Company’s full satisfaction of its royalty payment obligations to Acceleron under the
agreement, all licenses granted to the Company by Acceleron under the agreement will become fully
paid-up, perpetual, non-exclusive, irrevocable and royalty-free licenses. The agreement may expire
on a product-by-product and country-by-country basis as the Company satisfies its royalty payment
obligation with respect to each product in each country.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Prior to its expiration as described above, the agreement may be terminated by:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(i)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">the Company at its sole discretion, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(ii)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">either party if the other party
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(x)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">materially breaches any of its material obligations under the
agreement, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(y)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">files for bankruptcy.
</div></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">If the agreement is terminated by the Company at its sole discretion or by Acceleron for a material
breach by the Company, then all licenses granted to the Company under the agreement will terminate
and the Company will also grant to Acceleron a non-exclusive license to certain intellectual
property of the Company related to the compounds and products. If the agreement is terminated by
the Company for a material breach by Acceleron, then, among other things, (A) the licenses granted
to Acceleron under the agreement will terminate, (B) the licenses granted to the Company will
continue in perpetuity, (C) all future royalties payable by the Company under the agreement will be
reduced by 50% and (D) the Company’s obligation to make any future milestone payments will
terminate.
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<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Cabrellis Pharmaceuticals Corp.: </i></b>The Company, as a result of its acquisition of Pharmion, obtained
an exclusive license to develop and commercialize amrubicin in North America and Europe pursuant to
a license agreement with Dainippon Sumitomo Pharma Co. Ltd, or DSP. Pursuant to Pharmion’s
acquisition of Cabrellis Pharmaceutics Corp., or Cabrellis, prior to the Company’s acquisition of
Pharmion, the Company will pay $12.5 million for each approval of amrubicin in an initial
indication by regulatory authorities in the United States and the European Union, or E.U., to the
former shareholders of Cabrellis. Upon approval of amrubicin for a second indication in the United
States or E.U., the Company will pay an additional $10.0 million for each market to the former
shareholders of Cabrellis. Under the terms of the license agreement for amrubicin, the Company is
required to make milestone payments of $7.0 million and $1.0 million to DSP upon regulatory
approval of amrubicin in the United States and the E.U., respectively, and up to $17.5 million upon
achieving certain annual sales levels in the United States. Pursuant to the supply agreement for
amrubicin, the Company is to pay DSP a semiannual supply price calculated as a percentage of net
sales for a period of ten years. In September 2008, amrubicin was granted fast track product
designation by the U.S. Food and Drug Administration, or FDA, for the treatment of small cell lung
cancer after first-line chemotherapy.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The amrubicin license expires on a country-by-country basis and on a product-by-product basis upon
the later of (i) the tenth anniversary of the first commercial sale of the applicable product in a
given country after the issuance of marketing authorization in such country and (ii) the first day
of the first quarter for which the total number of generic product units sold in a given country
exceeds 20% of the total number of generic product units sold plus licensed product units sold in
the relevant country during the same calendar quarter.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Prior to its expiration as described above, the amrubicin license may be terminated by:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(i)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">the Company at its sole discretion,
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(ii)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">either party if the other party
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(x)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">materially breaches any of its material obligations under the
agreement, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(y)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">files for bankruptcy,
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(iii)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">DSP if the Company takes any action to challenge the title or validity of the
patents owned by DSP, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(iv)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">DSP in the event of a change in control of the Company.
</div></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">If the agreement is terminated by the Company at its sole discretion or by DSP under circumstances
described in clauses (ii)(x) and (iii) above, then the Company will transfer its rights to the
compounds and products developed under the agreement to DSP and will also grant to DSP a
non-exclusive, perpetual, royalty-free license to certain intellectual property controlled by the
Company necessary to continue the development of such compounds and products. If the agreement is
terminated by the Company for a material breach by DSP, then, among other things, DSP will grant to
the Company an exclusive, perpetual, paid-up license to all of the intellectual property of DSP
necessary to continue the development, marketing and selling of the compounds and products subject
to the agreement.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>GlobeImmune, Inc.: </i></b>In September 2007, the Company made a $3.0 million equity investment in
GlobeImmune, Inc., or GlobeImmune. In April 2009 and May 2009, the Company made additional $0.1
million and $10.0 million equity investments, respectively, in GlobeImmune. In addition, the
Company has a collaboration and option agreement with GlobeImmune focused on the discovery,
development and commercialization of novel therapeutics in cancer. As part of this agreement, the
Company made an upfront payment in May 2009 of $30.0 million, which was recorded as research and
development expense, to GlobeImmune in return for the option to license compounds and products
based on the GI-4000, GI-6200, GI-3000 and GI-10000 oncology drug candidate programs as well as
oncology compounds and products resulting from future programs controlled by GlobeImmune.
GlobeImmune will be responsible for all discovery and clinical development until the Company
exercises its option with respect to a drug candidate program and will be entitled to receive
potential milestone payments of approximately $230.0 million for the GI-4000 program, $145.0
million for each of the GI-6200, GI-3000 and GI-10000 programs as well as $161.0 million for each
additional future program if certain development, regulatory and sales-based milestones are
achieved. GlobeImmune will also receive tiered royalties on worldwide net sales.
</div>
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<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s options with respect to the GI-4000, GI-6200, GI-3000 and GI-10000 oncology drug
candidate programs will terminate if the Company does not exercise its respective options after
delivery of certain reports from GlobeImmune on the completed clinical trials with respect to each
drug candidate program, as set forth in the initial development plan specified in the agreement.
If the Company does not exercise its options with respect to any drug candidate program or future
program, the Company’s option with respect to the oncology products resulting from future programs
controlled by GlobeImmune will terminate three years after the last of the options with respect to
the GI-4000, GI-6200, GI-3000 and GI-10000 oncology drug candidate programs terminates. Upon
exercise of a Company option, the agreement will continue until the Company has satisfied all
royalty payment obligations to GlobeImmune. Upon the expiration of the agreement, GlobeImmune will
grant the Company a fully paid-up, royalty-free license to use certain intellectual properties of
GlobeImmune to market and sell the compounds and products developed under the agreement. The
agreement may expire on a product-by-product and country-by-country basis as the Company satisfies
its royalty payment obligation with respect to each product in each country.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Prior to its expiration as described above, the agreement may be terminated by:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(i)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">the Company at its sole discretion, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(ii)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">either party if the other party
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(x)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">materially breaches any of its material obligations under the
agreement, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(y)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">files for bankruptcy.
</div></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">If the agreement is terminated by the Company at its sole discretion or by GlobeImmune for a
material breach by the Company, then the Company’s rights to the compounds and products developed
under the agreement will revert to GlobeImmune. If the agreement is terminated by the Company for
a material breach by GlobeImmune, then, among other things, the Company’s royalty payment
obligations under the agreement will be reduced by 50%, the Company’s development milestone payment
obligations under the agreement will be reduced by 50% or terminated entirely and the Company’s
sales milestone payment obligations under the agreement will be terminated entirely.
</div>
</div>
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<head></head>
<body>
<!-- Begin Block Tagged Note 16 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>16. Commitments and contingencies</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Collaboration Arrangements: </b>The Company has entered into certain research and development
collaboration agreements with third parties that include the funding of certain development,
manufacturing and commercialization efforts with the potential for future milestone and royalty
payments upon the achievement of pre-established developmental, regulatory and/or commercial
targets. The Company’s obligation to fund these efforts is contingent upon continued involvement
in the programs and/or the lack of any adverse events which could cause the discontinuance of the
programs. Due to the nature of these arrangements, the future potential payments are inherently
uncertain, and accordingly no amounts have been recorded in the Company’s consolidated balance
sheets at June 30, 2009 or December 31, 2008.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Contingencies: </b>The Company believes it maintains insurance coverage adequate for its current
needs. The Company’s operations are subject to environmental laws and regulations, which impose
limitations on the discharge of pollutants into the air and water and establish standards for the
treatment, storage and disposal of solid and hazardous wastes. The Company reviews the effects of
such laws and regulations on its operations and modifies its operations as appropriate. The
Company believes it is in substantial compliance with all applicable environmental laws and
regulations.
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
</body>
</html>
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<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 17 - us-gaap:ScheduleOfSubsequentEventsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>17. Subsequent Event</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s management has evaluated its subsequent events for disclosure in these interim
consolidated financial statements filed on Form 10-Q through July 31, 2009, the date on which the
Financial Statements were issued, and has identified the following event.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On July 16, 2009, the Company and PTC entered into a pre-negotiated collaboration and license
agreement under which PTC is eligible to receive quarterly research fees, as defined in the
agreement, and is entitled to receive potential milestone payments of approximately $129.0 million
if certain development, regulatory and sales-based milestones are achieved. PTC will also receive
tiered royalties on worldwide net sales. Under the agreement, the Company may transfer certain
research and development activities from PTC to the Company and upon such transfer the Company will
no longer fund such quarterly research fees to PTC.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The agreement will continue until the Company has satisfied all royalty payment obligations to PTC.
Upon the Company’s full satisfaction of its royalty payment obligations to PTC under the
agreement, the license granted to the Company by PTC under the agreement will become a
non-exclusive, fully paid-up, sub-licensable, royalty-free license to use certain intellectual
properties of PTC to market and sell the products developed under the agreement. The agreement may
expire on a product-by-product and country-by-country basis as the Company satisfies its royalty
payment obligation with respect to each product in each country.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Prior to its expiration as described above, the agreement may be terminated by:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(i)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">the Company at its sole discretion following the first anniversary of the
agreement, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(ii)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">either party if the other party
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(x)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">materially breaches any of its material obligations under the
agreement, or
</div></td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">(y)</td>
<td width="1%"> </td>
<td>
<div style="text-align: justify">files for bankruptcy.
</div></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">If the agreement is terminated by the Company at its sole discretion or by PTC for a material
breach by the Company, then all licenses granted to the Company under the agreement will terminate.
If PTC materially breaches any of its obligations under the agreement, the Company can either
terminate the agreement, in which case all licenses and rights granted under the agreement are
terminated, or elect to continue the agreement, in which case all milestone obligations cease and
future royalties payable by the Company under the agreement will be reduced by between 50% and 70%.
</div>
</div>
</body>
</html>
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false
--12-31
2009-06-30
10-Q
0000816284
458622488
Yes
Large Accelerated Filer
29035709107
CELGENE CORPORATION
No
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