S-1

As filed with the U.S. Securities and Exchange Commission on March 19, 2014.

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Alder BioPharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	2834	90-0134860
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

11804 North Creek Parkway South

Bothell, WA 98011

(425) 205-2900

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Randall C. Schatzman, Ph.D.

President and Chief Executive Officer

11804 North Creek Parkway South

Bothell, WA 98011

(425) 205-2900

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Sonya F. Erickson John T. McKenna Cooley LLP 1700 Seventh Avenue, Suite 1900 Seattle, WA 98101 (206) 452-8700 David J. Segre Michael Nordtvedt Wilson Sonsini Goodrich & Rosati, Professional Corporation 701 Fifth Avenue, Suite 5100 Seattle, WA 98104 (206) 883-2500

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	þ  (Do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(3)
Common stock, $0.0001 par value per share	$115,000,000	$14,812

(1) Estimated solely for the purpose of computing the amount of registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2) Includes shares the underwriters have the option to purchase.

(3) Calculated pursuant to Rule 457(o) under the Securities Act of 1933, as amended, based on an estimate of the proposed maximum aggregate offering price.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 19, 2014.

            Shares

Common Stock

We are selling             shares of our common stock.

Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $             and $             per share. We intend to apply for the listing of our common stock on The NASDAQ Global Market under the symbol “ALDR.”

We are an ‘‘emerging growth company’’ as defined under the U.S. federal securities laws and, as such, intend to comply with certain reduced public company reporting requirements for this and future filings.

The underwriters have an option to purchase a maximum of             additional shares to cover over-allotments.

Investing in our common stock involves risks. See ‘‘Risk Factors’’ on page 10.

	Price to Public	Underwriting Discounts and Commissions(1)	Proceeds to Alder
Per Share	$	$	$
Total	$	$	$

(1) We have agreed to reimburse the underwriters for certain expenses, see ‘‘Underwriting.’’

Delivery of the shares of common stock will be made on or about                    , 2014.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse	Leerink Partners
Wells Fargo Securities	Sanford C. Bernstein

The date of this prospectus is                    , 2014.

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY		1
SUMMARY CONSOLIDATED FINANCIAL DATA		8
RISK FACTORS		10
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA		41
USE OF PROCEEDS		43
DIVIDEND POLICY		44
CAPITALIZATION		45
DILUTION		47
SELECTED CONSOLIDATED FINANCIAL DATA		49
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		50
BUSINESS		63
MANAGEMENT		90
EXECUTIVE COMPENSATION		99
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		110
PRINCIPAL STOCKHOLDERS		113
DESCRIPTION OF CAPITAL STOCK		116
SHARES ELIGIBLE FOR FUTURE SALE		121
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS		123
UNDERWRITING		126
LEGAL MATTERS		131
EXPERTS		131
WHERE YOU CAN FIND MORE INFORMATION		131
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

You should rely only on the information contained in this document or to which we have referred you. We have not, and the underwriters have not, authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Dealer Prospectus Delivery Obligation

Until                     , 2014, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

For investors outside the United States: we have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside the United States.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes and the information set forth under the sections of this prospectus titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements and Industry Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Unless the context otherwise requires, we use the terms “Alder,” “company,” “we,” “us” and “our” in this prospectus to refer to Alder BioPharmaceuticals, Inc. and, where appropriate, our consolidated subsidiaries.

Overview

We are a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize therapeutic antibodies with the potential to meaningfully transform current treatment paradigms. We have developed a proprietary antibody platform designed to select antibodies that have the potential to maximize efficacy as well as speed of onset and durability of therapeutic response. In addition, we believe our ability to efficiently manufacture antibodies using our yeast-based manufacturing technology, MabXpress, allows us to target diseases that traditionally have not been addressed by antibodies. We believe the clinical data obtained in our development program for ALD403, our wholly-owned clinical asset, exhibits the potential of this product candidate to transform the way physicians treat migraine prevention. Clazakizumab is being developed by our collaboration partner Bristol-Myers Squibb. Together with Bristol-Myers Squibb, we believe there is an opportunity to position Clazakizumab as an option for first-line biologic therapy for the treatment of rheumatoid arthritis by demonstrating superior disease control rates versus biologic standard of care. The most commonly prescribed biologic standard of care are anti-TNFs, such as Humira or Enbrel. We estimate that the rheumatoid arthritis therapy market had more than $12 billion in worldwide sales in 2012 and will grow to $15 billion by 2016. Both our lead product candidates were discovered internally, have achieved proof-of-concept and are expected to enter final Phase 2b dose-ranging trials in 2014 in preparation for progression to Phase 3 trials if supported by the data.

Our Current Pipeline

Our pipeline includes two internally discovered humanized monoclonal antibodies, one wholly-owned program and one partnered program, as well as preclinical programs targeting additional indications that are in the discovery phase.

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ALD403

ALD403 is our wholly-owned novel monoclonal antibody targeted to calcitonin gene-related peptide, or CGRP, for migraine prevention. CGRP is a validated target that is believed to play a key role in migraine. We are developing ALD403 for the prevention of migraine, and in a recent proof-of-concept trial, treatment with ALD403 resulted in 16% of patients achieving complete remission from their migraines. Approximately 36 million Americans suffer from migraines; however, only 22.3 million migraine sufferers have been clinically diagnosed. Migraine is a significant cause of disability, generally affecting individuals between the ages of 20 and 50, which are prime working years. The Migraine Research Foundation estimates U.S. employers lose more than $13 billion each year as a result of 113 million lost work days due to migraine. We believe the area of critical unmet need in migraine is preventive therapy with improved efficacy and tolerability to treat patients who have five or more migraine days per month. For the 12.6 million U.S. migraine patients who are candidates for migraine prevention, there are few therapeutic options to manage their disease. We believe this group of migraine patients is highly-motivated to seek new treatments due to the limited success of current therapies.

We recently completed a three month double blind, randomized, placebo-controlled proof-of-concept trial of ALD403 in 163 patients suffering from five to 14 migraine days per month, or high frequency migraine. In this trial, a single intravenous, or IV, dose of ALD403 completely prevented migraines in 16% of patients over the entire three month period versus zero with placebo, representing a statistically significant reduction (p<0.001). Furthermore, ALD403 reduced migraine days by at least half in 60% of patients. ALD403 had a similar level of safety to placebo and was well tolerated and our trial had a drop out rate of less than 5%.

In this trial, the “p” values were statistical calculations to determine whether the effects of ALD403 were significant in comparison to placebo based on pre-specified statistical targets. We specified that any result less than p=0.05 would be significant. As shown in the figure above, ALD403 provided a statistically significant reduction versus placebo in migraines at all response levels in these patients.

In the second half of 2014, we intend to initiate a Phase 2b dose-ranging trial in high frequency migraine patients in order to identify dose response and durability so we may select a dose to take forward into pivotal Phase 3 trials. We are developing both IV and subcutaneous delivery methods in order to provide options for less frequent dosing of the therapy and accommodate patients’ preferred method of administration. Thereafter, we plan to initiate pivotal Phase 3 trials in 2016 that will be designed to obtain regulatory approval in the United States and to support regulatory filings in Europe and other international markets for ALD403 for the treatment of patients with high frequency migraine and greater than 15 migraines per month, or chronic migraine. If ALD403 is approved, we plan to build a 75 to 100 person sales force targeting high-prescribing neurologists and headache centers in the United States and may selectively partner outside the United States.

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Clazakizumab

Clazakizumab is a novel monoclonal antibody that inhibits the pro-inflammatory cytokine interleukin-6, or IL-6, and is being developed for both rheumatoid arthritis, or RA, and psoriatic arthritis, or PsA. IL-6 is a protein associated with acute and chronic inflammation and is believed to initiate an acute immune response and the production of antibodies. IL-6 may also contribute to bone destruction. RA is a chronic inflammatory disorder that principally attacks joints. Approximately 2.4 million patients, predominantly women, suffer from RA in the United States. Uncontrolled RA is also associated with substantial morbidity and mortality. There is increasing recognition that treating patients aggressively early on in the course of their disease delays irreversible structural damage to joints. We estimate that global sales of the RA therapies was more than $12 billion in 2012 and will grow to $15 billion by 2016. The RA market is currently dominated by a class of drugs that target tumor necrosis factor alpha, or anti-TNFs. Nevertheless, anti-TNFs are associated with low rates of disease remission and the response to these agents is not typically durable. In 2012, the American College of Rheumatology recommended that treatment of RA should be directed at achieving remission in patients or low disease activity if remission cannot be achieved.

In November 2009, we entered into a license and collaboration agreement with Bristol-Myers Squibb, or BMS, which provides for up to $1.35 billion in upfront and milestone payments across multiple indications. To date, we have received $103.5 million from BMS in upfront and milestone payments and, subject to achievement of development-based milestones, we may become eligible to receive up to approximately $746 million in additional milestone payments. If Clazakizumab is approved, we may receive sales-based milestones up to $500 million and tiered royalties starting in the mid-teens up to 20% on net sales of Clazakizumab. In a recently completed Phase 2b trial, the rates of disease remission in patients treated with Clazakizumab plus methotrexate were numerically higher than those treated with Humira plus methotrexate. Methotrexate, or MTX, is one of the most commonly used medicines for the treatment of RA. MTX may decrease pain and swelling of RA and may delay or decrease damage to joints. MTX in combination with biologics has been shown to be more effective than MTX alone. Phase 2b dose-ranging trials are ongoing in preparation for progression to Phase 3 trials if supported by the data. Based on current plans, BMS is expected to complete its ongoing Phase 2b dose-ranging clinical trial of Clazakizumab in RA patients in the second half of 2014. Together with BMS, we believe there is an opportunity to position Clazakizumab as an option for first-line biologic therapy for the treatment of RA by demonstrating superior disease control rates versus a biologic standard of care in Phase 3 trials.

Our Technology Platform

Our proprietary antibody platform leverages three technologies for the selection, humanization and manufacturing of monoclonal antibodies. We focus on protein targets that have biology which has been validated by prior scientific or clinical research, specifically ligands, which are circulating proteins, rather than receptors, which are their fixed docking sites. We believe this strategy can lead to fewer drug doses at lower concentrations, while potentially minimizing off target activity and associated side-effects. To date we have discovered all of our product candidates in-house with a technology we call antibody selection, or ABS. This technology allows us to identify the best site to inhibit on a particular target ligand and select an antibody that has both a high affinity and specificity for the target. We have pioneered a process that humanizes rabbit antibodies to produce antibodies that are greater than 95% human. However, unlike fully-human antibodies, we specifically design our antibodies to lack certain sugars in an effort to minimize the body’s recognition of such antibodies as foreign, thereby limiting infusion reactions as well as maximizing durability of the therapeutic response.

Our yeast-based proprietary manufacturing technology, MabXpress, offers distinct advantages over traditional mammalian cell culture approaches widely used in the manufacturing of antibodies. We are able to efficiently and reproducibly manufacture large quantities of high-quality antibodies. This is in contrast to mammalian cell culture approaches that are generally characterized by extended production times, costly media, risk of viral contamination and a lack of uniformity of the end product. Our proprietary manufacturing processes are designed to produce antibodies on a significantly larger scale than traditional antibody manufacturing processes. Together, these technologies have enabled us to progress to proof-of-concept in the clinic significantly faster than traditional programs which rely on mammalian cells for manufacturing.

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Our Management

Our founders and executive management team have held senior positions at leading biotechnology and pharmaceutical companies, possess over 100 years of combined experience across drug discovery and development and have been involved in bringing seven drugs to market. Our combined experience led us to establish our proprietary platform that we believe enables us to develop best-in-class antibodies to transform current treatment paradigms.

Our Strategy

We aim to build an enduring, diversified biopharmaceutical company. We intend to leverage our expertise in discovery, development and commercialization to bring first-in-class and best-in-class monoclonal antibody therapeutics to patients who are underserved by current therapies.

Key elements of our strategy include:

• advance and commercialize ALD403 for the prevention of migraine;

• support BMS’s efforts to advance and commercialize Clazakizumab as an option for first-line biologic therapy initially in RA;

• leverage our technology platform to discover future product candidates for areas of unmet need; and

• build a leading biopharmaceutical company to transform current treatment paradigms.

Risks Related to Our Business

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this prospectus titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:

• We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future and we had an accumulated deficit of $145.8 million as of December 31, 2013.

• Drug development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never generated any revenues from product sales and may never be profitable.

• We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon research and development programs or commercialization efforts.

• Our success depends heavily on the approval and successful commercialization of ALD403 and Clazakizumab.

• Clinical trials of our product candidates will be costly and time consuming, and if they fail to demonstrate safety and efficacy to the satisfaction of the FDA or similar regulatory authorities, we will be unable to commercialize our product candidates.

• Our existing collaboration with BMS is important to our business. If BMS fails to perform as expected, delays or abandons the development of Clazakizumab, or if this or future collaborations are not successful, our business may be harmed.

• If we are unable to obtain, maintain and enforce intellectual property protection covering our product candidates, others may be able to make, use or sell products substantially the same as ours, which could adversely affect our ability to compete in the market.

• We face substantial competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.

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In addition, we are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in April 2012, and therefore we intend to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. We may take advantage of these exemptions for up to five years or until we are no longer an “emerging growth company.”

Corporate Information

We were incorporated in Delaware in May 2002 as Alder BioPharmaceuticals, Inc. Our headquarters are located at 11804 North Creek Parkway South, Bothell, WA 98011, and our telephone number is (425) 205-2900. Our website address is www.alderbio.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated by reference into this prospectus and should not be considered to be part of this prospectus.

“Alder” and the Alder logo are the property of Alder BioPharmaceuticals, Inc. This prospectus contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ^® or ^™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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The Offering

Common stock offered by Alder in the offering             shares

Common stock to be outstanding after this offering             shares

Over-allotment option             shares

Use of proceeds We estimate the net proceeds from this offering to be approximately $             million, assuming an initial public offering price of $            per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We expect to use the proceeds of this offering for our ongoing clinical program for ALD403 and for preclinical product development activities, working capital and other general corporate purposes, which may include the acquisition or licensing of other products, businesses or technologies. See the section of the prospectus titled “Use of Proceeds” for a more complete description of the intended use of proceeds from this offering.

Risk factors See the section of the prospectus titled “Risk Factors” beginning on page 10 and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed NASDAQ symbol “ALDR”

The number of shares of our common stock to be outstanding after this offering is based on 120,465,733 shares of common stock outstanding as of December 31, 2013 and excludes:

• 11,614,300 shares of common stock issuable upon the exercise of outstanding stock options as of December 31, 2013, at a weighted-average exercise price of $0.40 per share;

• 1,865,344 shares of common stock reserved for future issuance under our 2005 Stock Plan as of December 31, 2013, which shares will cease to become available for future issuance immediately prior to the time our 2014 Equity Incentive Plan becomes effective;

•             shares of common stock to be reserved for future issuance under our 2014 Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this benefit plan which will become effective upon the execution of the underwriting agreement related to this offering; and

•             shares of common stock to be reserved for issuance under our 2014 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this benefit plan which will become effective upon the execution of the underwriting agreement related to this offering.

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Unless otherwise indicated, all information in this prospectus reflects and assumes:

• the conversion of all outstanding shares of our preferred stock into an aggregate of 115,027,876 shares of our common stock, immediately prior to the closing of this offering;

• a          for          reverse stock split of our common stock and preferred stock effected on                     , 2014;

• no exercise by the underwriters of their over-allotment option; and

• that our amended and restated certificate of incorporation, which we will file in connection with the closing of this offering, and our amended and restated bylaws are effective.

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Summary Consolidated Financial Data

In the following tables, we provide our summary consolidated financial data. We have derived the summary consolidated statements of operations data for the years ended December 31, 2012 and 2013 and our consolidated balance sheet as of December 31, 2013 from our audited consolidated financial statements appearing elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future, and our interim results are not necessarily indicative of the results that should be expected for the full year. You should read this data together with our financial statements and related notes and the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

	Years Ended December 31,
	2012			2013
	(in thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues
Collaboration and license agreements	$	20,067		$	18,796
Operating expenses
Research and development		30,669			31,883
General and administrative		7,217			7,674
Total operating expenses		37,886			39,557
Loss from operations		(17,819	)		(20,761	)
Other income (expense)
Interest income		101			54
Other income		—			158
Interest expense		(88	)		—
Other expense		—			(64	)
Total other income		13			148
Net loss	$	(17,806	)	$	(20,613	)
Net loss per share—basic and diluted	$	(3.55	)	$	(3.84	)
Weighted average number of common shares used in net loss per share—basic and diluted		5,012,520			5,363,454
Pro forma net loss per share—basic and diluted(1)				$	(0.17	)
Pro forma weighted average number of common shares used in pro forma net loss per share—basic and diluted(1)					120,391,330

(1) See Note 15 to our consolidated financial statements for a description of the method used to compute basic and diluted net loss per share and pro forma net loss per share.

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	As of December 31, 2013
	Actual			Pro  Forma(1)			Pro Forma  As Adjusted(2)(3)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	23,227		$	23,227		$
Working capital		2,457			2,457
Total assets		26,739			26,739
Total liabilities		58,727			58,727
Convertible preferred stock		111,374			—
Accumulated deficit		(145,814	)		(145,814	)
Total stockholders’ deficit		(143,362	)		(31,988	)

(1) The pro forma column reflects (a) the conversion of all outstanding shares of preferred stock into 115,027,876 shares of common stock immediately prior to the closing of this offering and (b) the filing and effectiveness of our amended and restated certificate of incorporation upon the closing of this offering.

(2) The pro forma as adjusted column further reflects the sale of                  shares of our common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

(3) Each $1.00 increase (decrease) in the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, working capital, total assets and total stockholders’ (deficit) equity on a pro forma as adjusted basis by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus remains the same. Similarly, each increase (decrease) by 1,000,000 shares in the number of shares offered by us would increase (decrease) each of cash and cash equivalents, working capital, total assets and total stockholders’ (deficit) equity on a pro forma as adjusted basis by approximately $         million, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions. The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should consider carefully the following risks, together with all the other information in this prospectus, including our financial statements and notes thereto, before you invest in our common stock. If any of the following risks actually materializes, our operating results, financial condition and liquidity could be materially adversely affected. As a result, the trading price of our common stock could decline and you could lose part or all of your investment.

Risks Related to Our Business and the Development and Commercialization of Our Product Candidates

We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

We are a clinical-stage biopharmaceutical company. We do not currently have any products approved for sale, and we continue to incur significant research and development and general and administrative expenses. We have incurred significant operating losses in the past and expect to incur substantial and increasing losses for the foreseeable future. Our net loss was $17.8 million and $20.6 million for 2012 and 2013, respectively. As of December 31, 2013, we had an accumulated deficit of $145.8 million.

To date, we have devoted substantially all of our efforts to research and development, including clinical trials, but have not completed development or commercialized any product candidates. We anticipate that our expenses will increase substantially as we:

• continue the research and development of our product candidates, including clinical trials of ALD403;

• seek regulatory approvals for our product candidates that successfully complete clinical trials;

• establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize ALD403 if it receives regulatory approval; and

• enhance operational, financial and information management systems and hire additional personnel, including personnel to support development of our product candidates and, if a product candidate is approved, our commercialization efforts.

To be profitable in the future, we and our collaborators must succeed in developing and eventually commercializing products with significant market potential. This will require success in a range of activities, including advancing product candidates, completing clinical trials of product candidates, obtaining regulatory approval for these product candidates and manufacturing, marketing and selling those products for which regulatory approval is obtained. We are only in the preliminary stages of some of these activities. We and our collaborators may not succeed in these activities and may never generate revenues that are sufficient to be profitable in the future.

Drug development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never generated any revenues from product sales and may never be profitable.

We have devoted substantially all of our financial resources and efforts to developing our technology platform, identifying product candidates and conducting preclinical studies and clinical trials for our product candidates. We are still in the early stages of developing our product candidates and have not completed the development of any products. We have never generated revenues from the sale of any products. Our ability to generate revenues and achieve profitability depends in large part on our ability, on our own or with our collaborators, to achieve milestones and to successfully complete the development of, obtain the necessary regulatory approvals for, and commercialize our product candidates. We do not anticipate generating revenues from sales of products for the foreseeable future. Our ability to generate future revenues from product sales depends on our and our collaborators’ success in:

• completing clinical development and obtaining regulatory approval for ALD403 and Clazakizumab;

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• achieving the milestones set forth in our collaboration agreement with Bristol-Myers Squibb, or BMS, and any future collaboration agreements;

• launching and commercializing ALD403, if approved, and successfully establishing sales, marketing and distribution infrastructure;

• obtaining regulatory approvals for future product candidates that we discover and successfully develop;

• establishing and maintaining supply and manufacturing relationships with third parties; and

• maintaining, protecting, expanding and enforcing our intellectual property, including intellectual property we license from third parties.

Because of the numerous risks and uncertainties associated with biologic product development, we are unable to predict the timing or amount of increased expenses and when we will be able to achieve or maintain profitability, if ever. In addition, our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or FDA, or foreign regulatory agencies, to perform studies and trials in addition to those that we currently anticipate, or if there are any delays in our or our collaborators’ clinical trials or the development of any of our product candidates. If one or more of the product candidates that we independently develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing such product candidates.

We will need additional funds to support our operations, and such funding may not be available to us on acceptable terms, or at all, which would force us to delay, reduce or suspend our research and development programs and other operations or commercialization efforts.

We are focused on the advancement of ALD403 through the clinical development process, as well as the evaluation of future product candidates. The completion of the development and the potential commercialization of our product candidates, should they receive regulatory approval, will require substantial funds. As of December 31, 2013, we had $23.2 million in cash and cash equivalents. We believe that our available cash and cash equivalents and net proceeds from this offering will be sufficient to fund our anticipated level of operations through at least 2015. Our future financing requirements will depend on many factors, some of which are beyond our control, including the following:

• the achievement of milestones and receipt of payments under our collaboration agreement with BMS for Clazakizumab;

• the rate of progress, recruitment and cost of our clinical trials and clinical success for ALD403 and any future product candidates;

• the timing of, and costs involved in, seeking and obtaining approvals from the FDA and other regulatory authorities;

• the costs of commercialization activities if any of our product candidates, such as ALD403, receive regulatory approval, including sales, marketing and distribution infrastructure;

• the degree and rate of market acceptance of any products launched by us, BMS or future collaborators;

• our ability to enter into additional collaboration, licensing, commercialization or other arrangements and the terms and timing of such arrangements; and

• the emergence of competing technologies or other adverse market developments.

We do not have any material committed external source of funds or other support for our development efforts other than our collaboration agreement with BMS for the development and commercialization of Clazakizumab, which agreement is terminable by BMS without cause upon four months’ notice. If BMS terminates our collaboration agreement, or delays development of Clazakizumab, we would need to obtain substantial additional sources of funding to develop ALD403 as currently contemplated. If such additional

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funding is not available on favorable terms or at all, we may need to delay or reduce the scope of our ALD403 development program or grant rights in the United States, as well as outside the United States, to ALD403 to one or more partners.

Until we can generate sufficient revenues to finance our cash requirements, which we may never do, we expect to finance future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. Additional financing may not be available to us when we need it or it may not be available on favorable terms. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, buying or selling assets, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of, suspend or eliminate one or more of our clinical trials or research and development programs or our commercialization efforts.

In addition, our planned clinical trial for ALD403 may encounter manufacturing, enrollment or other issues that could cause our development costs to increase more than we expect. Even with the expected net proceeds from this offering, we do not have sufficient cash to complete the clinical development of any of our product candidates and will require additional funding in order to complete the development activities required for regulatory approval of ALD403 or any future product candidates that we develop independently. Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development and commercialize our product candidates.

Furthermore, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

If Clazakizumab or ALD403 is not successfully commercialized, our business will be harmed.

We currently only have two product candidates in clinical trials. We have entered into a collaboration agreement with BMS for the commercialization and development of Clazakizumab. Pursuant to our agreement, BMS makes all the final decisions regarding development and commercialization of Clazakizumab in all diseases other than cancer, which we retained, subject to BMS’s option to co-develop Clazakizumab for cancer and commercialize Clazakizumab for cancer outside the United States. We also have invested a significant portion of our efforts and financial resources into the development of ALD403 to prevent migraines. Our ability to generate revenues from products, which we do not expect to occur for the foreseeable future, if ever, will depend heavily on the successful development, regulatory approval and eventual commercialization of our product candidates. The success of these product candidates will depend on several factors, including the following:

• successful enrollment in, and completion of, clinical trials;

• our ability, with respect to ALD403, or BMS’s ability, with respect to Clazakizumab, to reach agreements with the FDA and other regulatory authorities on the appropriate regulatory path for approval for these product candidates;

• receipt of approvals from the FDA and similar regulatory authorities outside the United States for these product candidates;

• establishing commercial manufacturing arrangements with third parties;

• successfully launching sales, marketing and distribution of any product candidate that may be approved, whether alone or in collaboration with others;

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• acceptance of any approved product by the medical community, third-party payors and patients and others involved in the reimbursement process, such as the National Institute of Clinical Excellence in the United Kingdom;

• effectively competing with other therapies;

• achieving a continued acceptable safety profile of the product following approval, including intellectual property we license from third parties; and

• obtaining, maintaining, enforcing and defending intellectual property rights and claims.

If we do not achieve one or more of these factors in a timely manner, or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would harm our business.

If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA or similar regulatory authorities outside the United States or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

Before obtaining regulatory approval for the sale of our product candidates, we or our collaborators must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical trials are expensive, difficult to design and implement, can take many years to complete and are uncertain as to outcome. A failure of one or more of such clinical trials could occur at any stage of evaluation. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.

In some cases, we utilize novel mechanisms of action to treat diseases that have not previously been addressed by antibody therapies. We or our collaborators may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our or our collaborators’ ability to receive regulatory approval or commercialize our product candidates, including the following:

• clinical trials of our product candidates may produce negative or inconclusive results, and we or our collaborators may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

• the number of patients required for clinical trials of our product candidates may be larger than we or our collaborators anticipate, enrollment in these clinical trials may be insufficient or slower than anticipated or patients may drop out of these clinical trials at a higher rate than anticipated;

• the cost of clinical trials of our product candidates may be greater than anticipated;

• third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us or our collaborators in a timely manner, or at all;

• we or our collaborators might have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that our product candidates have unanticipated serious side-effects or other unexpected characteristics or that the patients are being exposed to unacceptable health risks;

• regulators may not approve our or our collaborators’ proposed clinical development plans;

• regulators or institutional review boards may not authorize us, our collaborators or our investigators to commence a clinical trial or conduct a clinical trial at a prospective site;

• regulators or institutional review boards may require that we, our collaborators or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; and

• the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate.

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If we or our collaborators are required to conduct additional clinical trials or other testing of our product candidates beyond those currently contemplated, if we or our collaborators are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we or our collaborators may:

• be delayed in obtaining regulatory approval for our product candidates;

• not obtain regulatory approval at all;

• obtain regulatory approval for indications that are not as broad as intended;

• have the product removed from the market after obtaining regulatory approval;

• be subject to additional post-marketing testing requirements; or

• be subject to restrictions on how the product is distributed or used.

Our product development costs will also increase if we experience delays in testing or approvals. We do not know whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we or our collaborators may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we or our collaborators do, which would impair our or our collaborators’ ability to commercialize our product candidates and harm our business and results of operations.

The results of clinical trials conducted at sites outside the United States may not be accepted by the FDA and the results or clinical trials conducted at sites inside the United States may not be accepted by international regulatory authorities.

We have conducted, and may in the future choose to conduct, one or more of our clinical trials outside the United States. In addition, BMS is currently conducting a Phase 2b trial of Clazakizumab in U.S. and international sites. Regions that are planned for inclusion in this trial include Australia, Argentina, Europe, Japan, Mexico and South Africa. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, the clinical trial must be well-designed and conducted and performed by qualified investigators in accordance with ethical principles. The study population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical trials conducted outside of the United States must be representative of the population for whom we intend to label the product in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations. There can be no assurance the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from our or BMS’s international clinical trials, or if international regulatory authorities do not accept the data from our or BMS’s U.S. clinical trials, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt the development of a product candidate.

The development and commercialization of biologic products is subject to extensive regulation, and we may not obtain regulatory approvals for any of our product candidates.

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing and distribution and other possible activities relating to ALD403, Clazakizumab and any other product candidate that we may develop in the future are subject to extensive regulation in the United States. Biologics, like ALD403 and Clazakizumab, require the submission of a Biologics License Application, or BLA, to the FDA and such product candidates are not permitted to be marketed in the United States until approval from the FDA of a BLA for that product has been obtained. A BLA must be supported by extensive preclinical and clinical data, as well as extensive information regarding chemistry, manufacturing and controls, or CMC, sufficient to demonstrate the safety, purity, potency and effectiveness of the applicable product candidate to the satisfaction of the FDA. We have not submitted an application for

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approval or obtained FDA approval for any product. This lack of experience may impede our ability to obtain FDA approval in a timely manner, if at all, for ALD403 and our future product candidates.

Regulatory approval of a BLA is not guaranteed, and the approval process is an expensive and uncertain process that may take several years. The FDA and foreign regulatory entities also have substantial discretion in the approval process. The number and types of preclinical studies and clinical trials that will be required for BLA approval varies depending on the product candidate, the disease or the condition that the product candidate is designed to target and the regulations applicable to any particular product candidate. Despite the time and expense associated with preclinical studies and clinical trials, failure can occur at any stage, and we could encounter problems that require us to repeat or perform additional preclinical studies or clinical trials or generate additional CMC data. The FDA and similar foreign authorities could delay, limit or deny approval of a product candidate for many reasons, including because they:

• may not deem the product candidate to be adequately safe or effective;

• may not find the data from preclinical studies, clinical trials or CMC data to be sufficient to support a claim of safety and efficacy;

• may not approve the manufacturing processes or facilities associated with the product candidate;

• may conclude that the long-term stability of the formulation of the drug product for which approval is being sought has been sufficiently demonstrated;

• may change approval policies or adopt new regulations; or

• may not accept a submission due to, among other reasons, the content or formatting of the submission.

To market any biologics outside of the United States, we, BMS and future collaborators must comply with the numerous and varying regulatory and compliance related requirements of other countries. Approval procedures vary among countries and can involve additional product testing and additional administrative review periods, including obtaining reimbursement and pricing approval in select markets. The time required to obtain approval in other countries might differ from that required to obtain FDA approval. The regulatory approval process in other countries may include all of the risks associated with FDA approval as well as additional, presently unanticipated, risks. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others, including the risk that our product candidates may not be approved for all indications requested and that such approval may be subject to limitations on the indicated uses for which the product may be marketed.

We face substantial competition, and others may discover, develop or commercialize products before or more successfully than we do.

The development and commercialization of new therapeutic products is highly competitive. We face competition with respect to our current product candidates, and will face competition with respect to product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of biosimilar products, which are expected to become available over the coming years. For example, if approved, we expect that by the time Clazakizumab enters the marketplace, there may be several anti-TNF biosimilars on the marketplace. The entry of such products could potentially put pricing pressure on Clazakizumab. In addition, many of our competitors are large pharmaceutical companies that have a greater ability to reduce prices for their competing drugs in an effort to maintain or gain market share and undermine the value proposition that drugs commercialized by us might otherwise be able to offer to payors.

Potential competitors also include academic institutions, government agencies and other public and private organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. Many of these competitors are attempting to develop therapeutics for our target indications.

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BMS is currently developing Clazakizumab for the treatment of the autoimmune disorders rheumatoid arthritis, or RA, and psoriatic arthritis, or PsA. Several large pharmaceutical and biotechnology companies currently market and sell biologics for the treatment of RA, including BMS’s Orencia. The current standard of care for the treatment of RA after the immunosuppressive drug methotrexate, or MTX, is biologic therapy. Currently the market for biologic therapy is dominated by anti-TNFs, primarily Humira and Enbrel. In addition, there are several other agents currently in development, including monoclonal antibody therapies that modulate IL-6-biology and other oral medications. As a result, BMS may face difficulties in marketing Clazakizumab in this competitive market.

Currently in the United States, there are relatively few medications approved for the prevention of high frequency migraines. Most of the medications used today are generics that are prescribed for abortive treatment of migraines. Botox is approved for the prevention of chronic migraine but is also prescribed for high frequency migraine. There are also several other companies, including Amgen, Lilly and Labrys, that have ongoing clinical trials for CGRP blocking therapies using monoclonal antibodies similar to ALD403. Other companies may be in later stages of development than we are or may progress their product candidates through clinical trials faster than our product candidates and, therefore, may obtain FDA or other regulatory approval for their products before we obtain approval for ours. For example, we are aware that Amgen has initiated its Phase 2b clinical trial and may be able to initiate Phase 3 clinical trials as early as 2015.

Many of our competitors, including a number of large pharmaceutical companies that compete directly with us, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Our competitors may develop products that are more effective, safer, more convenient or less costly than any that we are developing or that would render our product candidates obsolete or non-competitive. It is possible that our competitors might get FDA or other regulatory approval for their products before us. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient enrollment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Delays in the enrollment of patients in our clinical trials could increase our development costs and delay completion of the trial and delays in enrollment of patients in our collaborators’ clinical trials could delay completion of our collaborators’ trials.

We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or other regulatory authorities. Even if we are able to enroll a sufficient number of patients in our clinical trials, if the pace of enrollment is slower than we expect, the development costs for our product candidates may increase and the completion of our trials may be delayed or our trials could become too expensive to complete.

For example, our planned Phase 2b clinical trial for ALD403 is expected to enroll approximately 750 patients at more than 40 sites throughout the world. We have never previously conducted a trial of this magnitude and can provide no assurance that we will be able to enroll patients at a sufficient pace to complete the clinical trial within our projected time frame. Completing future migraine trials will require us to continue to activate new clinical trial sites and to enroll patients at forecasted rates at both new and existing clinical trial sites. Our forecasts regarding the rates of clinical site activation and patient enrollment at those sites are based on a number of assumptions, including assumptions based on experience with our last ALD403 clinical trial. However, there can be no assurance that those forecasts will be accurate or that we will complete, following collection of six month data, our next ALD403 trial on schedule. We anticipate completion in the first half of 2015. During the initial months of this planned clinical trial, the number of clinical sites activated and the number of patients enrolled at each clinical site per month could be lower than we have forecasted and, as a result, we might need to make a number of adjustments to the clinical trial plan, including increasing the number of clinical trial sites. We

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can provide no assurance that those adjustments will be sufficient to enable us to complete the study within our anticipated time frame. If we experience delays in enrollment, our ability to complete the study could be materially adversely affected.

In addition, we expect BMS will need to enroll over 1,000 patients at numerous sites throughout the world to complete the multiple Phase 3 trials that would be required by the FDA for approval of Clazakizumab in RA. There can be no assurance that BMS will commit the resources required to activate the number of trial sites, and enroll the number of patients, required to complete these Phase 3 trials in a timely manner or at all. Even if BMS commits significant resources to activating sites and enrolling RA patients, the pace of enrollment could be adversely affected by competition with other trials enrolling RA patients. A slower pace of enrollment could increase the development costs for Clazakizumab which could adversely affect BMS’s commitment to developing Clazakizumab in RA, or at all.

If serious adverse side-effects are identified during the development of any of our product candidates, we or our collaborators may need to abandon development of that product candidate.

Our lead product candidates are still in clinical development and their risk of failure is high. It is impossible to predict when or if any of our product candidates will prove effective and safe enough to receive regulatory approval. To date, the safety profile observed in the Clazakizumab trials have been consistent with other previously approved anti-IL-6 inhibitors. The most frequent serious adverse events, or SAEs, for Clazakizumab were serious infections. Additionally, patients in clinical trials for Clazakizumab exhibited increases in mean total cholesterol without changes in HDL/LDL ratio, increases in hemoglobin, increases in liver function tests and decreases in neutrophils, a type of white blood cell, and platelets, which are expected from IL-6 inhibition.

With respect to ALD403, while we have observed few SAEs to date, ALD403 has only been evaluated in a limited number of patients. The observed SAEs to date include inguinal hernia, kidney infection, transient ischemic attack, which is a precursor to stroke, conversion disorder, which is a mental health condition in which a person has blindness, paralysis, or other nervous system symptoms that cannot be explained by medical evaluation, chest pain, shortness of breath and wound infection. Each of these events was observed a single time in the ALD403 trial, with no one patient exhibiting more than one SAE. The clinical investigator concluded that all of these events were found to be unrelated to ALD403.

There can be no assurance that our planned trials for ALD403 will not fail due to safety issues. In such an event, we might need to abandon development of ALD403. Clazakizumab may also fail due to safety issues, causing BMS to cease development.

The manufacture of our product candidates is complex and we may encounter difficulties in production. If we or any of our third-party manufacturers encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped.

The process of manufacturing our products is complex, highly-regulated and subject to multiple risks. The manufacture of biologics involves complex processes, including developing cells or cell systems to produce the biologic, growing large quantities of such cells and harvesting and purifying the biologic produced by them. As a result, the cost to manufacture biologics is generally far higher than traditional small molecule chemical compounds, and the biologics manufacturing process is less reliable and is difficult to reproduce. Manufacturing biologics, such as Clazakizumab and ALD403, is highly susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We utilize third-party contract manufacturers to produce ALD403 and BMS currently also uses third-party contract manufacturers to produce Clazakizumab using our proprietary yeast production technology.

The manufacturing facilities in which our product candidates are made could be adversely affected by equipment failures, labor shortages, natural disasters, power failures and numerous other factors. There are risks associated with scaling-up manufacturing to commercial scale including, among others, cost overruns, potential

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problems with process scale-up, process reproducibility, stability issues, lot consistency and timely availability of raw materials. Even if we or our collaborators obtain regulatory approval for any of our product candidates, there is no assurance that manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product or to meet potential future demand. If our or our collaborators’ manufacturers are unable to produce sufficient quantities of an approved product for commercialization, commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

ALD403 is currently produced for us by a third-party contract manufacturer using a small-scale process that would not support commercialization of ALD403. We are in the process of transferring our manufacturing processes to this manufacturer. Scaling up a biologic manufacturing process is a difficult and uncertain task, and we may not be successful in transferring our production system or the manufacturer may not have the necessary capabilities to complete the implementation and development process. If we are unable to adequately validate or scale-up the manufacturing process for ALD403 with our current manufacturer, we will need to transfer to another manufacturer and complete the manufacturing validation process, which can be lengthy. If we are able to adequately validate and scale-up the manufacturing process for ALD403 or other product candidates with a contract manufacturer, we will still need to negotiate with such contract manufacture an agreement for commercial supply and it is not certain we will be able to come to agreement on terms acceptable to us.

Even though Clazakizumab has been administered to over 1,000 patients, the MabXpress production system is a non-traditional antibody production platform and as BMS produces product in commercial quantities, BMS may experience unforeseen safety or other manufacturing issues which would adversely affect the commercialization of Clazakizumab.

Even if our product candidates receive regulatory approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success.

If any of our product candidates receive regulatory approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors and others in the medical community. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including the following:

• the efficacy and potential advantages compared to alternative treatments;

• the prevalence and severity of any side-effects;

• the price we or our collaborators charge for our products;

• the availability of third-party coverage or reimbursement;

• the convenience and ease of administration compared to alternative treatments;

• the willingness of the target patient population to try new therapies and of physicians to prescribe these new therapies; and

• the size and effectiveness of our sales, marketing and distribution support.

If our product candidates are approved and do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable on a sustained basis.

We currently have no sales or distribution personnel or infrastructure and only limited marketing capabilities. If we are unable to develop a sales, marketing and distribution infrastructure on our own or through collaborations or other marketing arrangements, we will not be successful in commercializing ALD403 or other future products.

We do not currently have sales or distribution capabilities and have limited experience in the sale, marketing and distribution of therapeutic products. To achieve commercial success for any approved product, we must

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either develop a sales and marketing organization or outsource these functions to third parties. We plan to establish a sales force in the United States targeting high-prescribing neurologists and headache centers and work with collaborators in international markets to commercialize ALD403 globally, if it is approved.

There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time-consuming and could delay any product launch. If the commercial launch of a product for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we do not have another product to sell in the same specialty market.

We also may not be successful entering into arrangements with third parties to sell and market our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively and could damage our reputation. If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.

If we are able to commercialize any product candidates, the products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby harming our business.

The regulations that govern marketing approvals, pricing and reimbursement for new therapeutic products vary widely from country to country. Some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we or our collaborators might obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of the product and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in our products, even if our product candidates obtain regulatory approval.

Our and our collaborators’ ability to commercialize any products successfully also will depend in part on the extent to which reimbursement for these products and related treatments becomes available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. The primary focus in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and these third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product that we or our collaborators commercialize and, if reimbursement is available, what the level of reimbursement will be. Reimbursement may impact the demand for, or the price of, any product for which we or our collaborators obtain approval. Obtaining reimbursement for our products may be particularly difficult because of the higher prices often associated with products administered under the supervision of a physician. If reimbursement is not available or is available only to limited levels, we or our collaborators may not be able to successfully commercialize any product that has been approved.

There may be significant delays in obtaining reimbursement for approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA or regulatory authorities in other countries. Moreover, eligibility for reimbursement does not imply that any product will be paid for in all cases or at a rate that covers our or our collaborators’ costs, including research, development, manufacture, sale and distribution. Interim payments for new products, if applicable, may also not be sufficient to cover our or our collaborators’ costs and may not be made permanent. Payment rates may vary according to the use of the product

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and the clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated into existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our or our collaborators’ inability to promptly obtain coverage and profitable payment rates from both government funded and private payors for newly developed products could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

We may not be successful in our efforts to use and enhance our proprietary antibody platform to create a pipeline of product candidates and develop commercially successful products.

We are using our proprietary antibody platform for the selection and manufacturing of monoclonal antibodies. We used this platform to create our two lead product candidates, Clazakizumab and ALD403, as well as the other future product candidates that we are currently evaluating. We are at an early stage of development and our platform has not yet, and may never, lead to approved or commercially successful products. Even if we are successful in continuing to build our pipeline, the future product candidates that we evaluate may not be suitable for clinical development, including as a result of their harmful side-effects, limited efficacy or other characteristics that make it unlikely such product candidates will receive regulatory approval or achieve commercial success. If we do not successfully develop and commercialize product candidates using our proprietary antibody platform, we may not be able to obtain product or collaboration revenues in future periods, which would harm our business and prospects.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

• decreased demand for any product candidates or products that we or our collaborators may develop;

• injury to our reputation and significant negative media attention;

• withdrawal of patients from clinical trials or cancellation of trials;

• significant costs to defend the related litigation;

• substantial monetary awards;

• loss of revenues; and

• the inability to commercialize any products that we may develop.

We currently have $20 million in product liability insurance coverage for our clinical trials, which may not be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

We may expend our limited resources to pursue a particular product candidate or disease and fail to capitalize on product candidates or diseases that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus our research programs and product candidates for a specific disease. As a result, we may forego or delay pursuit of opportunities with other product

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candidates or other diseases that may later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific diseases may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential for a particular product candidate in the right disease, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to retain sole development and commercialization rights.

We are dependent on BMS for the successful development and commercialization of Clazakizumab for the treatment of RA and other diseases. If BMS does not devote sufficient resources to Clazakizumab’s development, is unsuccessful in its efforts, or chooses to terminate its agreement with us, our business, operating results and financial condition will be seriously harmed.

We have entered into a collaboration agreement with BMS to develop and commercialize Clazakizumab. Pursuant to the BMS agreement, responsibility for all clinical and other product development activities and for manufacturing Clazakizumab outside of cancer has been transferred to BMS.

BMS is currently developing Clazakizumab for the treatment of RA and PsA. Should we disagree with BMS about the clinical development or commercialization strategy it employs, we have no rights to impose our clinical development or commercialization strategy on BMS. Similarly, BMS may decide to seek regulatory approval for, and limit commercialization of Clazakizumab, to narrower indications than we would pursue. Unless the collaboration with BMS is terminated, we are not allowed to develop Clazakizumab or any other compound that binds to IL-6 ourself for any indication except cancer. The BMS collaboration may not be clinically or commercially successful due to a number of important factors, including the following:

• Subject to the terms of our collaboration agreement, BMS has wide discretion in determining the efforts and resources that it will apply to its partnership with us. The timing and amount of any development milestones, and downstream commercial milestones and royalties that we may receive under such partnership will depend on, among other things, the efforts, allocation of resources and successful development and commercialization of Clazakizumab.

• BMS may select a dose for Clazakizumab that does not have a favorable benefit/risk profile.

• BMS may develop and commercialize, either alone or with others, products that are similar to or competitive with Clazakizumab.

• BMS’s commercialization of Clazakizumab may be affected by other products, such as Orencia, that BMS currently markets for RA.

• BMS may terminate its partnership with us without cause and for circumstances outside of our control, which could make it difficult for us to attract new strategic partners or adversely affect how we are perceived in scientific and financial communities.

• BMS may develop or commercialize Clazakizumab in a way that exposes us to potential litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential liability.

• BMS may not comply with all applicable regulatory requirements, or fail to report safety data in accordance with all applicable regulatory requirements, which may or may not be related to Clazakizumab.

If BMS were to breach our collaboration agreement, we may need to enforce our rights under the agreement, which could be costly. If we were to terminate our agreement with BMS due to BMS’s breach or if BMS were to terminate the agreement without cause, there could be a delay in the return of our rights to Clazakizumab and the development and commercialization of Clazakizumab would be delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities to continue development and commercialization on our own.

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BMS may enter into one or more transactions with third parties, including a merger, consolidation, reorganization, sale of substantial assets, sale of substantial stock or other change in control, which could divert the attention of its management and adversely affect BMS’s ability to retain and motivate key personnel who are important to the continued development of the Clazakizumab program. In addition, the third party to any such transaction could reprioritize BMS’s development programs which could delay or cease the development of our programs or cause BMS to terminate the agreement.

If we do not successfully enter into future collaborations for the development and commercialization of product candidates in international markets our business may be harmed.

We may choose to enter into collaboration agreements with third parties with respect to our product candidates, including ALD403, for their development and commercialization in international markets. We will have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend in part on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

Collaborations involving our product candidates, such as our collaboration with BMS, are subject to numerous risks, which may include the following:

• collaborators have significant discretion in determining the efforts and resources that they will apply to a collaborations;

• collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

• collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

• collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates;

• a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution;

• collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

• disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources;

• collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and

• collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.

Any termination or disruption of any future collaboration could result in delayed development of product candidates, increased cost to develop product candidates or terminated of development of a product candidate.

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We rely on third parties to conduct and support our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

We do not independently conduct clinical trials for our product candidates. We rely on third parties, such as contract research organizations, or CROs, clinical data management organizations, medical institutions and clinical investigators, to perform this function. Our reliance on these third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities. Furthermore, some of the sites for our clinical trials are outside the United States. The performance of these sites may be adversely affected by various issues, including less advanced medical infrastructure, lack of familiarity with conducting clinical trials in accordance with U.S. standards, insufficient training of personnel, communication difficulties or change in local regulations. We remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the study. Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, or GCP, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of patients in clinical trials are protected. Furthermore, these third parties may also have relationships with other entities, including our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our products.

We also rely on other third parties to store and distribute supplies for our clinical trials. Any performance failure on the part of our existing or future distributors could delay clinical development or regulatory approval of our product candidates or commercialization of our products, producing additional losses and depriving us of potential product revenues.

We rely on third-party contract manufacturing organizations, or CMOs, to manufacture and supply our product candidate, ALD403. If one of our suppliers or manufacturers fails to perform adequately or fulfill our needs, we may be required to incur significant costs and devote significant efforts to find new suppliers or manufacturers and may also face delays in the development and commercialization of our product candidates.

We currently do not own manufacturing facilities for clinical-scale manufacturing of our product candidates and we rely upon third-party CMOs to manufacture and supply drug product for our clinical trials. The manufacture of pharmaceutical products in compliance with the FDA’s current good manufacturing practices, or cGMP, requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, including difficulties with production costs and yields, quality control, including stability of the product candidate and quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced cGMP requirements, other federal and state regulatory requirements and foreign regulations. If our manufacturers were to encounter any of these difficulties or otherwise fail to comply with their obligations to us or under applicable regulations, our ability to provide study drugs in our clinical trials would be jeopardized. Any delay or interruption in the supply of clinical trial materials could delay the completion of our clinical trials, increase the costs associated with maintaining our clinical trial programs and, depending upon the period of delay, require us to commence new trials at significant additional expense or terminate the trials completely.

All manufacturers of our product candidates must comply with cGMP requirements enforced by the FDA through its facilities inspection program. These requirements include, among other things, quality control, quality assurance and the maintenance of records and documentation. Manufacturers of our product candidates may be unable to comply with these cGMP requirements and with other FDA, state and foreign regulatory requirements. The FDA or similar foreign regulatory agencies may also implement new standards at any time, or change their interpretation and enforcement of existing standards for manufacture, packaging or testing of products. We have little control over our manufacturers’ compliance with these regulations and standards. A failure to comply with these requirements may result in fines and civil penalties, suspension of production, suspension or delay in

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product approval, product seizure or recall or withdrawal of product approval. If the safety of any product supplied is compromised due to our manufacturers’ failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for or successfully commercialize our products and we may be held liable for any injuries sustained as a result. Any of these factors could cause a delay of clinical trials, regulatory submissions, approvals or commercialization of our product candidates, entail higher costs or impair our reputation.

We currently rely on Fujifilm Diosynth Biotechnologies and Ajinomoto Althea Inc. to manufacture and provide us with clinical supplies of ALD403. Our agreements do not provide for an entire supply of the drug product necessary for all anticipated clinical trials or for full-scale commercialization. If we and our suppliers cannot agree to the terms and conditions for provision of the drug product necessary for our clinical and commercial supply needs, or if either terminates their agreement in response to a breach by us or otherwise becomes unable to fulfill its supply obligations, our clinical trials could be delayed until a qualified alternative supplier is identified, the manufacturing process is qualified and validated and we have agreed on the terms and conditions for such alternative supplier to supply product for us, which would delay the development and impair the commercialization of ALD403. ALD403 is a biologic and therefore requires a complex production process. Transferring the production process to a new manufacturer would be particularly difficult, time-consuming and expensive and may not yield comparable product. Although alternative sources of supply exist, the number of third-party suppliers with the necessary manufacturing and regulatory expertise and facilities necessary to manufacture ALD403 and any other product candidates we may develop is limited, and may be expensive and take a significant amount of time to arrange for alternative suppliers. New suppliers of any product candidate would be required to qualify under applicable regulatory requirements. Obtaining the necessary FDA approvals or other qualifications under applicable regulatory requirements could result in a significant interruption of supply and could require the new manufacturer to bear significant additional costs which may be passed on to us.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance.

Our quarterly and annual operating results have fluctuated in the past and may fluctuate significantly in the future, which makes it difficult for us to predict our future operating results. From time to time, we may enter into collaboration agreements with other companies that include development funding and significant upfront and milestone payments, and we expect that amounts earned from our collaboration agreements will continue to be an important source of our revenues. Accordingly, our revenues will depend on development funding and the achievement of development and clinical milestones under our existing collaboration arrangements, as well as any potential future collaboration and license agreements and sales of our products, if approved. These upfront and milestone payments may vary significantly from period to period and any such variance could cause a significant fluctuation in our operating results from one period to the next.

Our operating results may fluctuate due to a variety of other factors, many of which are outside of our control and may be difficult to predict, including the following:

• the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time;

• the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers;

• expenditures that we will or may incur to acquire or develop additional product candidates and technologies;

• the level of demand for our product candidates, should they receive approval, which may vary significantly;

• future accounting pronouncements or changes in our accounting policies;

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• the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; and

• the risk/benefit profile, cost and reimbursement policies with respect to our products candidates, if approved, and existing and potential future drugs that compete with our product candidates.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenues or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated revenues or earnings guidance we may provide.

Our future success depends on our ability to retain our senior executive officers and other key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on our senior executive officer and the other principal members of our executive and scientific teams, particularly our President and Chief Executive Officer, Randall C. Schatzman, our Chief Scientific Officer, John A. Latham, our Chief Business Officer, Mark J. Litton, our Senior Vice President Translational Medicine, Jeffrey T.L. Smith, and our Senior Vice President, Finance, Larry K. Benedict. The employment of our executive officers is at-will and our executive officers may terminate their employment with us at any time. The loss of the services of any of our senior executive officers could impede the achievement of our research, development and commercialization objectives. Although we maintain “key person” insurance for Drs. Schatzman, Latham, Litton and Smith, any insurance proceeds we may receive under our “key person” insurance would not adequately compensate us for the loss of their services.

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel is also critical to our success. We may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. Although, to date, we have not experienced problems attracting and retaining highly qualified personnel, our industry has experienced a high rate of turnover of management personnel in recent years. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by third parties and have commitments under consulting or advisory contracts with other entities that may limit their availability to us.

We expect to expand our development, regulatory affairs, sales and marketing and other capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

As of December 31, 2013, we had 77 employees. Over the next several years, if our product candidates receive marketing approval, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs, sales and marketing and other functional areas, including finance, accounting and legal. For example, if ALD403 is approved, we plan to build a 75 to 100 person sales force targeting high-prescribing neurologists and headache centers in the United States. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

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If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous materials.

In addition, we may be required to incur substantial costs to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may divert resources away from our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Business disruptions could harm our future revenues and financial condition and increase our costs and expenses.

Our operations could be subject to earthquakes, power shortages, telecommunications failures, floods, hurricanes, fires, extreme weather conditions, medical epidemics and other natural or manmade disasters or business interruptions. The occurrence of any of these business disruptions could harm our operations and financial condition and increase our costs and expenses. Our corporate headquarters is located in Washington and certain clinical sites for our product candidates, operations of our existing and future partners and suppliers are or will be located in Washington near major earthquake faults. The ultimate impact on us, our significant partners, suppliers and our general infrastructure of being located near major earthquake faults and being consolidated in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major earthquake or other natural or manmade disaster.

Marketing approval of our product candidates in international markets will subject us to additional costs and a variety of risks associated with international operations.

We intend to pursue marketing approvals for our product candidates in international markets directly or with partners and will be subject to additional costs and additional risks related to international operations, including:

• different regulatory requirements for drug approvals in foreign countries;

• reduced protection for intellectual property rights;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

• economic weakness, including inflation or political instability in particular foreign economies and markets;

• compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

• foreign taxes, including withholding of payroll taxes;

• foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

• workforce uncertainty in countries where labor unrest is more common than in the United States;

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• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

• business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.

Our ability to use our net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.

As of December 31, 2013, we had U.S. net operating loss carryforwards, or NOLs, of $87.8 million, which may be used to offset future taxable income or offset income taxes due. In addition, we have U.S. research and development tax credit carryforwards of $4.7 million. These NOLs and tax credit carryforwards expire in various years beginning in 2024, if not utilized. Utilization of the NOLs and tax credit carryforwards may be subject to an annual limitation due to historical or future ownership change rules pursuant to Sections 382 and 383 of the Internal Revenue Code. We performed a section 382 ownership analysis through 2009 and determined that an ownership change occurred in 2005. Based on the analysis performed, however, we do not believe that the Section 382 annual limitation will impact our ability to utilize the tax attributes that existed as of the date of the ownership change in a material manner. We have not completed a study to determine the impact of this initial public offering, the impact of our private placement in 2012 or the impact of other transactions which have occurred since the 2009 analysis, on our NOLs and tax credit carryforwards under Sections 382 and 383 of the Code. If we have experienced an ownership change in the past or will experience an ownership change in connection with this offering or as a result of future changes in our stock ownership, some of which changes are outside our control, the tax benefits related to the NOLs and tax credit carryforwards may be further limited or lost.

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

Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.

We may engage in future acquisitions that increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.

We may evaluate various strategic transactions, including licensing or acquiring complementary products, technologies or businesses. Any potential acquisitions may entail numerous risks, including increased operating expenses and cash requirements, assimilation of operations and products, retention of key employees, diversion of our management’s attention and uncertainties in our ability to maintain key business relationships of the acquired entities. In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.

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Risks Related to Intellectual Property

If we fail to comply with our obligations in our intellectual property licenses with third parties, we could lose license rights that are important to our business.

We are a party to intellectual property license agreements with third parties. For example, we have a third-party royalty free license associated with the Keck Graduate Institute for MabXpress, our yeast-based proprietary manufacturing technology. We may enter into additional license agreements in the future. Our existing license agreements impose, and we expect that our future license agreements will impose, various diligence, royalty payment, milestone payment, insurance and other obligations on us. If we fail to comply with these obligations our other obligations in our license agreements, our licensors may have the right to terminate these agreements, in which event we may not be able to develop and market any product or use any platform technology that is covered by these agreements. Termination of these licenses or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable terms or our not having sufficient intellectual property rights to operate our business. The occurrence of such events could materially harm our business.

Our ability to successfully commercialize our products may be impaired if we are unable to obtain and maintain effective intellectual property rights for our proprietary antibody platform and product candidates.

Our success depends in large part on our and our licensors’ ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary antibody platform and products. In some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents or enforce the patents, covering technology or products that we license from third parties. Therefore, we cannot be certain that these patents and applications will be prosecuted and enforced in a manner consistent with the best interests of our business. In addition, if third parties who license patents to us fail to maintain such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated. Because certain intellectual property rights are shared between us and our collaborators, it is possible that disputes may arise related to the distribution of those rights.

We have sought to protect our proprietary position by filing patent applications in the United States and abroad related to our novel technologies and products that are important to our business. This process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The standards that the United States Patent and Trademark Office, or USPTO, uses to grant patents are not always applied predictably or uniformly and can change. Consequently, we cannot be certain as to whether pending patent applications will be allowed; and if allowed, we cannot be certain as to the type and extent of patent claims that will be issued to us in the future. Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from using our technologies or from developing competing products and technologies. Under our collaboration agreement with BMS, we are obligated to use commercially reasonable efforts to file and prosecute patent applications, and maintain patents, covering Clazakizumab in specified jurisdictions, and the U.S. patent rights are exclusively licensed to BMS and the non-U.S. patent rights are jointly owned by us and BMS.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal and factual questions for which legal principles remain unresolved. In recent years patent rights have been the subject of significant litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our and our licensors’ patent rights are highly uncertain. Our and our licensors’ pending and future patent applications may not result in patents being issued which protect our technology or products or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other

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jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in our owned and licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.

In March 2013, the United States converted to a first-to-file patent system under the recently enacted America Invents Act. With this change, the United States patent system was brought into closer conformity with the patent systems of other countries, the vast majority of which operate as first-to-file patent systems. Under the former system, and assuming the other requirements for patentability were met, the first to conceive of the claimed invention was entitled to the patent. A number of our patents and patent applications are subject to the first-to-invent system because they originated prior to the March 2013 cutoff. Under the new United States system, and outside the United States, the first to file a patent application is entitled to the patent, with certain exceptions. A number of our patents and patent applications are subject to the new first-to-file system in the United States because they originated after the March 2013 cutoff. The full effect of these changes remains unclear as the USPTO endeavors to implement various regulations concerning the new system. Furthermore, the courts have yet to address the vast majority of these provisions and the applicability of the America Invents Act and new regulations on specific patents discussed herein have not been determined and would need to be reviewed. We may become involved in opposition, interference, or derivation proceedings challenging our patent rights or the patent rights of others, and the outcome of any proceedings are highly uncertain. An adverse determination in any such proceeding could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.

Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner. The issuance of a patent is not conclusive as to its scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time required for the development, testing and regulatory review of future product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours or otherwise provide us with a competitive advantage.

We may become involved in lawsuits to protect or enforce our patents, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe our patents. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. The standards that courts use to interpret patents are not always applied predictably or uniformly and can change, particularly as new technologies develop. As a result, we cannot predict with certainty how much protection, if any, will be given to our patents if we attempt to enforce them and they are challenged in court. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. Inequitable conduct is frequently raised as a defense during intellectual property litigation. It is believed that all parties involved in the prosecution of our patent applications have complied with their duties of disclosure in the course of prosecuting our patent applications, however, it is possible that legal claims to the contrary could be asserted if we were engaged in intellectual property litigation, and the results of any such legal

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claims are uncertain due to the inherent uncertainty of litigation. If a court determines that any party involved in the prosecution of our patents failed to comply with their duty of disclosure, the subject patent would be unenforceable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business.

Third parties may assert infringement claims against us, or other parties we have agreed to indemnify, based on existing patents or patents that may be granted in the future. We are aware of third-party patents and patent applications containing granted claims relating to CGRP antibodies and the therapeutic use of CGRP antibodies to treat conditions including migraine. Furthermore, since patent applications are published some time after filing, and because applications can take several years to issue, there may be additional currently pending third-party patent applications that are unknown to us, which may later result in issued patents. Because of the inevitable uncertainty in intellectual property litigation, we could lose a patent infringement action asserted against us regardless of our perception of the merits of the case. If we are found to infringe upon a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and commercializing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, in any such proceeding or litigation, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations.

We may be unable to protect the confidentiality of our trade secrets, thus harming our business and competitive position.

In addition to our patented technology and products, we rely upon trade secrets, including unpatented know-how, technology and other proprietary information to develop and maintain our competitive position, which we seek to protect, in part, by confidentiality agreements with our employees, collaborators and consultants. We also have agreements with our employees and selected consultants that obligate them to assign their inventions to us. However, it is possible that technology relevant to our business will be independently developed by a person that is not a party to such an agreement. Furthermore, if the employees, consultants or collaborators that are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets through such breaches or violations. Furthermore, our trade secrets could be disclosed, misappropriated or otherwise become known or be independently discovered by our competitors. Our trade secrets can be lost through their inadvertent or advertent disclosure to others. In addition, intellectual property laws in foreign countries may not protect our intellectual property to the same extent as the laws of the United States. If our trade secrets are disclosed or misappropriated, it would harm our ability to protect our rights and harm our business.

We may be subject to claims that our employees have wrongfully used or disclosed intellectual property of their former employers. Intellectual property litigation or proceedings could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable

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intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could impair our ability to compete in the marketplace.

Risks Related to Government Regulation

The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaboration partner from obtaining approvals for the commercialization of some or all of our product candidates.

The research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug products are subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, which regulations differ from country to country. Neither we nor our collaboration partner is permitted to market our product candidates in the United States until we receive approval of a BLA from the FDA. Neither we nor our collaboration partner have submitted an application or received marketing approval for any of our product candidates. Obtaining approval of BLA can be a lengthy, expensive and uncertain process. In addition, failure to comply with FDA and other applicable U.S. and foreign regulatory requirements may subject us to administrative or judicially imposed sanctions, including the following:

• warning letters;

• civil or criminal penalties and fines;

• injunctions;

• suspension or withdrawal of regulatory approval;

• suspension of any ongoing clinical trials;

• voluntary or mandatory product recalls and publicity requirements;

• refusal to accept or approve applications for marketing approval of new drugs or biologics or supplements to approved applications filed by us;

• restrictions on operations, including costly new manufacturing requirements; or

• seizure or detention of our products or import bans.

Prior to receiving approval to commercialize any of our product candidates in the United States or abroad, we and our collaboration partner must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA and other regulatory authorities abroad, that such product candidates are safe and effective for their intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if we and our collaboration partner believe the preclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. Administering any of our product candidates to humans may produce undesirable side-effects, which could interrupt, delay or cause suspension of clinical trials of our product candidates and result in the FDA or other regulatory authorities denying approval of our product candidates for any or all targeted indications.

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Regulatory approval of BLA is not guaranteed, and the approval process is expensive and may take several years. The FDA also has substantial discretion in the approval process. Despite the time and expense exerted, failure can occur at any stage, and we could encounter problems that cause us to abandon or repeat clinical trials, or perform additional preclinical studies and clinical trials. The number of preclinical studies and clinical trials that will be required for FDA approval varies depending on the product candidate, the disease or condition that the product candidate is designed to address and the regulations applicable to any particular product candidate. The FDA can delay, limit or deny approval of a product candidate for many reasons, including, but not limited to, the following:

• a product candidate may not be deemed safe or effective;

• FDA officials may not find the data from preclinical studies and clinical trials sufficient;

• the FDA might not approve our or our third-party manufacturers’ processes or facilities; or

• the FDA may change its approval policies or adopt new regulations.

If any of our product candidates fails to demonstrate safety and efficacy in clinical trials or does not gain regulatory approval, our business will be harmed.

Even if we receive regulatory approval for a product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements.

Once regulatory approval has been granted, the approved product and its manufacturer are subject to continual review by the FDA and/or non-U.S. regulatory authorities. Any regulatory approval that we or our collaboration partners receive for our product candidates may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for potentially costly post-marketing follow-up trials to monitor the safety and efficacy of the product. In addition, if the FDA and/or non-U.S. regulatory authorities approve any of our product candidates, we will be subject to extensive and ongoing regulatory requirements by the FDA and other regulatory authorities with regard to the labeling, packaging, adverse event reporting, storage, advertising, promotion and recordkeeping for our products. In addition, manufacturers of our drug products are required to comply with cGMP regulations, which include requirements related to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Furthermore, regulatory authorities must approve these manufacturing facilities before they can be used to manufacture our drug products, and these facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations. If we or a third party discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturer or us, including requiring withdrawal of the product from the market or suspension of manufacturing. If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with regulatory requirements of the FDA and/or other non-U.S. regulatory authorities, we could be subject to administrative or judicially imposed sanctions, including the following:

• warning letters;

• civil or criminal penalties and fines;

• injunctions;

• suspension or withdrawal of regulatory approval;

• suspension of any ongoing clinical trials;

• voluntary or mandatory product recalls and publicity requirements;

• refusal to approve pending applications for marketing approval of new drugs or supplements to approved applications filed by us;

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• restrictions on operations, including costly new manufacturing requirements; or

• seizure or detention of our products or import bans.

The regulatory requirements and policies may change and additional government regulations may be enacted for which we may also be required to comply. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or in other countries. If we are not able to maintain regulatory compliance, we may not be permitted to market our future products and our business may suffer.

Failure to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our products internationally.

We may seek a distribution and marketing partner for ALD403 outside the United States and may market future products in international markets. In order to market our future products in the European Economic Area, or EEA, and many other foreign jurisdictions, we must obtain separate regulatory approvals. Specifically, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA.

Before granting the MA, the European Medicines Agency, or EMA, or the competent authorities of the member states of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

We have had limited interactions with foreign regulatory authorities, and the approval procedures vary among countries and can involve additional clinical testing, and the time required to obtain approval may differ from that required to obtain FDA approval. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign countries or by the FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at all. We may not be able to file for regulatory approvals and even if we file we may not receive necessary approvals to commercialize our products in any market.

Healthcare reform measures could hinder or prevent our product candidates’ commercial success.

In the United States, there have been and we expect there will continue to be a number of legislative and regulatory changes to the healthcare system in ways that could affect our future revenues and profitability and the future revenues and profitability of our potential customers. Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services. For example, one of the most significant healthcare reform measures in decades, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, collectively, the PPACA, was enacted in 2010. The PPACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement changes and fraud and abuse measures, all of which will impact existing government healthcare programs and will result in the development of new programs. The PPACA, among other things:

• imposes a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs,” effective 2011;

• increases the minimum level of Medicaid rebates payable by manufacturers of brand-name drugs from 15.1% to 23.1%;

• requires collection of rebates for drugs paid by Medicaid managed care organizations;

• requires manufacturers to participate in a coverage gap discount program, under which they must agree to offer 50% point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D, beginning January 2011; and

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• creates a process for approval of biologic therapies that are similar or identical to approved biologics.

While the U.S. Supreme Court upheld the constitutionality of most elements of the PPACA in June 2012, other legal challenges are still pending final adjudication in several jurisdictions. In addition, Congress has also proposed a number of legislative initiatives, including possible repeal of the PPACA. At this time, it remains unclear whether there will be any changes made to the PPACA, whether to certain provisions or its entirety. We cannot assure that the PPACA, as currently enacted or as amended in the future, will not adversely affect our business and financial results and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. For example, the Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals in spending reductions to Congress. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, which triggered the legislation’s automatic reduction to several government programs, including aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, starting in 2013. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which delayed for another two months the budget cuts mandated by the sequestration provisions of the Budget Control Act of 2011. The ATRA, among other things, also reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. On March 1, 2013, the sequestration went into effect.

There likely will continue to be legislative and regulatory proposals at the federal and state levels directed at containing or lowering the cost of health care. We cannot predict the initiatives that may be adopted in the future or their full impact. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of health care may adversely affect:

• our ability to set a price we believe is fair for our products;

• our ability to generate revenues and achieve or maintain profitability; and

• the availability of capital.

Furthermore, changes in regulatory requirements and guidance may occur and we may need to amend clinical trial protocols to reflect these changes. Amendments may require us to resubmit our clinical trial protocols to Institutional Review Boards for reexamination, which may impact the costs, timing or successful completion of a clinical trial. In light of widely publicized events concerning the safety risk of certain drug products, regulatory authorities, members of Congress, the Governmental Accounting Office, medical professionals and the general public have raised concerns about potential drug safety issues. These events have resulted in the recall and withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and establishment of risk management programs that may, for instance, restrict distribution of drug products or require safety surveillance and/or patient education. The increased attention to drug safety issues may result in a more cautious approach by the FDA to clinical trials and the drug approval process. Data from clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate or suspend clinical trials before completion, or require longer or additional clinical trials that may result in substantial additional expense and a delay or failure in obtaining approval or approval for a more limited indication than originally sought.

Given the serious public health risks of high profile adverse safety events with certain drug products, the FDA may require, as a condition of approval, costly risk evaluation and mitigation strategies, which may include safety surveillance, restricted distribution and use, patient education, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse events, preapproval of promotional materials and restrictions on direct-to-consumer advertising.

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If we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business. The regulations that may affect our ability to operate include, without limitation:

• the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs;

• indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs;

• the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government, and which may apply to entities like us which provide coding and billing advice to customers;

• federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests;

• the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and

• state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

The PPACA, among other things, amends the intent requirement of the Federal Anti-Kickback Statute and criminal healthcare fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the PPACA provides that the government may assert that a claim including items or services resulting from a violation of the Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

Risks Related to this Offering and Ownership of Our Common Stock

An active trading market for our common stock may not develop.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock was determined through negotiations with the underwriters, and the negotiated price

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may not be indicative of the market price of the common stock after the offering. Based on the estimated offering price of our common stock in this offering, our initial market capitalization is expected to be modest and as a result our common stock may not be an attractive investment for a number of institutional investors, which could reduce the trading activity in our stock and make the trading price of our stock more volatile. Although our common stock has been approved for listing on the NASDAQ an active trading market for our shares may never develop or be sustained following this offering. If an active market for our common stock does not develop, it may be difficult for our stockholders to sell shares purchased in this offering without depressing the market price for the shares or at all.

Our stock price may be volatile, and purchasers of our common stock could incur substantial losses.

Our stock price is likely to be volatile. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including the following:

• the success of competitive products or technologies;

• results of clinical trials of our product candidates or those of our competitors;

• regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our product candidates;

• introductions and announcements of future product candidates by us, our collaborators, or our competitors, and the timing of these introductions or announcements;

• actions taken by regulatory agencies with respect to our product candidates, clinical trials, manufacturing process or sales and marketing terms;

• variations in our financial results or those of companies that are perceived to be similar to us;

• the success of our efforts to discover, acquire or in-license additional products or product candidates;

• developments concerning our collaborations, including but not limited to those with our sources of manufacturing supply and our collaborators;

• manufacturing disruptions;

• announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

• developments or disputes concerning patents or other proprietary rights, including litigation matters and our ability to obtain patent protection for our product candidates;

• our ability or inability to raise additional capital and the terms on which we raise it;

• the recruitment or departure of key personnel;

• changes in the structure of healthcare payment systems;

• market conditions in the pharmaceutical and biotechnology sectors;

• actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally;

• trading volume of our common stock;

• sales of our common stock by us or our stockholders;

• changes in our board of directors or key personnel;

• the expiration of contractual lock-up agreements;

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• changes in our capital structure, such as future issuances of debt or equity securities;

• short sales, hedging and other derivative transactions involving our capital stock;

• general economic, industry and market conditions in the United States and abroad;

• other events or factors, including those resulting from war, incidents of terrorism or responses to these events; and

• the other risks described in this “Risk Factors” section.

These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could harm our business.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our common stock.

Immediately after this offering, we will have outstanding            shares of common stock based on the number of shares outstanding as of December 31, 2013. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Of the remaining shares,            shares are currently restricted as a result of securities laws or lock-up agreements but will be able to be sold after the offering as described in the section of this prospectus titled “Shares Eligible for Future Sale.” Moreover, immediately after this offering, holders of an aggregate of up to            shares of our common stock will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the section of this prospectus titled “Underwriting.”

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the balance of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of

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our common stock. We intend to use the proceeds from this offering to: (1) fund our ongoing clinical program for our ALD403; (2) continue to advance and to expand our preclinical studies and potential clinical efforts of our existing preclinical development programs; and (3) fund working capital, capital expenditures and other general corporate purposes, which may include the acquisition or licensing of other products, business or technologies.

The failure by our management to apply these funds effectively could result in financial losses that could harm our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

After this offering, our executive officers, directors and principal stockholders will maintain the ability to control or significantly influence all matters submitted to stockholders for approval.

Upon the closing of this offering, our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock before this offering will, in the aggregate, beneficially own shares representing approximately    % of our common stock, excluding any shares of our common stock that these stockholders may purchase in the offering. As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these stockholders, if they choose to act together, will control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire, which in turn could depress our stock price and may prevent attempts by our stockholders to replace or remove the board of directors or management.

Purchasers in this offering will experience immediate and substantial dilution in the tangible net book value of their investment.

The assumed initial public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock immediately after this offering. Therefore, if you purchase our common stock in this offering, you will incur an immediate dilution of $         in net tangible book value per share from the price you paid, based on an assumed initial public offering price of $         per share, the midpoint of the range set forth on the cover page of this prospectus. In addition, new investors who purchase shares in this offering will contribute approximately     % of the total amount of equity capital raised by us through the date of this offering, but will only own approximately     % of the outstanding share capital. The exercise of outstanding options and warrants will result in further dilution. For a further description of the dilution that you will experience immediately after this offering, see the section of this prospectus titled “Dilution.”

We are an “emerging growth company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, which was enacted in April 2012. For as long as we continue to be an emerging growth company, we intend take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common

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stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may suffer or be more volatile.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to avail ourselves of this exemption, and, therefore, we are not subject to the same new or revised accounting standards as other public companies that are not “emerging growth companies” until these standards apply to private companies.

Complying with the laws and regulations affecting public companies will increase our costs and the demands on management and could harm our operating results.

As a public company, and particularly after we cease to be an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and The NASDAQ Stock Market impose numerous requirements on public companies, including requiring changes in corporate governance practices. Also, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. Our management and other personnel will need to devote a substantial amount of time to compliance with these laws and regulations. These burdens may increase as new legislation is passed and implemented, including any new requirements that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 may impose on public companies. These requirements have increased and will continue to increase our legal, accounting, and financial compliance costs and have made and will continue to make some activities more time consuming and costly. We estimate that we will incur approximately $1.5 million to $2.5 million in incremental costs per year associated with being a publicly traded company, although it is possible that our actual incremental costs will be higher than we currently estimate. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and in the future we may be required to accept reduced policy limits and coverage or to incur substantial costs to maintain the same or similar coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or our board committees or as executive officers.

The Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and the effectiveness of our disclosure controls and procedures quarterly. In particular, beginning January 1, 2014, Section 404 of the Sarbanes-Oxley Act, or Section 404, requires us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm potentially to attest to, the effectiveness of our internal control over financial reporting. As an “emerging growth company,” we expect to avail ourselves of the exemption from the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404. However, we may no longer avail ourselves of this exemption when we cease to be an “emerging growth company.” When our independent registered public accounting firm is required to undertake an assessment of our internal control over financial reporting, the cost of our compliance with Section 404 will correspondingly increase. Our compliance with applicable provisions of Section 404 will require that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement additional corporate governance practices and comply with reporting requirements. Moreover, if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

Furthermore, investor perceptions of our company may suffer if deficiencies are found, and this could cause a decline in the market price of our stock. Irrespective of compliance with Section 404, any failure of our internal control over financial reporting could have a material adverse effect on our stated operating results and harm our reputation. If we are unable to implement these requirements effectively or efficiently, it could harm our

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operations, financial reporting, or financial results and could result in an adverse opinion on our internal control over financial reporting from our independent registered public accounting firm.

Provisions in our corporate charter documents could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our corporate charter and our bylaws that will become effective upon the closing of this offering may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. Among others, these provisions include the following:

• our board of directors is divided into three classes with staggered three-year terms which may delay or prevent a change of our management or a change in control;

• our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

• our stockholders may not act by written consent or call special stockholders’ meetings; as a result, a holder, or holders, controlling a majority of our capital stock would not be able to take certain actions other than at annual stockholders’ meetings or special stockholders’ meetings called by the board of directors, the chairman of the board, the chief executive officer or the president;

• our certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

• stockholders must provide advance notice and additional disclosures in order to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company; and

• our board of directors may issue, without stockholder approval, shares of undesignated preferred stock; the ability to issue undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.

Provisions under Delaware law and Washington law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

In addition to provisions in our corporate charter and our bylaws that will become effective upon the closing of this offering, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any holder of at least 15% of our capital stock for a period of three years following the date on which the stockholder became a 15% stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances now or in the future. These provisions prohibit a “target corporation” from engaging in any of a broad range of business combinations with any stockholder constituting an “acquiring person” for a period of five years following the date on which the stockholder became an “acquiring person.” See the section of this prospectus titled “Description of Capital Stock—Anti-takeover Provisions” for additional information.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This prospectus, particularly in the sections titled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this prospectus, regarding, among other things:

• our ability to obtain and maintain regulatory approval of our product candidates;

• our ability to successfully commercialize any of our products that are approved;

• the rate and degree of market acceptance of our products;

• our estimates of our expenses, ongoing losses, future revenues, capital requirements and our needs for or ability to obtain additional financing;

• our expected uses of the net proceeds to us from this offering;

• our expectation that our existing capital resources and the net proceeds from this offering will be sufficient to enable us to complete our ongoing clinical studies;

• our ability to obtain and maintain intellectual property protection for our products and product candidates;

• the ability to scale up manufacturing of our product candidates to commercial scale;

• our reliance on BMS’s and future collaboration partners’ performance, over which we do not have control;

• the actual receipt and timing of any milestone payments or royalties from our collaborators;

• our ability to successfully establish and successfully maintain appropriate collaborations and derive significant revenues from those collaborations;

• our reliance on third parties to conduct our clinical studies;

• our reliance on third-party contract manufacturers to manufacture and supply our product candidates for us;

• our ability to identify and develop new products and product candidates;

• our ability to enroll patients in our clinical studies at the pace that we project;

• our ability to retain and recruit key personnel;

• our financial performance; and

• developments and projections relating to our competitors or our industry.

These risks are not exhaustive. Other sections of this prospectus may include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our

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management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This prospectus also contains market data and industry forecasts that were obtained from industry publications. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we believe the market position, market opportunity and market size information included in this prospectus is generally reliable, such information is inherently imprecise.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from the sale of             shares of common stock that we are selling in this offering of approximately $             million, based on an assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise in full their over-allotment option to purchase additional shares, we estimate that our net proceeds will be approximately $             million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) the net proceeds to us from this offering by approximately $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) by 1,000,000 shares in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $             million, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions. We do not expect that a change in the initial price to the public or the number of shares by these amounts would have a material effect on uses of the proceeds from this offering, although it may accelerate the time at which we will need to seek additional capital.

As of December 31, 2013, we had cash and cash equivalents of $23.2 million. We currently estimate that we will use the net proceeds from this offering, together with our cash and cash equivalents, as follows:

• approximately $37.0 million for our planned Phase 2b dose-ranging trial of our monoclonal antibody, ALD403, targeting CGRP for prevention of migraine;

• approximately $5.5 million for preclinical product development activities; and

• the balance for working capital and other general corporate purposes, which may include the acquisition or licensing of other products, businesses or technologies.

The expected uses of the net proceeds from this offering and our existing cash, cash equivalents and short-term investments represent our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development and commercialization efforts and the status of and results from clinical trials, as well as any collaborations that we may enter into with third parties for our product candidates and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We have no current understandings, agreements or commitments for any material acquisitions or licenses of any products, businesses or technologies.

Based on our planned use of the net proceeds from this offering and our existing cash and cash equivalents described above, we expect that such funds will be sufficient to enable us to complete a Phase 2b dose-ranging trial of ALD403. However, we may not achieve the progress that we expect because the actual costs and timing of drug development, particularly clinical trials, are difficult to predict, subject to substantial risks and delays and often vary depending on the particular disease and development strategy.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds with a view toward liquidity and capital preservation.

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DIVIDEND POLICY

We have never declared or paid, and do not anticipate declaring, or paying in the foreseeable future, any cash dividends on our capital stock. Future determinations as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our operating results, financial conditions, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2013:

• on an actual basis;

• on a pro forma basis to reflect (1) the filing of our amended and restated certificate of incorporation and (2) the conversion of all outstanding shares of our preferred stock into an aggregate of 115,027,876 shares of our common stock immediately prior to the closing of this offering; and

• on a pro forma as adjusted basis to further reflect the sale by us of             shares of common stock in this offering at an assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

You should read the information in this table together with the sections in this prospectus titled “Selected Consolidated Financial Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	As of December 31, 2013
	Actual			Pro Forma			Pro Forma  As Adjusted(1)
	(in thousands, except share and per share data)
Cash and cash equivalents	$	23,227		$	23,227		$
Convertible preferred stock, $0.0001 par value, 116,020,270 shares authorized and 115,027,876 issued and outstanding, actual; and no shares authorized, issued or outstanding pro forma and pro forma as adjusted	$	111,374		$	—		$
Stockholders’ (deficit) equity:
Preferred stock, $0.0001 par value, no shares authorized, issued and outstanding, actual; and             shares authorized, no shares issued or outstanding pro forma and pro forma as adjusted		—			—
Common stock, par value $0.0001 per share; 140,000,000 shares authorized, 5,437,857 shares issued and outstanding, actual;              shares authorized, pro forma and pro forma as adjusted; 120,465,733 shares issued and outstanding, pro forma;             shares issued and outstanding, pro forma as adjusted		1			12
Additional paid-in capital		2,442			113,805
Accumulated other comprehensive loss		9			9
Accumulated deficit		(145,814	)		(145,814	)
Total stockholders’ (deficit) equity		(143,362	)		(31,988	)
Total capitalization	$	(31,988	)	$	(31,988	)	$

(1) A $1.00 increase (decrease) in the assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ (deficit) equity and total capitalization by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) cash, cash equivalents and short-term investments, additional paid-in capital, total stockholders’ (deficit) equity and total capitalization by approximately $             million, assuming an initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions. The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

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The outstanding share information in the table above is based on 120,465,733 shares of common stock outstanding as of December 31, 2013 and excludes:

• 11,614,300 shares of common stock issuable upon the exercise of outstanding stock options as of December 31, 2013, at a weighted-average exercise price of $0.40 per share;

• 1,865,344 shares of common stock reserved for future issuance under our 2005 Stock Plan as of December 31, 2013, which shares will cease to become available for future issuance immediately prior to the time our 2014 Equity Incentive Plan becomes effective;

•             shares of common stock to be reserved for future issuance under our 2014 Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this benefit plan, which will become effective upon the execution of the underwriting agreement related to this offering; and

•             shares of common stock to be reserved for issuance under our 2014 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this benefit plan, which will become effective upon the execution of the underwriting agreement related to this offering.

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DILUTION

Dilution is the amount by which the price paid by the purchasers of the shares of common stock sold in the offering exceeds the net tangible book value per share of common stock after the offering. Net tangible book value per share is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of common stock deemed to be outstanding at that date.

Our pro forma net tangible book deficit as of December 31, 2013 was $(32.0) million, or $(0.27) per share, which gives effect to the conversion of all outstanding shares of our preferred stock into an aggregate of 115,027,876 shares of our common stock immediately prior to the closing of this offering.

After giving effect to the sale of                 shares of common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 31, 2013, would have been $         million, or $         per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $         per share to our existing stockholders and immediate dilution of $         per share to investors purchasing common stock in this offering.

The following table illustrates this dilution on a per share basis to new investors:

Assumed initial public offering price per share				$
Pro forma net tangible book deficit per share at December 31, 2013	$	(0.27	)
Pro forma increase per share attributable to new investors
Pro forma as adjusted net tangible book value per share after giving effect to this offering
Dilution in net tangible book value per share to new investors				$

Each $1.00 increase (decrease) in the assumed initial public offering price of $         would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $         per share and the dilution to new investors by $         per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of common stock offered by us would increase (decrease) the pro forma as adjusted net tangible book value by $         per share and the dilution to new investors by $         per share, assuming the assumed initial public offering price remains the same and after deducting underwriting discounts and commissions.

If the underwriters exercise in full their over-allotment option to purchase                 additional shares from us, the pro forma as adjusted net tangible book value per share after giving effect to this offering would be $         per share, representing an immediate increase to existing stockholders of $         per share, and immediate dilution to investors in this offering of $         per share.

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The following table summarizes, as of December 31, 2013 on the pro forma as adjusted basis described above:

• the total number of shares of common stock purchased from us by our existing stockholders and by new investors purchasing shares in this offering;

• the total consideration paid to us by our existing stockholders and by new investors purchasing common stock in this offering, assuming an initial public offering price of $         per share, the midpoint of the range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us in connection with this offering; and

• the average price per share paid by existing stockholders and by new investors purchasing shares in this offering.

	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
Existing stockholders				%	$			%	$
New investors
Total			100	%	$		100	%

The tables and calculations above are based on 120,465,733 shares of common stock outstanding as of December 31, 2013 and exclude:

• 11,614,300 shares of common stock issuable upon the exercise of outstanding stock options as of December 31, 2013, at a weighted-average exercise price of $0.40 per share;

• 1,865,344 shares of common stock reserved for future issuance under our 2005 Stock Plan as of December 31, 2013, which shares will cease to become available for future issuance immediately prior to the time our 2014 Equity Incentive Plan becomes effective;

•                 shares of common stock to be reserved for future issuance under our 2014 Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this benefit plan which will become effective upon the execution of the underwriting agreement related to this offering; and

•                 shares of common stock to be reserved for issuance under our 2014 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this benefit plan which will become effective upon the execution of the underwriting agreement related to this offering.

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) total consideration paid by new investors by $         million and increase (decrease) the total consideration paid to us by new investors by     % assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and without deducting underwriting discounts and commissions and estimated expenses payable by us.

In addition, if the underwriters exercise in full their over-allotment option to purchase                 additional shares from us, the number of shares held by the existing stockholders after this offering would be reduced to             , or     % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by new investors would increase to             , or     %, of the total number of shares of our common stock outstanding after this offering.

The shares reserved for future issuance under our 2014 Equity Incentive Plan and 2014 Employee Stock Purchase Plan will be subject to automatic annual increases in accordance with the terms of the plans. To the extent that options are exercised, new options are issued under our equity incentive plans, or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

In the following tables, we provide our selected consolidated financial data. We have derived the selected consolidated statements of operations data for the years ended December 31, 2012 and 2013 and our consolidated balance sheet data as of December 31, 2012 and 2013 from our audited consolidated financial statements appearing elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future, and our interim results are not necessarily indicative of the results that should be expected for the full year. You should read the following selected consolidated financial data together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included in this prospectus.

	Years Ended December 31,
	2012			2013
	(in thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues
Collaboration and license agreements	$	20,067		$	18,796
Operating expenses
Research and development		30,669			31,883
General and administrative		7,217			7,674
Total operating expenses		37,886			39,557
Loss from operations		(17,819	)		(20,761	)
Other income (expense)
Interest income		101			54
Other income		—			158
Interest expense		(88	)		—
Other expense		—			(64	)
Total other income		13			148
Net loss	$	(17,806	)	$	(20,613	)
Net loss per share—basic and diluted	$	(3.55	)	$	(3.84	)
Weighted average number of common shares used in net loss per share—basic and diluted		5,012,520			5,363,454
Pro forma net loss per share—basic and diluted(1)				$	(0.17	)
Pro forma weighted average number of common shares used in pro forma net loss per share—basic and diluted(1)					120,391,330

(1) See Note 15 to our consolidated financial statements for a description of the method used to compute basic and diluted net loss per share and pro forma net loss per share.

	As of December 31,
	2012			2013
	(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term investments	$	59,373		$	23,227
Total assets		64,654			26,739
Total liabilities		76,664			58,727
Convertible preferred stock		111,374			111,374
Accumulated deficit		(125,201	)		(145,814	)
Total stockholders’ deficit		(123,384	)		(143,362	)

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the section of this prospectus titled “Selected Consolidated Financial Data” and our financial statements and related notes included elsewhere in this prospectus. This discussion and other parts of this prospectus contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this prospectus titled “Risk Factors.”

Overview

We are a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize therapeutic antibodies with the potential to meaningfully transform current treatment paradigms. We have developed a proprietary antibody platform designed to select antibodies that have the potential to maximize efficacy as well as speed of onset and durability of therapeutic response. In addition, we believe our ability to efficiently manufacture antibodies using our yeast-based manufacturing technology, MabXpress, allows us to target diseases that traditionally have not been addressed by antibodies. Both our lead product candidates were discovered internally, have achieved proof-of-concept and are expected to enter final Phase 2b dose-ranging trials in 2014 in preparation for progression to Phase 3 trials if supported by the data.

ALD403 is our wholly-owned novel monoclonal antibody targeted to calcitonin gene-related peptide, or CGRP, for migraine prevention. We recently completed a three month randomized, placebo-controlled proof-of-concept trial of ALD403 in 163 patients suffering from five to 14 migraine days per month, or high frequency migraine. We plan to initiate a Phase 2b dose-ranging trial in the second half of 2014, with the goal of initiating pivotal Phase 3 trials in 2016.

Clazakizumab is a novel monoclonal antibody that inhibits the pro-inflammatory cytokine interleukin-6, or IL-6, and is being developed for both RA and psoriatic arthritis, or PsA. In November 2009, we entered into a license and collaboration agreement with Bristol-Myers Squibb, or BMS, for the development and commercialization of Clazakizumab and received an $85 million upfront payment. BMS is responsible for paying 100% of worldwide development costs for all indications, except cancer, and reimbursing us for certain clinical supply and development costs, subject to us being responsible for approximately 50% of costs incurred by us for development of manufacturing process improvements up to certain caps with respect to such costs. To date, in addition to the upfront payment, we have received two milestone payments totaling $18.5 million in the aggregate and reimbursed clinical supply and development costs of $26.6 million. We may also receive additional development-based and regulatory-based milestone payments of up to $394.0 million in RA. In addition, if Clazakizumab is commercialized for RA, we may receive sales-based milestones up to $500.0 million and tiered royalties starting in the mid-teens up to 20% on net sales of Clazakizumab. Under the collaboration agreement, we are entitled to additional milestone payments and royalties for additional indications, subject to certain reductions.

We are currently evaluating four programs with the view of advancing at least one candidate into the clinic in 2015 for a disease indication where therapeutic antibodies have not previously played a role. We will continue to enhance our technologies to discover optimized product candidates that can be manufactured efficiently on a very large scale. We may seek to monetize our technology platform by consummating partnerships with leading biotechnology and pharmaceutical companies. We also intend to continue to deploy capital to selectively develop our own portfolio of product candidates.

We were incorporated in 2002 and have not generated any product revenues. To date, our operations have been primarily funded by $111.4 million in private placements of our convertible preferred stock and $134.8 million in upfront payments, milestones and research and development payments from our collaborators and government grants.

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As of December 31, 2013, we had an accumulated deficit of $145.8 million. We expect to experience increasing operating losses for the foreseeable future. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

• conduct clinical trials for ALD403;

• continue to evaluate our preclinical programs and advance at least one product candidate into the clinic;

• enhance our proprietary antibody platform and conduct discovery and preclinical activities;

• manufacture antibodies for our preclinical programs and clinical trials;

• seek regulatory approval for our product candidates; and

• operate as a public company.

We will not generate revenues from product sales unless and until we or our collaborators successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. If we obtain regulatory approval for ALD403 or any future product candidate, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution to the extent that such costs are not paid by future collaborators. Our ability to generate product revenues and become profitable may also depend upon BMS’s ability to successfully commercialize Clazakizumab.

Financial Operations Overview

Revenues

Substantially all of our revenues in 2012 and 2013 were derived from our collaboration with BMS. Upfront fees, milestone payments and reimbursed clinical supply and development costs received under our collaboration agreements are deferred and are recognized as revenues over the development period using a time-based approach. Revenues recognized and cash payments received under these agreements were as follows:

	Years Ended December 31,
	2012		2013
	(in thousands)
Revenues recognized:
Bristol-Myers Squibb:
Amortization of deferred revenue from upfront payments	$	12,167	$	12,133
Recognition of milestone payments		3,690		2,642
Recognition of reimbursed clinical supply and development costs		4,111		3,921
Bristol-Myers Squibb total		19,968		18,696
Other collaborations		99		100
Total revenues recognized	$	20,067	$	18,796
Cash payments received:
Bristol-Myers Squibb:
Milestone payments	$	3,500	$	—
Reimbursed clinical supply and development costs		2,257		355
Bristol-Myers Squibb total		5,757		355
Other collaborations		100		—
Total cash payments received	$	5,857	$	355

We have not generated any revenues from the sale of products. In the future, we may generate revenues from product sales and from collaboration agreements in the form of license fees, milestone payments, reimbursements for clinical supply and development costs and royalties on product sales. We expect that any revenues we generate will fluctuate from quarter to quarter as a result of the uncertain timing and amount of such payments and sales.

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Research and Development Expenses

Research and development expenses represent costs incurred by us for the discovery and development of our product candidates. The following items are included in research and development expenses:

• external costs under agreements with clinical research organizations, or CROs, contract manufacturing organizations, or CMOs, and other significant third-party vendors or consultants used to perform preclinical, clinical and manufacturing activities;

• internal costs including employee-related costs such as salaries, benefits, stock-based compensation expense, travel, laboratory consumables and services for our research and development personnel; and

• allocated facilities, depreciation, and other expenses, which include rent and maintenance of facilities, information technology services and other infrastructure expenses.

We use our employee and infrastructure resources across multiple research and development programs directed toward evaluating our monoclonal antibodies for selecting product candidates. We manage certain activities such as preclinical toxicology studies, clinical trial operations and manufacture of product candidates through third-party CROs, CMOs or other third-party vendors. We track our significant external costs by each product candidate. We also track our human resource efforts on certain programs for purposes of billing our collaborators for time incurred at agreed upon rates. We do not, however, assign or allocate to individual product candidates or development programs our internal costs and we group these internal research and development activities into three categories:

Category	Description
Preclinical discovery and development	Research and development expenses incurred in activities substantially in support of discovery of new targets through the selection of a single product candidate. These activities encompass the discovery and translational medicine functions, including pharmacokinetic and drug metabolism preclinical studies, toxicology and early strain and assay development activities.
Pharmaceutical operations	Research and development expenses incurred related to manufacturing preclinical study and clinical trial materials, including scale-up process development and quality control activities.
Clinical development	Research and development expenses incurred related to Phase 1, Phase 2 and Phase 3 clinical trials, including regulatory affairs activities.

Our research and development expenses during 2012 and 2013 were as follows:

	Years Ended December 31,
	2012		2013
	(in thousands)
External costs:
ALD403	$	5,471	$	10,845
Clazakizumab		5,765		2,268
Unallocated internal costs:
Preclinical discovery and development		12,224		12,057
Pharmaceutical operations		4,924		4,696
Clinical development		2,285		2,017
Total research and development expenses	$	30,669	$	31,883

From inception through December 31, 2013, we have incurred $190.2 million in research and development expenses. Through December 31, 2013, we have incurred cumulative external costs of $18.2 million for ALD403

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and $74.2 million for Clazakizumab. Through December 31, 2013, we have billed BMS $26.6 million for clinical supply development costs under our collaboration agreement. Reimbursements from BMS are recognized as revenue pursuant to our revenue recognition policies. ALD403 costs in 2012 include costs incurred for our Phase 1 clinical trial and the initiation and startup costs of our proof-of-concept trial, which started in the first quarter of 2013.

We plan to increase our research and development expenses for the foreseeable future as we continue the development of ALD403 and the evaluation and advancement of future product candidates into clinical development. We anticipate spending approximately $5.5 million of the net proceeds from this offering for preclinical product development activities. We intend to initiate a Phase 2b dose-ranging clinical trial and initiate additional manufacturing activities to support a pivotal Phase 3 clinical trial for ALD403 in the second half of 2014 and anticipate spending approximately $37.0 million to complete these activities. We will also incur additional clinical trial and manufacturing costs for our Phase 3 clinical trials, but cannot determine with certainty the duration or costs to complete these future clinical trials until we determine the dose and design of these activities.

We have retained worldwide rights to develop and commercialize Clazakizumab in cancer subject to BMS’s option to co-develop Clazakizumab for cancer and commercialize Clazakizumab outside the United States. Cumulative external costs for Clazakizumab include costs attributable to five clinical trials in cancer indications. We anticipate completing our last ongoing clinical trial in cancer in first half of 2014. Although we may resume development of Clazakizumab in cancer in the future, we currently do not plan to do so.

The timing and amount of research and development expenses incurred will depend largely upon the outcomes of current and future clinical trials for our product candidates as well as the related regulatory requirements, manufacturing costs and any costs associated with the advancement of our preclinical programs. We cannot determine with certainty the duration and completion costs of the current or future clinical trials of our product candidates. The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:

• the scope, rate of progress, and expense of our ongoing, as well as any additional, clinical trials and other research and development activities;

• future clinical trial results;

• potential changes in government regulation; and

• the timing and receipt of any regulatory approvals.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, business development, intellectual property, finance, human resources and support functions. Other general and administrative expenses include allocated facility-related costs not otherwise included in research and development expenses, travel expenses and professional fees for auditing, tax and legal services, including intellectual property related legal services. We expect to incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities and other administrative and professional services.

Other Income (Expense)

Other income (expense) consists primarily of interest income received on our cash, cash equivalents and short-term investments, interest expense on our convertible promissory note payable which was outstanding until April 2012, and other income in 2013 which consisted of a refundable Australian tax credit received by our wholly-owned Australian subsidiary.

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Results of Operations

Comparison of the Years Ended December 31, 2012 and 2013

The following table summarizes our results of operations for 2012 and 2013, together with the changes in those items in dollars and as a percentage:

	Years Ended December 31,
	2012			2013			Dollar Change			% Change
	(dollars in thousands)
Revenues:
Collaboration and license agreements	$	20,067		$	18,796		$	(1,271	)		(6	%)
Operating expenses:
Research and development		30,669			31,883			1,214			4
General and administrative		7,217			7,674			457			6
Loss from operations		(17,819	)		(20,761	)		(2,942	)		17
Interest income		101			54			(47	)		(47	)
Other income		—			158			158			—
Interest expense		(88	)		—			88			—
Other expense		—			(64	)		(64	)		—
Net loss	$	(17,806	)	$	(20,613	)	$	(2,807	)		16

Revenues

Revenues for 2012 and 2013 were primarily associated with payments from BMS under our collaboration agreement. Revenues decreased by $1.3 million, or 6%, from 2012 to 2013 due to a decrease in clinical supply and development costs billed to BMS.

Research and Development Expenses

	Years Ended December 31,
	2012		2013		Dollar Change			% Change
	(dollars in thousands)
External costs:
ALD403	$	5,471	$	10,845	$	5,374			98	%
Clazakizumab		5,765		2,268		(3,497	)		(61	)
Unallocated internal costs:
Preclinical discovery and development		12,224		12,057		(167	)		(1	)
Pharmaceutical operations		4,924		4,696		(228	)		(5	)
Clinical development		2,285		2,017		(268	)		(12	)
Total research and development expenses	$	30,669	$	31,883	$	1,214			4

Research and development expenses increased $1.2 million, or 4%, from 2012 to 2013. External costs for ALD403 increased $5.4 million from 2012 to 2013, as we completed our Phase 1 clinical trial for ALD403 and transitioned to a larger proof-of-concept clinical trial during 2013. External costs for Clazakizumab decreased by $3.5 million from 2012 to 2013 as RA-related development costs decreased by $2.0 million and cancer-related development costs decreased by $1.5 million. We initiated Phase 2 clinical trials in two cancer related indications during 2012 prior to our decision to discontinue the development of Clazakizumab in cancer. We anticipate incurring expenses of $2.2 million during the first half of 2014 as our clinical trial in cancer concludes.

Unallocated internal costs decreased $0.7 million from 2012 to 2013. The decrease was primarily attributable to decreased activities related to our preclinical programs of $0.9 million and a decrease in consulting fees of $0.3 million. Unallocated internal costs also reflect an increase in personnel-related costs of $0.6 million.

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General and Administrative Expenses

General and administrative expenses increased by $0.5 million, or 6%, from $7.2 million in 2012 to $7.7 million in 2013 due to an increase in personnel-related expenses of $0.4 million and an increase in professional fees of $0.1 million.

Interest Income

The decrease of $47,000 in interest income is primarily due to a decrease in average cash, cash equivalents and short-term investments during 2013 compared to 2012.

Other Income

We recorded other income of $158,000 in 2013 related to an incentive payment received by our Australian subsidiary from the Australian government for eligible research and development expenditures in 2012. We did not have any other income in 2012.

Interest Expense

We incurred interest expense of $88,000 related to a convertible promissory note in 2012. In April 2012, the principal amount and accrued interest under the note was converted into Series D preferred stock. We did not incur any interest expense in 2013.

Other Expense

We recorded other expense of $64,000 in 2013 related to a loss on retirement of equipment of $43,000 and a loss on translation of foreign currency of $21,000. We did not incur any other expense in 2012.

Liquidity and Capital Resources

Due to our significant research and development expenditures, we have generated significant operating losses since our inception. We have funded our operations primarily through sales of our convertible preferred stock and payments from our collaboration partners. As of December 31, 2013, we had available cash and cash equivalents of $23.2 million. Our cash and cash equivalents are held in cash and money market accounts. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and degrees of risk.

We plan to continue to fund our operations and capital funding needs through equity and/or debt financing. We may also consider new collaborations or selectively partnering ALD403 for further clinical development and commercialization outside of the United States. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are not able to secure adequate additional funding we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could harm our business, results of operations and future prospects.

Our recurring losses from operations, negative cash flows and insufficient working capital raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We may never become profitable, or if we do, we may not be able to sustain profitability on a recurring basis.

The following table summarizes our cash flows for the periods indicated:

	Years Ended, December 31,
	2012			2013
	(in thousands)
Net cash used in operating activities	$	(29,902	)	$	(36,132	)
Net cash provided by (used in) investing activities		(1,507	)		5,546
Net cash provided by financing activities		37,905			48

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Cash Used in Operating Activities

The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital. Net cash used in operating activities was $36.1 million during 2013 compared to $29.9 million during 2012. The increase in cash used in operating activities in 2013 compared to 2012 was driven primarily by an increase in net loss of $2.8 million and a change in deferred revenue caused by a $3.5 million milestone payment received in 2012. The remaining differences in cash flows from operations primarily resulted from changes in accounts receivable.

Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was $5.5 million during 2013 compared to cash used in investing activities of $1.5 million during 2012. The cash provided by investing activities in 2013 was primarily the result of proceeds from maturities of investments. The net cash used in investing activities in 2012 was primarily the result of purchases of $1.0 million of property and equipment and $0.5 million in higher purchases of investments than proceeds from maturities of investments.

Cash Provided by Financing Activities

Cash provided by financing activities of $37.9 million during 2012 was primarily the result of proceeds from the issuance of our Series D convertible preferred stock.

We believe that our available cash and cash equivalents and the net proceeds of this offering will be sufficient to meet our projected operating requirements through at least 2015. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Furthermore, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development and commercialization sooner than planned. We currently have no credit facility or committed sources of capital other than potential milestones receivable under our collaboration agreement with BMS. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into additional collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials. Our future funding requirements will depend on many factors, as we:

• initiate or continue clinical trials of ALD403, our wholly-owned novel monoclonal antibody for prevention of migraine;

• continue the research and development of our product candidates;

• seek to discover additional product candidates;

• seek regulatory approvals for our product candidates that successfully complete clinical trials;

• establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize products which receive regulatory approval;

• enhance operational, financial and information management systems and hire additional personnel, including personnel to support development of our product candidates and, if a product candidate is approved, our commercialization efforts; and

• incur additional costs associated with becoming a public company.

To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all.

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Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during 2012 and 2013.

Contractual Obligations

Our contractual obligations as of December 31, 2013 were as follows:

	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(in thousands)
Operating lease obligations(1)	$	1,849	$	489	$	1,360	$	—	$	—
License agreements(2)		945		95		275		150		425
Purchase obligations(3)		2,536		2,398		138		—		—
Contract manufacturing obligations(4)		2,372		2,146		226		—		—
Total contractual obligations	$	7,702	$	5,128	$	1,999	$	150	$	425

(1) Represents future minimum lease payments under our non-cancelable operating lease. The minimum lease payments above do not include any related common area maintenance charges or real estate taxes.

(2) Some of our licensing agreements obligate us to pay a royalty on net sales of products utilizing licensed technology. Such royalties are dependent on future product sales and are not provided for in the table above as they are not estimable.

(3) We enter into agreements in the normal course of business with contract research organizations for clinical trials and with vendors for preclinical research studies and other services and products for operating purposes which are cancelable at any time by us, generally upon 30 days prior written notice. These payments are not included in this table of contractual obligations.

(4) Represents contractual obligations related to manufacturing our product candidates for use in our clinical trials, including long-term stability studies.

Newly Adopted Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update 2013-11 Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists that provides for disclosure requirements related to unrecognized tax benefits in certain situations. We will adopt this standard in the first quarter of 2014 and we do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

JOBS Act

As an “emerging growth company,” the JOBS Act allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.

Quantitative and Qualitative Disclosures about Market Risk

The primary objective of our investment activities is to preserve our capital to fund our operations. We also seek to maximize income from our investments without assuming significant risk. To achieve our objectives, we maintain a portfolio of cash equivalents and investments in a variety of securities of high credit quality. As of December 31, 2013, we had cash and cash equivalents of $23.2 million consisting of cash and money market accounts in highly rated financial institutions in the United States. A portion of our investments may be subject to interest rate risk and could fall in value if market interest rates increase. However, because our investments are primarily short-term in duration, we believe that our exposure to interest rate risk is not significant and a 1% movement in market interest rates would not have a significant impact on the total value of our portfolio. We actively monitor changes in interest rates.

We contract for the conduct of certain clinical development with vendors in Australia. We made an aggregate of $1.4 million and $0.3 million in payments to these Australian vendors during 2012 and 2013, respectively. We are subject to exposure due to fluctuations in foreign exchange rates in connection with these agreements and with our cash balance denominated in Australian dollars. We generally transfer funds to our

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Australian subsidiary to fund operating needs within 30 days of disbursement. For 2012 and 2013 the effect of the exposure to these fluctuations in foreign exchange rates was not material.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

We recognize revenues from collaboration, license or research service contract arrangements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

We evaluate multiple-element arrangements to determine (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a single unit of accounting. This evaluation involves subjective determinations and requires us to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that the delivered item has value to the customer on a standalone basis, and if the arrangement includes a general right of return with respect to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in our control. In assessing whether an item has standalone value, we consider factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, we consider whether the collaboration partner can use any other deliverable for its intended purpose without the receipt of the remaining deliverable, whether the value of the deliverable is dependent on the undelivered item and whether there are other vendors that can provide the undelivered items. For revenue arrangements entered into prior to January 1, 2011, we were also required to evaluate whether there was fair value of the undelivered elements in the arrangement. The deliverables under our 2009 BMS collaboration agreement did not qualify as separate units of accounting and accordingly are accounted for as a single unit of accounting.

The consideration received under an arrangement which contains separate units of accounting is allocated among the separate units using the relative selling price method. We determine the estimated selling price for units of accounting within each arrangement using vendor-specific objective evidence, or VSOE, of selling price, if available, third-party evidence, or TPE, of selling price if VSOE is not available, or best estimate of selling price, or BESP, if neither VSOE nor TPE is available.

When we have substantive performance obligations under an arrangement accounted for as one unit of accounting, revenues are recognized using either a time-based or proportional performance-based approach. When we cannot estimate the total amount of performance obligations that are to be provided under the arrangement, a time-based method is used. Under the time-based method, revenues are recognized over the arrangement’s estimated performance period based on the elapsed time compared to the total estimated performance period. When we are able to estimate the total amount of performance obligations under the arrangement, revenues are recognized using a proportional performance model. Under this approach, revenue recognition is based on costs incurred to date compared to total expected costs to be incurred over the performance period as this is considered to be representative of the delivery of service under the arrangement.

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Changes in estimates of total expected performance costs or service obligation time period are accounted for prospectively as a change in estimate. Under both methods, revenues recognized at any point in time are limited to the amount of noncontingent payments received or due.

We may also perform research and development activities on behalf of collaborative partners that are paid for by the collaborators. For research and development activities which are not determined to be separate units of accounting based on the criteria above, revenues for these research and development activities are recognized using the single unit of accounting method for that collaborative arrangement. For research and development activities which are determined to be separate units of accounting, arrangement consideration is allocated and revenues are recognized as services are delivered, assuming the general criteria for revenue recognition noted above have been met. The corresponding research and development costs incurred under these contracts are included in research and development expense in the consolidated statements of operations.

We generally invoice collaborators upon the completion of the effort, based on the terms of each agreement. Amounts earned, but not yet collected from the collaborators, if any, are included in accounts receivable in the accompanying consolidated balance sheets. Deferred revenue arises from payments received in advance of the culmination of the earnings process. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Deferred revenue will be recognized as revenue in future periods when the applicable revenue recognition criteria have been met.

Accrued Research and Development Expenses

As part of the process of preparing financial statements, we are required to estimate and accrue expenses, the largest of which are research and development expenses. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites. This process involves the following:

• communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost;

• estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and

• periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if necessary.

Examples of estimated research and development expenses that we accrue include:

• fees paid to CROs in connection with preclinical and toxicology studies and clinical trials;

• fees paid to clinical sites in connection with clinical trials;

We base our expense accruals related to clinical trials on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors, such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. For service contracts entered into that include a nonrefundable prepayment for service the upfront payment is deferred and recognized in the consolidated statement of operations as the services are rendered.

To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical trials and other research activities.

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Stock-Based Compensation

Stock-based compensation cost is measured on the grant date, based on the estimated fair value of the award using a Black-Scholes pricing model and recognized as an expense over the employee’s requisite service period on a straight-line basis. We recorded stock-based compensation expense of $0.5 million and $0.6 million for 2012 and 2013, respectively. At December 31, 2013, we had $0.9 million of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to stock option grants that will be recognized over a weighted-average period of 2.4 years. We expect to continue to grant stock options in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase.

We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these options is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option. The compensation costs of these arrangements are subject to remeasurement over the vesting terms as earned.

Key Assumptions

Our Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected volatility of the price of our common stock, the expected term of the option, risk-free interest rates and the expected dividend yield of our common stock. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

In determining the fair value of stock options granted, the following weighted-average assumptions were used in the Black-Scholes option pricing model for awards granted in the periods indicated:

	Years Ended, December 31,
	2012			2013
Volatility		70.8	%		69.3	%
Expected term (years)		6.1			5.9
Risk-free interest rate		0.9	%		1.1	%
Dividend rate		—			—

Common Stock Valuations

The fair value of our common stock underlying stock options has historically been determined by our board of directors, with assistance from management, based upon information available at the time of grant. Given the absence of a public trading market for our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid, our board of directors has exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors included:

• contemporaneous third-party valuations of our company and our securities;

• our results of operations, history of losses and other financial metrics;

• our stage of development and business strategy;

• the financial condition and operating results of publicly-owned companies with similar lines of business and their historical volatility;

• the prices of shares of our preferred stock sold to investors in arm’s length transactions, and the rights, preferences and privileges of our preferred stock relative to our common stock;

• the progress of our research and development programs, including the status of clinical trials for our products;

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• external market conditions, both in the United States and globally, that could affect companies in the life sciences and biotechnology sectors;

• the likelihood of a liquidity event such as an initial public offering, a merger or the sale of our company; and

• the current lack of marketability of our common stock as a private company.

The per share estimated fair value of our common stock in the table below represents the determination by our board of directors of the fair value of our common stock as of the date of grant, taking into consideration the various objective and subjective factors described above, including the conclusions, if applicable, of valuations of our common stock. There is inherent uncertainty in these estimates and if we had made different assumptions than those described below, the fair value of the underlying common stock and amount of our stock-based compensation expense, net loss and net loss per share amounts would have differed. Following the closing of this initial public offering the fair value per share of our common stock for purposes of determining stock-based compensation will be the closing price of our common stock as reported on The NASDAQ Stock Market on the applicable grant date.

The following table summarizes stock options granted from January 1, 2013 through February 28, 2014:

Grant Date	Number of Shares of Common Stock Underlying Options Granted		Exercise Price Per Share of Common Stock		Estimated Fair Value Per Share of Common Stock
January 2013		50,000	$	0.63	$	0.63
March 2013		149,500		0.63		0.63
May 2013		51,000		0.89		0.89
July 2013		35,000		0.89		0.89
January 2014		70,000		1.15		1.15
February 2014		630,900		1.23		1.23

Based on an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, the intrinsic value of stock options outstanding at December 31, 2013 was $         million, of which $         million and $         million related to stock options that were vested and unvested, respectively, at that date.

Two valuation approaches were used to estimate enterprise value: the income approach and the option-pricing model, or OPM, back solve approach, as defined in the Practice Aid. The income approach values a business based upon the future benefits that will accrue to it, with the value of the future economic benefits discounted back to a present value at an appropriate discount rate. The discounted cash flow analysis forecasts future revenues and free cash flow, or net operating profit after tax from continuing operations, associated with those revenues. The OPM back solve approach calculates the implied enterprise value based on recent sales of the company’s securities.

To estimate the fair value per share of our common stock, we utilized the OPM to allocate the equity value based on the preferences and priorities of the preferred and common stock. We then applied a discount for lack of marketability to the common stock to account for the lack of access to an active public market.

The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceed the value of the preferred stock liquidation preference at the time of a liquidity event, such as a strategic sale, merger or initial public offering. The common stock is modeled as a call option on the underlying equity value at a predetermined exercise price. In the model, the exercise price is based on a comparison with the total equity value rather than, as in the case of a regular call option, a comparison with a per share stock price. Thus, common stock is considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred stock liquidation preference is paid. The OPM uses the Black-Scholes option-pricing model to price the call options. This model defines the

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securities’ fair values as functions of the current fair value of a company and uses assumptions such as the anticipated timing of a potential liquidity event and the estimated volatility of the equity securities. The aggregate value of the common stock derived from the OPM is then divided by the number of shares of common stock outstanding to arrive at the estimated fair value per share.

Income Taxes

We use the liability method of accounting for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. We determine deferred income tax assets including net operating losses and liabilities, based on temporary differences between the book and tax bases of assets and liabilities. We believe that it is currently more likely than not that our deferred income tax assets will not be realized, and as such, a full valuation allowance is required.

We utilize a two-step approach for evaluating uncertain tax positions. Step one, recognition, requires us to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. If a tax position is not considered “more likely than not” to be sustained, no benefits of the position are recognized. If we determine that a position is “more likely than not” to be sustained, then we proceed to step two, measurement, which is based on the largest amount of benefit which is more likely than not to be realized on effective settlement. This process involves estimating our actual current tax exposure, including assessing the risks associated with tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and financial reporting purposes. If actual results differ from our estimates, our net operating loss and credit carryforwards could be materially impacted.

We file U.S. federal income and Australia tax returns. We currently are not subject to any state income tax filings. To date, we have not been audited by the Internal Revenue Service, Australian Tax Office or any state income tax authority.

As of December 31, 2013, our total deferred income tax assets were $53.4 million. Due to our history of losses and lack of other positive evidence, we have determined that it is more likely than not that our deferred income tax assets will not be realized, and therefore, the deferred income tax assets are fully offset by a valuation allowance at December 31, 2013. The deferred income tax assets were primarily comprised of U.S. net operating loss carryforwards, or NOLs, and tax credit carryforwards. As of December 31, 2013, we had U.S. net operating loss carryforwards of $87.8 million and federal tax credit carryforwards of $4.7 million to offset future taxable income or offset income taxes due. These NOLs and tax credit carryforwards expire beginning in 2024 through 2033, if not utilized.

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BUSINESS

Overview

We are a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize therapeutic antibodies with the potential to meaningfully transform current treatment paradigms. We have developed a proprietary antibody platform designed to select antibodies that have the potential to maximize efficacy as well as speed of onset and durability of therapeutic response. In addition, we believe our ability to efficiently manufacture antibodies using our yeast-based manufacturing technology, MabXpress, allows us to target diseases that traditionally have not been addressed by antibodies. We believe the clinical data obtained in our development program for ALD403, our wholly-owned clinical asset, exhibits the potential of this product candidate to transform the way physicians treat migraine prevention. Clazakizumab is being developed by our collaboration partner Bristol-Myers Squibb. Together with Bristol-Myers Squibb, we believe there is an opportunity to position Clazakizumab as an option for first-line biologic therapy for treatment of rheumatoid arthritis by demonstrating superior disease control rates versus biologic standard of care. The most commonly prescribed biologic standard of care are anti-TNFs, such as Humira or Enbrel. We estimate that the rheumatoid arthritis therapy market had more than $12 billion in worldwide sales in 2012 and will grow to $15 billion by 2016. Both our lead product candidates were discovered internally, have achieved proof-of-concept and are expected to enter final Phase 2b dose-ranging trials in 2014 in preparation for progression to Phase 3 trials if supported by the data.

ALD403 is our wholly-owned novel monoclonal antibody targeted to calcitonin gene-related peptide, or CGRP, for migraine prevention. CGRP is a validated target that is believed to play a key role in migraine. We are developing ALD403 for the prevention of migraine, and in a recent proof-of-concept trial, treatment with ALD403 resulted in 16% of patients achieving complete remission from their migraines. Approximately 36 million Americans suffer from migraines; however, only 22.3 million migraine sufferers have been clinically diagnosed. Migraine is a significant cause of disability, generally affecting individuals between the ages of 20 and 50, which are prime working years. The Migraine Research Foundation estimates U.S. employers lose more than $13 billion each year as a result in 113 million lost work days due to migraine. We believe the area of critical unmet need in migraine is preventive therapy with improved efficacy and tolerability to treat patients who have five or more migraine days per month. For the 12.6 million U.S. migraine patients who are candidates for migraine prevention, there are few therapeutic options to manage their disease. We believe this group of migraine patients is highly motivated to seek new treatments due to the limited success of current therapies.

We recently completed a three month double blind, randomized, placebo-controlled proof-of-concept trial of ALD403 in 163 patients suffering from five to 14 migraine days per month, or high frequency migraine. In this trial, a single intravenous, or IV, dose of ALD403 completely prevented migraines in 16% of patients over the entire three month period versus zero with placebo, representing a statistically significant reduction (p<0.001). Furthermore, ALD403 reduced migraine days by at least half in 60% of patients. ALD403 had a similar level of safety to placebo and was well tolerated and our trial had a drop out rate of less than 5%. We plan to initiate a Phase 2b dose-ranging trial in the second half of 2014 in order to identify dose response and durability so we may select a dose to take forward into pivotal Phase 3 trials in 2016. We believe ALD403, through its level of efficacy and clean safety profile to date, has the potential to address the unmet need in the migraine prevention market and as such represents a substantial market opportunity. If ALD403 is approved, we plan to build a 75 to 100 person sales force targeting high-prescribing neurologists and headache centers in the United States and may selectively partner outside the United States.

Clazakizumab is a novel monoclonal antibody that inhibits the pro-inflammatory cytokine interleukin-6, or IL-6, and is being developed for both rheumatoid arthritis, or RA, and psoriatic arthritis, or PsA. IL-6 is a protein associated with acute and chronic inflammation and is believed to initiate an acute immune response and the production of antibodies. IL-6 may also contribute to bone destruction. In November 2009, we entered into a license and collaboration agreement with BMS for the development and commercialization of Clazakizumab and received an $85 million upfront payment. The RA treatment market is currently dominated by a class of drugs that target tumor necrosis factor alpha, or anti-TNFs. Nevertheless, anti-TNFs are associated with low rates of disease remission and the response to these agents is not typically durable. In 2012, the American College of

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Rheumatology, or ACR, recommended that treatment of RA should be directed at achieving remission in patients or low disease activity if remission cannot be achieved. In a recently completed Phase 2b trial, the rates of disease remission of Clazakizumab plus methotrexate were numerically higher than those treated with Humira plus methotrexate. Methotrexate, or MTX, is one of the most commonly used medicines for the treatment of RA. MTX may decrease pain and swelling of RA and may delay or decrease damage to joints. MTX in combination with biologics has been shown to be more effective than MTX alone. Phase 2b dose-ranging trials are ongoing in 2014 in preparation for progression to Phase 3 trials if supported by the data. Based on current plans, BMS is expected to complete its ongoing Phase 2b dose-ranging clinical trial of Clazakizumab in RA patients in the second half of 2014. Together with BMS, we believe there is an opportunity to position Clazakizumab as an option for first-line biologic therapy for the treatment of RA by demonstrating superior disease control rates versus a biologic standard of care in Phase 3 trials.

Our proprietary antibody platform leverages three technologies for the selection, humanization and manufacturing of monoclonal antibodies. We focus on protein targets that have biology which has been validated by prior scientific or clinical research, specifically ligands, which are circulating proteins, rather than receptors, which are their fixed docking sites. We believe this strategy can lead to fewer drug doses at lower concentrations, while potentially minimizing off target activity and associated side-effects. To date we have discovered all of our product candidates in-house with a technology we call antibody selection, or ABS. This versatile technology allows us to identify the best site to inhibit on a particular target ligand and select an antibody that has both a high affinity and specificity for the target. We have pioneered a process that humanizes rabbit antibodies to produce antibodies that are greater than 95% human. However, unlike fully-human antibodies, we specifically design our antibodies to lack certain sugars in an effort to minimize the body’s recognition of such antibodies as foreign, thereby limiting infusion reactions as well as maximizing durability of the therapeutic response.

Our yeast-based proprietary manufacturing technology, MabXpress, offers distinct advantages over traditional mammalian cell culture approaches widely used in the manufacturing of antibodies. We are able to efficiently and reproducibly manufacture large quantities of high-quality antibodies. This is in contrast to mammalian cell culture approaches that are generally characterized by extended production times, costly media, risk of viral contamination and a lack of uniformity of the end product. Our proprietary manufacturing processes are designed to produce antibodies on a significantly larger scale than traditional antibody manufacturing processes. Together, these technologies have enabled us to progress to proof-of-concept in the clinic significantly faster than traditional programs which rely on mammalian cells for manufacturing.

Our founders and executive management team have held senior positions at leading biotechnology and pharmaceutical companies, possess over 100 years of combined experience across drug discovery and development and members of our management team have been involved in bringing several drugs to market. Prior to our founding, members of our senior management team occupied prominent roles at Celltech, a biotech company that was subsequently acquired by UCB. Our management team’s role in the discovery and development of the monoclonal antibodies, Cimzia and romosozumab, exemplifies their approach of pursuing novel intervention strategies. While the efficacy of an antibody was previously assumed to be related to both the binding and killing of the target cell, Cimzia demonstrated in RA patients that antibodies blocking TNF did not need to have cell-killing function to be effective. In osteoporosis, UCB’s romosozumab, partnered with Amgen, shows significant promise in being the first bone-building injectable antibody in what is currently a market served predominantly by oral therapeutics. Our combined experience led us to establish our proprietary platform that we believe enables us to develop best-in-class antibodies to transform current treatment paradigms.

Our Strategy

We aim to build an enduring, diversified biopharmaceutical company. We intend to leverage our expertise in discovery, development and commercialization to bring first-in-class and best-in-class monoclonal antibody therapeutics to patients who are underserved by current therapies.

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Key elements of our strategy include:

• Advance and commercialize ALD403 for the prevention of migraine. We plan to commercialize both IV and subcutaneous formulations of ALD403. In the second half of 2014, we intend to initiate a Phase 2b dose-ranging trial in high frequency migraine patients in order to identify the appropriate dose level and dose frequency for pivotal Phase 3 trials. Subject to confirmatory Phase 2b data, we plan to initiate pivotal Phase 3 trials in 2016 that are designed to obtain regulatory approval in the United States and to support regulatory filings in Europe for ALD403 for the treatment of patients with five to 14 migraine days per month, or high frequency migraine, and greater than 15 migraine days per month, or chronic migraine. If ALD403 is approved, we plan to build a 75 to 100 person sales force targeting high-prescribing neurologists and headache centers in the United States and may selectively partner outside the United States.

• Support BMS’s efforts to advance and commercialize Clazakizumab as an option for first-line biologic therapy initially in RA. In November 2009, we entered into a license and collaboration agreement with BMS, which provides for up to $1.35 billion in upfront and milestone payments across multiple indications. Based on its current plans, BMS is expected to complete its ongoing Phase 2b dose-ranging clinical trial of Clazakizumab in RA patients in the second half of 2014. Subject to meeting the objectives of this clinical trial, we expect BMS to commence pivotal Phase 3 trials as early as 2015, triggering a $40 million milestone payment to us. Inhibiting IL-6 biology has the potential to provide benefit in additional diseases and we anticipate that Clazakizumab may be further developed as a therapy in one or more additional diseases, such as PsA and chronic kidney disease, or CKD. To date, we have received $103.5 million from BMS in upfront and milestone payments, and we may become eligible to receive up to approximately $746 million in additional milestone payments. If approved, we may receive sales-based milestones up to $500 million and tiered royalties starting in the mid-teens up to 20% on net sales of Clazakizumab. As such, Clazakizumab has the potential to provide substantial cash flows to help fund our product pipeline and serve as an important validation of our approach to drug development.

• Leverage our technology platform to discover future product candidates for areas of unmet need. We are currently evaluating four programs with the view of advancing at least one candidate into the clinic in 2015 for a disease indication where therapeutic antibodies have not previously played a therapeutic role. We will continue to enhance our technologies to discover optimized product candidates that can be manufactured efficiently on a very large scale. We may seek to monetize our technology platform by consummating partnerships with leading biotechnology and pharmaceutical companies. We also intend to continue to deploy capital to selectively develop our own portfolio of product candidates.

• Build a leading biopharmaceutical company to transform current treatment paradigms. We have brought together a group of world class scientists and drug developers that, when coupled with our proprietary technologies, allow us to discover, develop and commercialize antibody-based therapeutics that have the potential to change the lives of patients suffering from many types of disease. We intend to establish targeted commercialization and marketing capabilities for our products in the United States.

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Product Candidates

Our pipeline includes two internally discovered humanized monoclonal antibodies, one wholly-owned program and one partnered program, as well as preclinical programs targeting additional indications that are in the discovery phase.

ALD403

ALD403 is a genetically engineered monoclonal antibody wholly-owned by us that targets CGRP for prevention of migraine. CGRP is a small protein that is involved in the transmission and heightened sensitivity to pain experienced in migraine. Drugs that block the CGRP pathway have been long sought after as a novel way to treat migraine. Small molecules, such as Merck’s Telcagepant, established that blocking CGRP could provide abortive treatment for migraine. By building on prior CGRP experiences, we believe there is compelling rationale to support the development of ALD403 for the prevention of migraine.

Migraine is a common neurological disorder that is characterized by over-excitability of specific areas of the brain. Migraine symptoms are debilitating and include intense sharp or throbbing pain, which is commonly accompanied by nausea, vomiting and high sensitivity to light and sound. For those individuals afflicted with nausea and vomiting, these symptoms can make taking oral medications challenging or ineffective. The duration of a migraine can span from hours to days and when symptoms become severe, migraine sufferers often seek treatment through emergency room visits. According to a 2012 report by the U.S. Agency for Healthcare Research and Quality, headaches accounted for 2.1 million visits to the emergency room annually. Migraines can severely restrict normal activities and often require bed rest, making holding a job or maintaining a normal lifestyle difficult. The Migraine Research Foundation estimates U.S. employers lose more than $13 billion each year as a result of 113 million lost work days due to migraine.

The Migraine Research Foundation estimates that 36 million Americans suffer from migraines. It is estimated that there are 22.3 million migraine sufferers who have been diagnosed. According to the American Migraine Foundation, migraine is three times more common in women than men and migraine affects 30% of women over a lifetime. Migraine is most common between the ages of 20 and 50 in both men and women. We divide migraine frequency into low frequency, high frequency and chronic. We characterize low frequency migraine as zero to four migraine days per month, high frequency migraine as five to 14 migraine days per month and chronic migraine as 15 or more migraine days per month. Approximately 12.6 million patients, or 56% of diagnosed migraine sufferers, are candidates for migraine prevention therapy.

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We believe the area of critical unmet need in migraine is for preventive therapies with improved efficacy and tolerability to treat the individuals with high frequency and chronic migraine. Indications for preventive migraine medications may include:

• frequency of migraine attacks greater than two per month with disability that lasts three or more days per month;

• abortive medications fail or are overused;

• symptomatic medications (e.g. analgesics or anti-emetics) are contraindicated or ineffective; or

• migraine variants such as those that effect motor function, or hemiplegic migraine, or migraines producing profound disruption or risk of permanent neurologic injury.

Current treatments are ineffective for many of these patients and tolerability of side-effects severely limits their use. We believe, in the presence of a more effective treatment, patients who have previously abandoned therapy will again seek treatment.

Current Therapies

Migraine treatment involves abortive and preventive therapy. Abortive medications aim to reverse, or at least stop, the progression of a migraine once it has started. Preventive medications, which are given even in the absence of a migraine, aim to reduce the frequency and severity of the migraine attack, make acute attacks more responsive to abortive medications and may improve the patient’s quality of life to a greater degree than abortive medications alone.

Abortive Medications. Numerous abortive medications are used for migraine. The choice for an individual patient depends on the severity of the attacks, associated symptoms, such as severity of pain, incidence of nausea and vomiting, and the patient’s treatment response. Patients most commonly use a non-steroidal anti-inflammatory drug, a 5-hydroxytryptamine–1 agonists, or triptans, or a combination of both to abort a migraine. Triptans are most effective when taken early during a migraine and may be repeated in two hours as needed, with a maximum of two doses daily. Triptans are not recommended for use more than three days a week because overuse can lead to increased frequency of migraines and medication overuse headache. Approximately 30% to 50% of patients respond to triptans and there is a high rate of recurrence of migraine within 24 hours. To avoid the development of medication overuse headache, patients are limited to no more than 10 doses of triptans in any one month, which may be insufficient to treat patients with high frequency or chronic migraines. This limitation can also be problematic for migraine patients who suffer from nausea and vomiting and cannot keep triptans in their systems. In addition to these limitations, triptans are also contraindicated for patients with existing, or at risk of, coronary artery disease.

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Preventive Medications. Currently, preventive medications approved for migraine include beta blockers, such as propranolol, topiramate, sodium valproate, and botulinum toxin, or Botox.

In patients with high frequency and chronic migraine, beta blockers, topiramate and sodium valproate are commonly used. These medications are often not well-tolerated by patients because of adverse events such as cognitive impairment, nausea, fatigue and sleep disturbance. In clinical trials, complete responses, or a 100% reduction in migraine days or episodes, with topiramate were less than 6%. In the affected patient population, predominantly women of child-bearing age, the association of these agents with poor pregnancy outcomes and fetal abnormalities can limit their use.

Botox is only approved in patients with 15 or more migraine days per month, or chronic migraine. Approximately 47% of Botox-treated patients experience a 50% reduction in either migraine days per month or migraine frequency per month within six months, which leaves more than half of patients inadequately treated. In Phase 3 trials, Botox did not report any complete responses. In addition, the dosing regimen requires approximately 31 subcutaneous injections at various sites on the head and neck which is repeated every 12 weeks if the patient has a therapeutic response.

Unmet Need

According to the U.S. Agency for Healthcare Research and Quality, only about 12% of adults with high frequency or chronic migraine take preventive medications. According to the American Migraine Foundation, medication side-effects often limit the use of migraine medications. We believe there is a need for a new therapy that is long lasting, safe, effective and has reduced side-effects compared to currently available therapies, and that can either prevent migraines completely or reduce the frequency to a level where patients can find adequate relief from existing abortive medications. Such a therapy could provide benefit for both patients on existing therapies and patients who have abandoned therapy.

Our Solution

We are developing ALD403 as a highly potent, long-acting therapeutic that modulates the activity of CGRP and, based on clinical trials data from our proof-of-concept trial, provides substantial relief to patients with high frequency migraine with no observed tolerability or safety issues. The high selectivity and low off-target action, the long half-life and favorable dosing options of ALD403, suits this treatment setting where compounds need robust, safe and sustained benefit for the patient seeking treatment. We are developing both IV and subcutaneous delivery methods in order to provide options for less frequent dosing of the therapy and accommodate patients’ preferred method of administration. In our proof-of-concept trial in high frequency migraine patients with an average of nine migraine days per month, approximately 16% of patients using ALD403 experienced a complete response, with no migraines. Furthermore, the majority of patients had a statistically significant reduction in migraine days per month; for example, 60% of all treated patients had a reduction in migraine days by at least half. We believe reductions of this magnitude can shift the disease into a range of migraine days that can be managed with abortive medications. In addition, to date we have not observed any differences in safety data between ALD403 and placebo.

Other CGRPs

The CGRP pathway has been long sought after as a novel pathway to treat migraine, however, no currently approved therapies target CGRP. There have been two distinct approaches; those for abortive treatment and those for prevention. Small molecule drugs, such as Merck’s Telcagepant, established that blocking CGRP could provide abortive treatment for migraine. However, these small molecules, which have very different properties than ALD403, had side-effects and toxicity issues that curtailed their development. The Merck experience validated CGRP biology as a target for migraine but suggested a different strategy for intervention to be utilized to avoid toxicity issues. By building on prior experiences of other companies targeting the CGRP pathway, we believe there is compelling rationale to support the development of a highly selective antibody, such as ALD403, for the prevention of migraine. In clinical trials of ALD403 to date, involving more than 150 subjects, we have not observed any significant side-effects or toxicity issues.

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There are a number of compounds in different phases of development that are targeting CGRP biology. These are summarized below.

Compound	Company	Target	Stage of Development	Dosing/Formulation	Efficacy Results
ALD403	Alder	CGRP	Proof-of-Concept—High frequency migraine Phase 2b—High frequency migraine dose-ranging	Single dose IV Quarterly IV	Highly effective in high frequency migraine Trial to be commenced
			Phase 2b—High frequency migraine dose-ranging	Monthly Subcutaneous	Trial to be commenced
LBR101/ PF-04427429	Labrys	CGRP	Phase 2—High frequency episodic migraine Phase 2—Chronic migraine	Monthly Subcutaneous Monthly Subcutaneous	Not available; study on-going Not available; study on-going
LY-2951742	Lilly (Arteaus)	CGRP	Phase 2a—Frequent episodic migraine proof-of-concept	Every two weeks Subcutaneous	Not available
AMG-334	Amgen	CGRP	Phase 2—Dose-ranging in high frequency migraine Phase 1—Efficacy, safety, tolerability and pharmacokinetics in women with hot flashes associated with menopause	Subcutaneous Subcutaneous	Not available; study on-going Not available; study on-going
AMG-334	Amgen	CGRP	Phase 2—Dose-ranging in chronic migraine	Subcutaneous	Not available; study on-going

Clinical Trials

ALD403 has been evaluated in two clinical trials. The table below summarizes the clinical trials completed to date and the planned Phase 2b trial.

Trial	Stage of Development	Trial Population	Study Locations	Active/Placebo	Trial Status
ALD403	Phase 1	Healthy Subjects	Australia	67/37	Completed
ALD403	Proof-of-Concept Trial	High Frequency Migraine	United States	81/82	Completed
ALD403	Phase 2b	High Frequency Migraine	TBD	TBD	Planned

Completed Proof-of-Concept Trial. Our most recent clinical trial of ALD403 was a single dose, double-blind, placebo-controlled, randomized proof-of-concept trial to evaluate the safety, pharmacokinetics and efficacy of ALD403 in patients with high frequency migraine. Pharmacokinetics describe the action of a specific drug in the body over a period of time, including the process of absorption, distribution, metabolism and excretion. Approximately 80 patients each received one dose of ALD403 in the clinical trial.

Differences in the change in mean migraine days per month was the approvable endpoint for the pivotal clinical trials of Botox and topiramate, which have been approved for preventive migraine therapy. The primary endpoint for our proof-of-concept trial was the difference between ALD403 and placebo in the change of mean migraine days per month from baseline to weeks five through eight following one dose of ALD403. As illustrated in the figure below, in the trial, one dose of ALD403 produced a rapid and durable reduction in migraine days that was statistically significant when compared to placebo, in terms of both change in migraine

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days per month (p=0.03) and the magnitude of the change in migraine days prevented across all patients (p<0.001) at the primary endpoint of eight weeks. The reduction in migraine days per month was also statistically significant across the entire combined three month trial period (p=0.0078).

In this trial, the “p” values were statistical calculations to determine whether the effects of ALD403 were significant in comparison to placebo based on pre-specified statistical targets. We specified that any result less than p=0.05 would be significant. This trial was designed to provide statistically significant results. Phase 3 trials will be needed to confirm the significant findings of the proof-of-concept trial in order to support regulatory approvals.

ALD403 1000 mg IV versus Placebo IV as a Single Dose

As illustrated in the table below, 16% of patients receiving a single dose of ALD403 achieved complete response versus 0% on placebo over the entire 12 week trial. In any four week period of the trial (weeks 1-4, 5-8 or 9-12), approximately 75% of patients achieved a 50% reduction, 45% or more achieved a 75% reduction and 27% or more achieved a 100% reduction in migraine days. We believe measuring response rates, or the magnitude of the change in migraine days prevented across patients, provides an important measure of patient benefit to prescribing physicians and patients. For example, telling a patient that he or she has a one in six chance

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of achieving a complete response, meaning no migraines, can be easier to relate to than reduction of mean migraine days per month.

Number (Percentage) of Patients Achieving a 50%, 75% and 100% Reduction in Migraine Days During Weeks 1-4, 5-8, and 9-12
Time Period	Percent Reduction Migraine Days	Placebo IV	ALD403 1000 mg IV
Weeks 1-4	Number of Evaluable Patients	80	76
	50%	40 (50.0)	57 (75.0)
	75%	19 (23.8)	39 (51.3)
	100%	4 (5.0)	21 (27.6)
Weeks 5-8	Number of Evaluable Patients	80	78
	50%	43 (53.8)	59 (75.6)
	75%	28 (35.0)	35 (44.9)
	100%	12 (15.0)	21 (26.9)
Weeks 9-12	Number of Evaluable Patients	78	73
	50%	52 (66.7)	55 (75.3)
	75%	24 (30.8)	39 (53.4)
	100%	13 (16.7)	30 (41.1)
Weeks 1-12	Number of Evaluable Patients	76	68
	50%	25 (32.9)	41 (60.3)1
	75%	7 (9.2)	22 (32.4)1
	100%	0	11 (16.2)1

¹ The reduction in migraine days during weeks 1-12 was statistically significant (p<0.001).

The following figure presents data from patients who achieved a 50%, 75% and 100% reduction in migraines at all time points in the trial. ALD403 provided a statistically significant reduction versus placebo in migraines at all response levels in these patients (p<0.001).

ALD403 was well-tolerated and adverse events were comparable in terms of type and frequency across ALD403 and placebo groups.

Completed Phase 1 Clinical Trial. The first clinical trial of ALD403 consisted of three parts:

• Part A: The first part was a single dose, placebo-controlled, randomized, ascending dose trial to determine the safety, tolerability and pharmacokinetics of IV administered ALD403 in healthy volunteers and migraine patients. Fifty-five subjects received one IV dose (dose range: 1 – 1000 mg) of ALD403.

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ALD403 was well-tolerated and there were no differences exhibited in any safety measure, including laboratory safety parameters, between subjects who received ALD403 and subjects who received placebo at any dose level. ALD403 displayed a long half-life of approximately 32 days for the 1000 mg dose and linear pharmacokinetics for doses ranging from 1 to 1000 mg. Pharmacodynamic effects characterized by a dose-related inhibition of vasodilation induced by topically applied capsaicin were observed in subjects receiving IV administration of ALD403 and persisted through 84 days post-treatment. Pharmacodynamics describe the biochemical and physiological effects of a specific drug on the body and the relationship between drug concentration and effect.

• Part B: In the second part, we demonstrated that ALD403 can be used safely in combination with triptans, the dominant abortive treatment for low frequency migraines. When ALD403 was administered and then followed by triptan administration, no changes in systolic or diastolic blood pressure or other safety parameters were noted beyond these when triptans were given alone.

• Part C: In the third part, our subcutaneous formulation of ALD403 was 70.3% bioavailable when compared to IV and the pharmacodynamics effect was similar to that of IV in magnitude and duration.

Clinical Development Plan

During 2014, we intend to initiate a Phase 2b dose ranging, double blind, randomized, placebo-controlled trial of an IV formulation in patients with high frequency migraine in order to select the appropriate dose to take forward into pivotal Phase 3 trials in 2016. Using data from the Phase 2b trial, we plan to select an appropriate dose-level for evaluating a subcutaneous formulation in a subsequent dose ranging trial. The main efficacy endpoints will be the responder analysis (patents achieving 50%, 75% and 100% reduction in migraine days per month) and mean difference in migraine days per month.

We currently hold an IND for ALD403 for the treatment of migraine, which was submitted in December 2012 and remains active. If we generate positive Phase 2b data, we plan to conduct Phase 3 trials in both high frequency and chronic migraine patients utilizing both formulations as appropriate.

Commercial Strategy

In the United States, due to the severity of the disease, patients with high frequency or chronic migraine seek preventive treatment from neurologists and pain specialists. By the time a high frequency or chronic migraine patient begins prevention therapy, the patient may have experienced any or all of increased headache frequency, nonresponse to abortive therapy and significant migraine-related disability. Neurologists prescribe preventive therapies more often than do primary care physicians and pain specialists across all headache frequencies. For example, in the case of topiramate, a leading preventive migraine medication, despite representing only 9% of the doctors prescribing anti-migraine medications, neurologists account for almost half of all the prescriptions written for topiramate. Given the referral patterns for migraine and the need for improved patient care, the American Migraine Foundation has initiated a program to establish headache centers in major cities across the United States. If ALD403 is approved, we plan to build a 75 to 100 person sales force targeting the high-prescribing neurologists and headache centers in the United States and may selectively partner outside the United States.

We intend to commercialize both IV and subcutaneous formulations in order to optimize sustained delivery and patient choice. Subcutaneous formulation allows for self-administration, which provides patients convenience and greater control over the treatment of their disease. In addition, we believe that an IV formulation that allows for more infrequent dosing may provide an alternative for patients to determine how their disease is managed. An IV formulation also may be preferable for neurologists for a number of reasons, including enabling better monitoring of treatment. Neurologists have access to IV delivery infrastructure, including infusion centers, which they currently use to deliver therapies for diseases such as multiple sclerosis.

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Clazakizumab

Clazakizumab is a humanized monoclonal antibody that binds to and inhibits IL-6. IL-6 is an important driver of the inflammatory response and is implicated in the transition from acute to chronic inflammation. Chronic inflammation is a notable feature of several diseases, including RA, PsA and CKD. IL-6 is implicated in the pathogenesis of RA as it has been shown to be the main driver that stimulates the immune system to increase tissue destruction and joint damage. IL-6 also drives the systemic symptoms in RA patients, which include flu-like symptoms such as malaise and fatigue. Targeting IL-6 is an established approach for the treatment of RA as evidenced by the use of Genentech’s Actemra for this patient population.

Rheumatoid Arthritis

RA is a chronic inflammatory disorder that principally attacks joints. Approximately 2.4 million patients, predominantly women, suffer from RA in the United States. RA affects the lining of joints, causing a painful swelling that can eventually result in bone erosion and joint deformity. It also leads to stiffness and redness in the joints. RA may also have general effects such as fatigue and cause damage to organs, such as the lungs and the cardiovascular system. Uncontrolled RA also is associated with substantial morbidity and mortality.

We estimate that global sales of RA therapies was more than $12 billion in 2012 and will grow to $15 billion by 2016.

Current Therapies

Methotrexate, or MTX, is an immunosuppressive drug initially developed for cancer and was approved for treatment of RA in 1988. MTX continues to play a role in first-line therapy for the approximately 50% of RA patients who initially respond to MTX, even though it is associated with side-effects including nausea, abdominal pain and serious lung and liver toxicities. A major advancement in treatment of RA began in 1998 with the approval of the first biologic therapy. Biologic therapies involve the use of antibodies or other proteins produced by living organisms to treat disease and represent a significant improvement in patient care. Biologic therapy of RA is currently dominated by the anti-TNF class, which, when administered in combination with MTX, reduces inflammation and structural damage to the joints. There is increasing recognition that treating patients with biologic therapy early on in the course of their disease delays irreversible structural damage to joints. Since anti-TNFs came on the market, their utilization has increased and they have changed the treatment paradigm for RA.

Current Treatment Paradigm. Anti-TNFs are currently the standard of care for first- and second-line biologic therapies for RA patients who have an inadequate response to MTX alone. Anti-TNFs are often prescribed in combination with MTX for those inadequate responders who are able to tolerate MTX. Anti-TNFs have shown benefit in reducing both symptoms of RA and joint destruction. However, there is a significant need for therapies that deliver a greater degree of efficacy than anti-TNFs, given both the debilitating symptoms and irreversible joint damage caused by RA. Approximately one-third of RA patients do not adequately respond to anti-TNFs and are typically referred to as anti-TNF inadequate responders. In addition, anti-TNFs are associated with low rates of disease remission and the response to these agents is not typically durable. As a result, anti-TNFs lead to therapeutic cycling, where an anti-TNF inadequate responder is switched to another anti-TNF. A significant

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number of patients treated with an anti-TNF will be cycled to their second and third anti-TNF within 24 months of anti-TNF therapy initiation. Therapeutic cycling is a serious issue for patients because the efficacy of each successive drug is not known typically for several months, which contributes to progression of disease and continued irreversible structural joint damage. The ACR recently recommended a higher goal for treatment of RA that focuses on achieving remission or if remission cannot be achieved, low disease activity.

Other New Therapies. Genentech’s Actemra, an anti-IL-6 receptor antibody, BMS’s Orencia, a CTLA4Ig Fc fusion protein, Biogen Idec and Genentech’s Rituxan, an anti-CD20 antibody, and Pfizer’s tofacitinib, an oral JAK kinase inhibitor, are all approved for use in RA patients. All except tofacitinib, which was recently approved in November 2012, have reported annual sales of approximately $900 million or greater. They all may be used as second-line or third-line therapies in the TNF inadequate responder population. Orencia was recently shown to be non-inferior to Humira in terms of ACR20 efficacy in a head-to-head trial, which may drive more use as first-line biologic therapy. Based on reported sales, tofacitinib has had low uptake to date, which we believe is due in part to its safety profile, and it was rejected at all dose levels by the European Medicines Agency.

Future Treatment Paradigm. Unlike the approach taken by the other biologic therapies under development for the anti-TNF inadequate responders, BMS is seeking to position Clazakizumab as an option for first-line biologic therapy for RA. We believe that a new biologic therapy that demonstrates superior disease control to an anti-TNF and has strong durability presents an opportunity to change the current treatment paradigm to one of first-line use of biologics that have the potential to stop disease progression in more patients. The following diagram depicts the current and our anticipated future treatment paradigm of treating patients with a goal of achieving remission or lowest possible disease activity.

Measurements of RA Disease. The severity of RA disease can be assessed using several indices as recommended by ACR: the ACR criteria, the DAS28 and the CDAI.

The ACR criteria measures improvement in tender or swollen joint counts and includes other parameters which take into account the patient’s and physician’s assessment of disability. These clinical disease activity parameters are combined to form composite percentages of clinical response that are known as ACR20, ACR50, and ACR70. An ACR20 score represents a 20% improvement in these criteria and is considered a modest improvement in a patient’s disease. The ACR20 is currently the regulatory bar by which new therapeutics in RA are approved by the FDA. An ACR50 score and ACR70 score represents a 50% and 70% improvement in the clinical response criteria, respectively, and are considered evidence of clinically meaningful improvements in a patient’s disease. We believe physicians are looking for agents which deliver at least an ACR50 or ACR70 level of benefit to their patients.

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Two other highly discriminating scoring systems for RA include the Disease Activity Score, or DAS, and the Clinical Disease Activity Index, or CDAI. As with the ACR score, both the DAS28-CRP and the CDAI are composite indices that quantify a patient’s degree of improvement. The DAS provides a number between zero and 10, indicating how active the RA is at that moment. A patient who has a DAS28-CRP score of less than 2.6 is considered to have achieved disease remission. The CDAI has range from 0 to 76. A patient is considered to be in CDAI remission if they have a CDAI score of equal to or less than 2.8. With each measure, remission means the patient experiences little or no disease activity and is the ultimate objective for every RA patient.

Today the efficacy bar for treatment success is moving: rather than being satisfied with modest improvements in disease activity, such as an ACR20, the ACR has set low disease activity and remission as the new target for RA therapies. These more stringent outcomes can be assessed using newer measures such as ACR70, DAS28-CRP remission and CDAI remission.

Comparative Efficacy. We believe the current approved anti-TNFs and non-anti-TNFs have demonstrated in clinical trials, broadly, similar efficacy based on ACR and DAS28 scores, when used in combination with MTX, which is standard of care. The following table compares data from representative anti-TNFs, the leading non-anti-TNF, Orencia and the only approved IL-6 agent, Actemra.

Response and Remission Rates in Methotrexate Inadequate Responders at Six Months (Placebo + MTX Response in Brackets)
		Response Rates (%)			Remission Rates (%)
		ACR20	ACR50	ACR70	DAS28 <2.6
Representative Approved Anti-TNFs	Humira + MTX	68 (39)	49 (18)	19 (7)	23.7
	Remicade + MTX	59 (42)	37 (20)	24 (9)	25.2
	Enbrel + MTX	71 (27)	39 (3)	15 (0)	30
Representative Approved Non-anti-TNFs	Orencia + MTX	68 (40)	40 (17)	20 (7)	Not Reported
	Actemra + MTX (anti-IL-6R)	59 (27)	44 (11)	22 (2)	16.3

Our Solution

Together with BMS, we believe there is an opportunity to position Clazakizumab as an option for first-line biologic therapy for the treatment of RA by demonstrating superior disease control rates versus a biologic standard of care in Phase 3 trials. In the completed Phase 2b clinical trial, the ACR70 and rates of disease remission of Clazakizumab and Humira were:

			Remission Rates (%)
	ACR70 (%)		DAS28-CRP < 2.6		CDAI £2.8
Clazakizumab 25mg + MTX		27.1		49.2		15.3
Clazakizumab 100mg + MTX		38.3		41.7		20.0
Clazakizumab 200mg + MTX		30.0		41.7		20.0
Humira + MTX		18.6		23.7		8.5

ACR70 and remission rates were not specified as primary endpoints in the Phase 2b trial so an additional trial would be needed to confirm these findings.

We believe demonstrating superior disease control rates for Clazakizumab versus a biologic standard of care in a head-to-head trial would be valued by physicians who are choosing the best first-line RA therapy for their patients.

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Other IL-6 Inhibitors in Development

There have been two main approaches to targeting IL-6 biology, targeting the ligand or the receptor. Clazakizumab targets the ligand. Because the concentration of IL-6 receptor is 1000-fold higher than the ligand, we believe by targeting the ligand we may be able to disrupt IL-6 biology by administering relatively low levels of drug.

Late Stage IL-6 Inhibitors

Compound	Company	Target	Formation	Dosing	Stage of Development	Usage	Clinical Program
Sarilumab	Regeneron / Sanofi	Receptor	Subcutaneous	Q2 week	Phase 3	With MTX	DMARD-IR and Second-line after anti-TNF
Sirukumab	Janssen J&J / GSK	Ligand	Subcutaneous	Q2 week / Q4 week	Phase 3	With MTX	DMARD-IR and Second-line after anti-TNF and monotherapy
Clazakizumab	BMS	Ligand	Subcutaneous	Q4 week	Phase 2b	With MTX	First-line and DMARD-IR

Clinical Trials

To date, an aggregate of nine human clinical trials of Clazakizumab have been conducted or initiated by BMS and us, collectively involving over 1,000 patients, including Phase 1 and Phase 2 trials in healthy volunteers and patients with RA, PsA and cancer. In general, the safety profile of Clazakizumab has been the same or better than other RA therapies and is consistent with the known pharmacology of an IL-6 inhibitor. We believe these trials have also demonstrated that Clazakizumab has the potential to be superior to Humira.

Completed Phase 2b Clinical Trial in RA. BMS has completed a randomized, double-blind, placebo-controlled, dose-ranging trial including Humira as an active comparator. Approximately 418 patients were randomized to one of seven treatment arms: five Clazakizumab doses (three in combinations with MTX, two monotherapy), placebo in combination with MTX, and Humira in combination with MTX. Patients were dosed monthly for 24 weeks with a 24 week extension and open-label extension as well at a common fixed dose. Patients randomized to Clazakizumab monotherapy received MTX after week 24. The primary objective of the trial was to compare the efficacy of Clazakizumab versus placebo on a background of MTX as assessed by ACR20 response rates.

The trial met the primary endpoint with a greater proportion of patients achieving an ACR20 response at week 12 in all Clazakizumab treatment arms as compared to placebo, in combination with MTX. At week 24, all Clazakizumab treatment groups and the Humira treatment group had numerically higher percentage of patients achieving an ACR20, ACR50 and ACR70 score. In addition, remission rates as judged by a DAS28-CRP score < 2.6 or CDAI score £ 2.8 were numerically favorable to placebo in all treatment groups.

Response Rates and Remission Rates in BMS’s Phase 2b Trial at 24 Weeks

	Number of Patients		Response Rates(%)						Remission Rates(%)
Treatment Arm			ACR20		ACR50		ACR70		DAS28- CRP < 2.6		CDAI £ 2.8
Placebo + MTX		61		39.3		18.0		6.6		13.1		1.6
Claza 25 mg + MTX		59		83.1		47.5		27.1		49.2		15.3
Claza 100 mg + MTX		60		63.3		45.0		38.3		41.7		20.0
Claza 200 mg + MTX		60		66.7		43.3		30.0		41.7		20.0
Claza 100 mg + placebo		60		58.3		36.7		16.7		28.3		6.7
Claza 200 mg + placebo		59		57.6		33.9		25.4		35.6		6.8
Humira + MTX		59		67.8		49.2		18.6		23.7		8.5

The safety profile of Clazakizumab at 24 weeks exhibited rates of adverse events that were similar across all Clazakizumab arms (ranging from 83.1% to 96.7%), compared to 59% and 74.6% for the MTX and Humira

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arms, respectively. The rates of serious adverse events, or SAEs, ranged from 8.3% to 13.6% in the Clazakizumab arms versus 3.3% for MTX and 5.1% for Humira + MTX. The most frequent SAEs were serious infections. Rates of serious infections ranged from 1.7% to 5.1% in the Clazakizumab arms versus 0% for MTX and 3.4% for Humira + MTX. Additionally, the Clazakizumab arms exhibited increases in mean total cholesterol without changes in HDL/LDL ratio, increases in hemoglobin, increases in liver function tests and decreases in neutrophils, a type of white blood cell, and platelets, which are expected from IL-6 inhibition.

Completed Phase 2a Clinical Trial in RA. Efficacy and remission rates of Clazakizumab in the Phase 2a trial conducted by us and the Phase 2b trial conducted by BMS are consistent. In addition, the safety profile for Clazakizumab in both trials was consistent. Prior to our collaboration agreement with BMS, we assessed the clinical efficacy of Clazakizumab in moderate to severe RA in a parallel-group, double-blind, randomized, placebo-controlled, 16 week trial. Clazakizumab was administered intravenously in patients with active RA with an inadequate response to MTX. A total of 132 patients were enrolled, of which 127 received at least one dose of trial drug and 116 received two doses of trial drug. Patients were randomized to receive two intravenous infusions of Clazakizumab 80, 160, 320 mg or placebo on day one and at week eight. In all treatment groups, patients continued to take a stable dose of MTX. The demographic and other baseline characteristics were balanced across treatment groups. The trial met the primary endpoint with a greater proportion of patients achieving an ACR20 response at week 12, with 81.3%, 70.6%, and 82.1% of patients in the Clazakizumab 80, 160, and 320 mg groups, respectively, compared with 27.3% in the placebo group (p>0.0005 for each comparison to placebo). A greater proportion of patients in the Clazakizumab groups compared with placebo also achieved ACR50 and ACR70 responses. Furthermore, there were additional incremental increases in ACR50 and ACR70 response rates between weeks 12 and 16. In this trial, the “p” values were statistical calculations to determine whether the effects of Clazakizumab were significant in comparison to placebo based on pre-specified statistical targets. We specified that any result less than p=0.05 would be significant.

Response Rates and Remission Rates in Our Phase 2a Trial at 16 Weeks

	Number of Patients		Response Rates(%)			Remission Rates(%)
Treatment Arm			ACR20	ACR50	ACR70	DAS28- CRP < 2.6
Placebo + MTX		33	36	15	6	0
Claza 80 mg IV every 8 wks + MTX		32	75 (p=0.0026)	41 (p=0.028)	22 (p=0.082)	13.8 (p=0.002)
Claza 160 mg IV every 8 wks + MTX		34	65 (p=0.028)	41 (p=0.029)	18 (p=0.258)	28.1 (p=0.0001)
Claza 320 mg IV every 8 wks + MTX		28	82 (p=0.005)	50 (p=0.005)	43 (p=0.0015)	44 (p=0.0001)

Ongoing Clinical Trials in RA. BMS is conducting a Phase 2b, dose-ranging clinical trial of Clazakizumab designed to determine the safety and efficacy of Clazakizumab in RA patients who are anti-TNF inadequate responders. Approximately 140 patients taking background MTX will be enrolled and randomized to one of four dose groups: 1, 5, 25 mg Clazakizumab or placebo. Patients will receive monthly subcutaneous injections. The primary objective of the trial is to compare the efficacy of Clazakizumab plus MTX in reducing signs and symptoms of RA as assessed by change in the baseline DAS28-CRP at 12 weeks of treatment. Subject to successful completion of this clinical trial, we anticipate that BMS would plan to initiate Phase 3 clinical trials with Clazakizumab. We filed an IND for Clazakizumab in November 2008, which was subsequently transferred to BMS. BMS filed an IND for Clazakizumab in May 2011. Both INDs remain active.

Other Indications

We believe that Clazakizumab has the potential for further development as a therapeutic agent for one or more additional diseases where high levels of IL-6 are believed to play a role, such as PsA and CKD. Pursuant to

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our agreement with BMS, responsibility for all clinical and other product development activities and for manufacturing Clazakizumab outside of cancer has been transferred to BMS.

Psoriatic Arthritis. PsA is a form of arthritis that affects some people who have psoriasis, a skin condition characterized by red patches of skin topped with silvery scales. PsA often strikes earlier in life than RA, affecting patients as early as their 20s. Most PsA patients have concurrent joint pain, stiffness and swelling, as well as skin lesions. PsA is clinically distinct from RA, but causes similar significant morbidity and mortality. Despite the relatively small PsA incidence, the worldwide sales of PsA biologic therapies totaled $1.7 billion in 2011, with anti-TNFs representing 89% of the market. By contrast to RA, there are only three anti-TNF therapies approved for the treatment of PsA: Enbrel, Humira and Simponi. Anti-TNFs are ineffective for approximately 33% of PsA patients and an additional 20% of PsA patients become anti-TNF inadequate responders over time, resulting in therapeutic cycling and joint destruction. PsA patients have fewer options for follow-on treatment than RA patients.

BMS is conducting a Phase 2b, dose-ranging clinical trial of Clazakizumab in PsA that is designed to determine the safety, efficacy and dose response of Clazakizumab in patients with active PsA who have had an inadequate response to nonsteroidal anti-inflammatory drugs and non-biologic disease-modifying anti-rheumatic drugs, or DMARDs. Approximately 150 patients taking a stable dose of background MTX are being randomized to one of four dose groups: 25, 100, or 200 mg Clazakizumab or placebo. Patients receive monthly subcutaneous injections for six months. The primary objective of the trial is to compare the efficacy of Clazakizumab in reducing the signs and symptoms of PsA as assessed by ACR20 response rates. BMS initiated the trial in December 2011 and expects to present data from the trial by December 2014.

Chronic Kidney Disease. CKD refers to a disease characterized by progressive and irreversible decline of renal function. In the United States, there are 26 million adults who have CKD. In CKD, chronic inflammation and IL-6 play an important destructive role in the disease. High levels of IL-6 have been used as a predictor of disease severity. The National Institutes of Health is planning a trial to investigate Clazakizumab in CKD patients.

Other Prior Clinical Trials. We have completed five clinical trials in cancer indications where tumors secrete high levels of IL-6, which may promote resistance to treatment, increase the rate of metastatic spread, and lead to anemia, fatigue and weight loss. One hundred ninety-eight patients have received at least one dose of Clazakizumab in these trials. Clazakizumab has a safety profile in cancer patients comparable to the safety profile in the auto-immune patients studied to date. We currently hold an IND for Clazakizumab for the treatment of cancer, which was submitted in October 2010 and is inactive. Due to our prioritization of our ALD403 program, we are not currently pursuing further development of Clazakizumab in cancer at this time. We may resume development of Clazakizumab in cancer indications in the future.

Preclinical Pipeline

We are actively working to expand our antibody therapeutic pipeline in opportunities where our technology provides favorable development advantage in areas of unmet medical need, seeking both first-in-class and best-in-class therapeutics. We prioritize targets that meet the criteria of either genetic validation or clinical demonstration that they play a central role in the disease state. We are currently evaluating four programs with the view of advancing at least one candidate into the clinic in 2015. These potential candidates represent diverse opportunities in indications that may be eligible for orphan designations and/or indications where monoclonal antibodies have not previously played a role in the treatment paradigm such as our ALD403 program for migraine prevention.

Technology Platform

We have developed a proprietary antibody platform to select antibodies that not only maximizes efficacy, but also speed of onset and durability of therapeutic response. In addition, our ability to efficiently manufacture antibodies allows us to target diseases that traditionally have not been addressed by antibodies. Our antibody platform accomplishes this by utilizing three technologies:

• ABS, which allows us to discover antibodies that are optimized for therapeutic efficacy;

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• rabbit humanization, which allows us to limit side-effects and maximize durability; and

• MabXpress, which allows us to efficiently and reproducibly manufacture large quantities of antibodies.

We also believe these technologies allow us to address a number of critical development priorities early, thereby reducing our development cost and timeline.

Antibody Discovery and Candidate Selection Technology

Antibodies are produced by the immune system in humans and other warm-blooded animals. They are naturally generated to help defend and protect from disease and infections. Antibodies are produced and secreted by specialized antibody producing cells called B cells. Traditionally, rodents have been used as the source of therapeutic antibodies. To find these antibodies, we remove the B cells from the spleen and fuse to a cancer cell. The combined cancer and B cell, or a “hybridoma,” is able to live longer than normal B cells would alone. Generally, this process has trouble recovering the desired therapeutic antibody due to its low efficiency. Collectively this limits the ability to identify high-quality antibody therapeutics with optimal therapeutic properties.

We discover all of our product candidates in-house with a technology we call ABS. As a precursor to discovery, we choose to target freely-circulating proteins, such as ligands, which are critical to the disease biology and are part of well understood disease pathways. We believe this strategy can lead to fewer drug doses at lower concentrations, while potentially minimizing off target activity and associated side-effects. The clinical relevance of these proteins is highly validated by prior scientific or clinical research.

Our ABS technology has been successfully applied to a wide cross section of therapeutic targets that range from small biologically active peptides to more traditional monoclonal antibody targets. ABS allows us to rapidly evaluate all the B cells in a host and identify the key subset of cells that produce the antibody responsible for the desired therapeutic effect. We believe one of our competitive advantages is our proprietary method to keep these B cells alive while we exhaustively screen them. This is an iterative process that allows us to identify the rare antibodies that possess the ideal qualities needed to be a successful therapeutic, for example manufacturability, therapeutic stability, durability and favorable safety.

Our Antibody Selection Process

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Our ABS technology has been applied in all our preclinical and clinical programs and led to the selection of our two lead product candidates, ALD403 and Clazakizumab. We also use our ABS technology to provide bio-analytical support for all our product candidates in the clinic.

Antibody Humanization and Therapeutic Design

Antibodies derived from non-human sources elicit a natural rejection response, and if left unchanged when injected into humans, are removed rapidly and quickly lose their therapeutic effect. Common sources of antibodies include mice and rats, which have antibodies that are structurally different from humans and need to be altered to be more human-like.

Historically it is a complex and difficult undertaking to convert rodent antibodies into human therapeutics that retain all the original rodent antibody properties. This is a highly iterative process that is both time and labor intensive and is fraught with significant failure.

We have pioneered the use of rabbit antibodies as the starting materials for our product candidates. Compared to rodent antibody humanization, our rabbit antibody humanization results in more human-like antibodies that maintain their original properties and are faster to produce. As a result, our process requires fewer iterations to complete humanization. Using our proprietary technology, we consistently generate antibody therapeutics that are greater than 95% human in terms of their sequence content. However, unlike fully-human antibodies, we specifically design our antibodies to lack certain sugars in order to further minimize the body’s recognition of such antibodies as foreign, thereby limiting infusion reactions, as well as maximizing durability of the therapeutic response. Our technology results in product candidates that are well-tolerated by patients.

MabXpress Protein Expression

Historically, commercial manufacturing of large molecule proteins has posed a number of significant challenges. In particular, the ability to efficiently, from a time and cost perspective, manufacture biologics has been a bottleneck to the development and successful commercialization of these types of molecules. Furthermore, these inefficiencies have created a barrier to the use of biologics for certain therapeutics. We express complex molecules like monoclonal antibodies in a simple microorganism with our technology we call MabXpress. MabXpress addresses the previous inefficiencies in manufacturing, which we believe may allow us to target diseases that traditionally have not been addressed by antibodies.

MabXpress is based on the expression of recombinant polypeptides including antibodies in diploid Pichia pastoris host yeast strains. Recombinant polypeptides are manipulated forms of natural proteins generated through the use of various molecular techniques to produce large quantities of proteins. Pichia pastoris has been widely used in commodity production, such as Purafine, a product that is commonly used in waste water treatment. Pichia pastoris yields rapid production cycles, excellent scale-up characteristics and success in production runs at up to 160,000 liters scale. This yeast strain is currently used to produce non-antibody therapeutic proteins approved by the FDA, and which may provide an established framework for regulatory approval for our product candidates.

We employ MabXpress to produce our product candidates, because it offers distinct time, scale and viral clearance advantages over traditional mammalian cell culture approaches, such as Chinese Hamster Ovary, or CHO, as depicted in the table below.

Production Advantages of Using MabXpress

Characteristics	Pichia Pastoris	CHO
Cell line manufacture and release	Up to 1 month	6-9 months
Fermentation cycle time	5-7 days	15-30 days
Maximum scale of production	Up to 160,000 liters	Up to 25,000 liters
Viral clearance and validation of viral clearance	Not Applicable	3-6 months

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We have pioneered the use of this yeast to produce full-length therapeutic antibodies, which are the core products of our business. The purification process makes use of industry standard methods, and has been scaled to a commercial level for Clazakizumab. These antibodies have been engineered to enhance the fundamental properties of the product candidate. The process results in antibody products which are similar from lot to lot and we specifically design our antibodies to lack certain sugars in an effort to minimize the body’s recognition of such antibodies as foreign, and to improve product half-life thereby limiting infusion reactions as well as maximizing durability of the therapeutic response.

During product candidate selection, we consider manufacturing attributes including efficiency, product stability, homogeneity and scalability to commercial levels. We also select multiple back up antibodies all compatible with the final product candidate profile. This supports rapid and successful delivery of product candidate supply and if an unforeseen production or stability problem emerges, we are able to more efficiently transition to an alternate antibody. We have successfully implemented MabXpress in multiple contract manufacturing facilities throughout the world. Upon successful transfer and subject to availability, our contract manufactures’ facilities can execute production runs in days compared to the weeks required by traditional mammalian production.

Collectively, our proprietary technologies enable rapid progression into human clinical trials. We were able to bring each of our two product candidates, ALD403 and Clazakizumab, from discovery initiation against the disease target to dosing of patients in clinical trials in 20 months.

Intellectual Property

Our success will significantly depend upon our ability to obtain and maintain patent and other intellectual property and proprietary protection for our product candidates and antibody platform. For the specific antibody product candidates in all of our programs, we seek to protect the candidate antibody and variants thereof, compositions containing the antibody, methods of manufacturing the antibody, and the use of the antibody in treating human disease conditions where we or BMS are actively pursuing, or contemplate pursuing regulatory approval permitting the marketing of the antibody for use as a human therapeutic agent. In addition to pursuing patent protection for our key technologies, we rely upon unpatented trade secrets, know-how and continuing technological innovation to develop and maintain our competitive position.

We seek to protect our proprietary information, in part, by using confidentiality agreements with our collaborators, employees and consultants and invention assignment agreements with our employees and selected consultants. Despite these measures, any of our intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated, or such intellectual property and proprietary rights may not be sufficient to permit us to take advantage of current market trends or otherwise to protect competitive advantages. For more information, see the section of this prospectus titled “Risk Factors—Risk Related to Intellectual Property.”

Clazakizumab

Our patents and patent applications relating to Clazakizumab have been broadly filed worldwide. Many of these applications have issued in the United States and other countries and will expire between 2028 and 2031, or later if patent term extension applies.

We hold one U.S. patent with granted claims directed to the Clazakizumab antibody and compositions containing the Clazakizumab antibody. This patent will expire in 2028 or later if patent term extension applies.

We hold one U.S. patent with granted claims directed to nucleic acids encoding Clazakizumab and methods of use thereof to produce this antibody. This patent will expire in 2028.

We hold nine U.S. patents with granted claims broadly or specifically directed to the use of Clazakizumab and variants thereof, alone or in combination, to treat or prevent human disease conditions associated with elevated IL-6. These patents will expire between 2028 and 2030, or later if patent term extension applies.

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ALD403

Our patent applications relating to ALD403 have also been broadly filed worldwide. If these applications issue as patents, they are estimated to expire in 2032.

We own, or co-own with exclusive rights, three patent families related to ALD403. Each family contains one pending U.S. patent application, one international (PCT) application, and various foreign counterpart applications with claims directed to compositions and methods of using ALD403 and variants thereof, alone or in combination to treat or prevent various human diseases and conditions associated with elevated CGRP. Patents based on these applications, if granted, are expected to expire in 2032.

We have full ownership of the first ALD403 patent family, which relates to ALD403 compositions and methods for treating or preventing various human disease conditions associated with elevated CGRP.

We are the co-owner and exclusive licensee of the second ALD403 patent family, which relates to ALD403 compositions and methods for treating or preventing various human disease conditions associated with photophobia or light aversion.

We are the co-owner and exclusive licensee of the third ALD403 patent family, which relates to ALD403 compositions and methods for treating or preventing various other human disease conditions associated with diarrhea.

Technologies

We hold two U.S. patents; one allowed U.S. patent application and numerous foreign patents related to MabXpress. Our MabXpress patents and patent applications relate to the expression of heteropolymeric polypeptides, such as antibodies, in Pichia. These patents will expire between 2024 and 2026.

We have sought patent protection for our antibody discovery method, of which four foreign patents have been granted, and one pending U.S. application and seven foreign applications are under examination. These foreign patents will expire in 2027. A patent based on the U.S. application, if issued, is expected to expire in 2027.

We also have sought patent protection for our proprietary method of humanizing rabbit antibodies. Three of these patents have been granted in foreign territories and two U.S. and thirteen pending foreign patent applications are under examination. These foreign patents will expire in 2028. Patents based on the U.S. applications, if issued, are expected to expire in 2028. Patents based on the foreign applications, if issued, are expected to expire between 2028 and 2032.

We also hold one granted U.S. patent claiming a yeast promoter sequence useful in the MabXpress technology. This patent will expire in 2027.

Early Stage Programs

All programs where there is a potential at a later stage to transition into clinical candidate nomination are covered by pending U.S. (non-provisional or provisional), international (PCT) or directly filed foreign patent applications. There are currently 12 U.S. patent applications that support these programs, and in some instances corresponding PCT and/or foreign counterpart applications have been filed.

Technology Licenses

Keck Graduate Institute of Applied Life Sciences

In October 2004, we entered into a license agreement with Keck Graduate Institute of Applied Life Sciences, or Keck, under which we obtained an exclusive, worldwide license to Keck’s patent rights in certain inventions, or the Keck patent rights, and technology or the Keck technology, related to production and optimization of antibodies in yeast, including certain patents relating to our ABS and MabXpress technologies. Under the license agreement, we are permitted to research, develop, manufacture and commercialize products

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utilizing the Keck patent rights for all research and commercial uses, and to sublicense such rights. Keck retained the right, on behalf of itself and other non-profit institutions, to use the Keck patent rights and Keck technology for educational and research purposes and to publish information about the Keck patent rights and to further use the Keck technology for purposes other than production and optimization of antibodies in yeast.

In consideration for the rights granted to us under the license agreement, we issued Keck an aggregate of 220,000 shares of our common stock. As additional consideration, we are required to pay an annual license maintenance fee during the term of the agreement.

The license agreement requires that we use commercially reasonable efforts to develop and commercialize one or more products that are covered by the Keck patent rights. We may terminate the license agreement upon 30 days’ notice to Keck. Either party may terminate the license agreement in the event of material breach of the license agreement which remains uncured after 90 days of receiving written notice of such breach. Absent early termination, the license agreement will automatically terminate on a country-by-country basis upon the expiration date of the longest-lived patent right included in the Keck patent rights.

Other

We also license intellectual property from certain other parties that we believe to be useful for the conduct of our business and may enter into additional license agreements in the future.

Collaboration Agreement with Bristol-Myers Squibb

In November 2009, we entered into a collaboration agreement with BMS. Under the terms of the agreement, BMS received an exclusive worldwide license for any human or animal use of Clazakizumab other than for cancer, and has agreed to use diligent efforts to develop Clazakizumab for at least one indication in the United States, one of the five major countries in Europe, and Japan and to commercialize Clazakizumab in each of these countries subject to regulatory approval in them. We do not have any obligation to fund any of these BMS activities. Pursuant to the agreement, we received a $85.0 million upfront payment and an aggregate of $18.5 million milestone payments from BMS.

As additional consideration, we may become eligible to receive up to approximately $746 million in additional milestone payments if certain development and regulatory milestones are achieved by BMS for Clazakizumab across multiple indications. If Clazakizumab is successfully commercialized, BMS is obligated to pay us tiered royalties starting in the mid-teens up to 20%, depending upon the volume of Clazakizumab sales, and subject to certain reductions tied to patent expiration, and up to $500 million if certain sales-based milestones are achieved. Milestone payments are triggered upon the initiation of clinical trials or the completion of various stages of the regulatory approval process for each of the first three indications for Clazakizumab, with reduced milestone payments if achieved by certain backup antibodies to Clazakizumab, with the final milestones reached upon approval in the United States, three major European markets, and Japan. Royalties for Clazakizumab will continue on a country-by-country basis during the term of our or BMS’s patent rights in such country that are applicable to Clazakizumab and may extend beyond the expiration of such patents, depending on the timing of patent expiration relative to product launch.

Unless earlier terminated, the agreement continues in effect until the expiration of BMS’s royalty payment obligations. BMS may terminate the agreement without cause in its entirety, or on a region-by-region basis, upon four months advance written notice prior to regulatory approval of Clazakizumab in such region, or six months advance written notice after regulatory approval in such region. In addition, BMS may terminate the agreement in its entirety upon written notice if BMS has a safety concern regarding Clazakizumab. Either party may terminate on a region-by-region basis for the other party’s material breach of the agreement which is not cured by the end of the applicable cure period, which period is 30 days for a payment breach by BMS, six months for a diligence efforts breach by BMS and 90 days for all other material breaches by either party. In the event of termination by us for material breach by BMS or termination by BMS without cause, BMS would be required to transfer to us certain clinical data and regulatory materials related to Clazakizumab, use diligence efforts to provide us with an interim supply of Clazakizumab and grant to us a limited, exclusive license to BMS’s patent

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and other intellectual property rights pertaining to Clazakizumab. In such event, we would be required to pay to BMS a low single to mid single digit royalty on net sales depending on development stage at the time of such termination.

We retain worldwide rights to develop and commercialize Clazakizumab in cancer, subject to BMS’s option to co-develop Clazakizumab for cancer and commercialize Clazakizumab outside the United States. Although we have completed five clinical trials in cancer indications to date, we have suspended further development of Clazakizumab in cancer due to prioritization of our ALD403 program.

Under the agreement, we also granted BMS the option to purchase shares in this offering at the offering price up to the lesser of $20 million and 20% of the total number of shares being offered. If BMS does not exercise this option, then BMS is required to purchase the same number of shares in a private placement that is consummated concurrent with this offering, subject to certain conditions.

Manufacturing

We have adopted a manufacturing strategy of contracting with a variety of contract manufacturing organizations, or CMOs, within North America and Europe for the manufacture of ALD403 and future product candidates. This has enabled us to produce products under Good Manufacturing Process, or GMP, controls for our completed and planned clinical trials. A protocol of methods has been established at these manufacturers along with specific testing facilities to generate sufficient information to inform the appropriate regulatory authorities. We anticipate there will be continued interaction with additional CMOs as our product candidates advance and we seek to expand our access to larger production facilities to supply clinical trials and commercialization. We have identified multiple CMOs that we believe would be capable of implementing and validating the manufacturing process for ALD403.

Competition

The development and commercialization of new therapeutic products is highly competitive. Our success will be based in part on our ability to identify, develop and manage products that are safer, more efficacious and/or more cost-effective than alternative therapies. We face competition with respect to our current product candidates, and will face competition with respect to product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of biosimilar products, which are expected to become available over the coming years. Many of our competitors are large pharmaceutical companies that will have a greater ability to reduce prices for their competing drugs in an effort to gain market share and undermine the value proposition that we might otherwise be able to offer to payors.

Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. Many of these competitors are attempting to develop therapeutics for our target indications.

ALD403

ALD403, if approved, will compete with beta blockers that are approved for prevention of high frequency and chronic migraine such as topiramate, marketed by Johnson & Johnson, propranolol, marketed by Wyeth, and sodium valproate, marketed by Divalproex. In addition, Botox, marketed by Allergan, is approved for the prevention of chronic migraine and commonly prescribed for high frequency migraine. We are also aware of several CGRP inhibiting therapies currently in development that could compete with ALD403, including therapies using antibodies similar to ALD403 that are being developed by Amgen, Lilly and Labrys. Furthermore, even though not as effective in treating high-frequency and chronic migraine, patients may be satisfied using cheaper generic abortive medications such as triptans, which could limit ALD403 market penetration in the migraine prevention marketplace.

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Clazakizumab

Clazakizumab, if approved, will compete with other biologic therapies including anti-TNFs and non-anti-TNFs. Anti-TNFs include Humira, marketed by AbbVie, Enbrel, marketed by Amgen, and Remicade, marketed by Johnson & Johnson. Non-anti-TNFs include Orencia, a CTLA4Ig Fc fusion protein, marketed by BMS and Actemra, an IL-6 inhibitor, marketed by Genentech. In addition, we are aware of several other IL-6 therapies currently in development including Sarilumab which is being developed by Regeneron and Sanofi, and Sirukumab which is being developed by Johnson & Johnson and GSK. Unless BMS is able to demonstrate superior disease control to a biologic standard of care and position Clazakizumab as an option for first line biologic therapy, it will face significant competition in an increasingly crowded biologic therapy market. In addition, we expect that by the time Clazakizumab could enter the marketplace, there may be several anti-TNF biosimilars on the market. The entry of such products could potentially put pricing and access pressures on Clazakizumab.

The commercial opportunity for ALD403 or Clazakizumab could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, more convenient or less expensive than our product candidates or any other product candidate that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours. In addition, our ability to compete may be affected because in many cases insurers or other third-party payers seek to encourage the use of generic products.

We believe that ALD403 and Clazakizumab have potential benefits over these competitive products as described in more detail under “—Product Candidates—ALD403—Current Therapies” and “—Product Candidates—Clazakizumab—Current Therapies.” As a result, we believe that ALD403 and Clazakizumab should be well placed to capture market share from competing products if approved. However, even with those benefits, ALD403 and Clazakizumab may be unable to compete successfully against these products. See “Risk Factors — Risks Related to Our Business and the Development and Commercialization of Our Product Candidates.”

Government Regulation

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the clinical development, manufacture and marketing of biopharmaceutical products. These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, import, export, safety, effectiveness, labeling, storage, distribution record keeping, approval, advertising and promotion of our products.

The process required by the FDA before product candidates may be marketed in the United States generally involves the following:

• submission of an investigational new drug application, or IND, which must become effective before clinical trials may begin;

• adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

• pre-approval inspection of manufacturing facilities for their compliance with current Good Manufacturing Practices, or cGMP, and selected clinical investigations for their compliance with Good Clinical Practices; and

• FDA approval of a Biologics License Application, or BLA, to permit commercial marketing for particular indications for use.

The testing and approval process requires substantial time, effort and financial resources. Prior to commencing the first clinical trial with a product candidate, we must submit an IND to the FDA. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time

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period, raises safety concerns or questions about the conduct of the clinical trial by imposing a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Submission of an IND may not result in FDA authorization to commence a clinical trial. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development. Furthermore, an independent institutional review board for each medical center proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial commences at that center. Regulatory authorities or an institutional review board or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk. Some studies also include a data safety monitoring board, which receives special access to unblinded data during the clinical trial and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

• Phase 1—Studies are initially conducted to test the product candidate for safety, dosage tolerance, absorption, metabolism and distribution.

• Phase 2—Studies are conducted with groups of patients with a specified disease or condition to provide enough data to evaluate the preliminary efficacy, optimal dosages and dosing schedule and expanded evidence of safety. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

• Phase 3—Clinical trials are undertaken in large patient populations to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety in an expanded patient population at multiple clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product approval.

• Phase 4—The FDA may require, or companies may pursue, additional clinical trials after a product is approved. These so-called Phase 4 studies may be made a condition to be satisfied after approval. The results of Phase 4 studies can confirm the effectiveness of a product candidate and can provide important safety information.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the biological characteristics of the product candidate as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

BLA Submission and Review by the FDA

The results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of BLA. The submission of BLA requires payment of a substantial User Fee to FDA. The FDA may convene an advisory committee to provide clinical insight on application review questions. The FDA reviews applications to determine, among other things, whether a product is safe and effective for its intended use and whether the manufacturing controls are adequate to assure and preserve the product’s identity, strength, quality and purity. Before approving an NDA or BLA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Once the BLA submission has been accepted for filing, the FDA typically takes one year to review the application and respond to the applicant, which can take the form of either a Complete Response Letter or Approval. The review process is often significantly extended by FDA requests for additional information or clarification. The FDA may delay or refuse approval of a BLA if applicable regulatory

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criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product. FDA approval of any BLA submitted by us will be at a time the FDA chooses. Also, if regulatory approval of a product is granted, such approval may entail limitations on the indicated uses for which such product may be marketed. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, the FDA may require Phase 4 post-marketing studies to monitor the effect of approved products, and may limit further marketing of the product based on the results of these post-marketing studies.

The FDA has a fast track program that is intended to expedite or facilitate the process for reviewing new drugs and biological products that meet certain criteria. Specifically, new drugs and biological products are eligible for fast track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. For a fast track product, the FDA may consider for review on a rolling basis sections of the BLA before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA. A fast track designated product candidate may also qualify for priority review, under which the FDA reviews the BLA in a total of eight months rather than 12 months time.

The FDA may also accelerate the approval of a designated breakthrough therapy, which is a therapy that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Sponsors may request the FDA to designate a breakthrough therapy at the time of, or any time after, the submission of an IND. If the FDA designates a breakthrough therapy, it must take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the therapy; providing timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable; involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review; assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor; and taking steps to ensure that the design of the clinical trials is as efficient as practicable, when scientifically appropriate, such as by minimizing the number of patients exposed to a potentially less efficacious treatment.

Fast Track designation, priority review and breakthrough therapy designation do not change the standards for approval but may expedite the development or approval process.

Post-Approval Requirements

Any products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including record-keeping requirements and reporting of adverse experiences. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with GMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. We cannot be certain that we or our present or future suppliers will be able to comply with the GMP regulations and other FDA regulatory requirements. If our present or future suppliers are not able to comply with these requirements, the FDA may halt our clinical trials, require us to recall a product from distribution, or withdraw approval of the BLA.

The FDA closely regulates the marketing and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA. Failure to comply with

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these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use.

Healthcare and Reimbursement Regulation

Our sales, promotion, medical education and other activities following product approval will be subject to regulation by numerous regulatory and law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade Commission, the Department of Justice, the Centers for Medicare and Medicaid Services, other divisions of the Department of Health and Human Services and state and local governments. Our promotional and scientific/educational programs must comply with the anti-kickback provisions of the Social Security Act, the Foreign Corrupt Practices Act, the False Claims Act, the Veterans Health Care Act and similar state laws.

Depending on the circumstances, failure to meet these applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, private “qui tam” actions brought by individual whistleblowers in the name of the government or refusal to allow us to enter into supply contracts, including government contracts.

Sales of pharmaceutical products depend significantly on the availability of third-party reimbursement. Third-party payors include government health administrative authorities, managed care providers, private health insurers and other organizations. We anticipate third-party payors will provide reimbursement for our products. However, these third-party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products. We may need to conduct expensive clinical studies to demonstrate the comparative cost-effectiveness of our products. The product candidates that we develop may not be considered cost-effective. It is time consuming and expensive for us to seek reimbursement from third-party payors. Reimbursement may not be available or sufficient to allow us to sell our products on a competitive and profitable basis.

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payers in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

Foreign Regulation

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products to the extent we choose to develop or sell any products outside of the United States. The approval process varies from country to country and the time may be longer or shorter than that required to obtain FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

In the European Union, or EU, member states require both regulatory clearances by the national competent authority and a favorable ethics committee opinion prior to the commencement of a clinical trial. Under the EU regulatory systems, marketing authorization applications may be submitted under either a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all EU member states. It is compulsory for medicines produced by certain biotechnological processes. Because our products are produced in that way, we would be subject to the centralized process. Under the

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centralized procedure, pharmaceutical companies submit a single marketing authorization application to the EMA. Once granted by the European Commission, a centralized marketing authorization is valid in all EU member states, as well as the EEA countries Iceland, Liechtenstein and Norway. By law, a company can only start to market a medicine once it has received a marketing authorization.

Employees

As of December 31, 2013, we had 77 employees. Substantially all of our employees are in Bothell, Washington. None of our employees are represented by a labor union or covered under a collective bargaining agreement. We consider our employee relations to be good.

Facilities

Our corporate headquarters are located in Bothell, Washington, where we lease 36,654 square feet of office and laboratory space pursuant to a lease agreement which expires in February 2017. This facility houses our research, clinical, regulatory, commercial and administrative personnel. We believe that our existing facilities are adequate for our near-term needs. We believe that suitable additional or alternative space would be available if required in the future on commercially reasonable terms.

Legal Proceedings

From time to time, we may become involved in litigation relating to claims arising from the ordinary course of business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.

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MANAGEMENT

The following table sets forth information regarding our executive officers and directors as of February 28, 2014:

Name	Age		Position
Randall C. Schatzman, Ph.D.		59	President, Chief Executive Officer and Director
John A. Latham, Ph.D.		54	Chief Scientific Officer
Mark J. Litton, Ph.D.		46	Chief Business Officer, Treasurer and Secretary
Jeffrey T.L. Smith, M.D., FRCP		54	Senior Vice President, Translational Medicine
Larry K. Benedict		53	Senior Vice President, Finance
Stephen M. Dow(3)		58	Chairman of the Board of Directors
Peter Bisgaard(2)		40	Director
Gary Bridger, Ph.D.(1)		51	Director
Aaron Davidson(2)		46	Director
A. Bruce Montgomery, M.D.(3)		60	Director
Deepa R. Pakianathan, Ph.D.(1)		49	Director
Heather Preston, M.D.(2)(3)		48	Director
Clay B. Siegall, Ph.D.(1)		53	Director

(1) Member of the compensation committee.

(2) Member of the audit committee.

(3) Member of the nominating and corporate governance committee.

Executive Officers

Randall C. Schatzman, Ph.D. Dr. Schatzman has served as our President, Chief Executive Officer and director since he co-founded the company, which commenced operations in January 2004. From 1999 to 2004, Dr. Schatzman served as Senior Vice President of Discovery Research at Celltech R&D, Inc., a wholly-owned subsidiary of Celltech Group plc, a biopharmaceutical company, where he led a group of scientists responsible for much of the therapeutic antibody pipeline for Celltech. From 1995 to 1999, Dr. Schatzman served as Director of Gene Discovery at Mercator Genetics Inc., a genomics company. From 1987 to 1995, Dr. Schatzman served as Section Leader at Roche Bioscience, previously Syntex Corp., a subsidiary of Roche Holdings Ltd., a biotechnology company, where he helped found the Cancer and Developmental Biology Institute. Dr. Schatzman holds a Ph.D. in Molecular Pharmacology from Emory University and a B.S. in Biochemistry from Purdue University.

We believe Dr. Schatzman is qualified to serve on our board of directors due to his extensive knowledge of our company and his extensive background in the biotechnology industry.

John A. Latham, Ph.D. Dr. Latham has served as our Chief Scientific Officer since he co-founded the company, which commenced operations in January 2004. From 1998 to 2004, Dr. Latham served as a director, senior director, and most recently as Vice President of Gene Function and Target Validation for Celltech Group plc. In 1994, Dr. Latham joined Darwin Molecular Corporation, a first-generation gene-to-drug biotechnology company, as a founding director, where he served from 1994 to 1998. Dr. Latham was one of the early scientists hired by Gilead Sciences, Inc., a biopharmaceutical company, and, from 1989 to 1994, he was a member of a core group established to exploit novel oligonucleotide-based technologies. Dr. Latham holds a Ph.D. in Biochemistry from Massachusetts Institute of Technology and a B.S. in Chemistry from Colorado State University.

Mark J. Litton, Ph.D. Dr. Litton has served as our Chief Business Officer, Treasurer and Secretary since he co-founded the company, which commenced operations in January 2004. From 1999 to 2004, Dr. Litton served as Vice President of Business Development for Celltech Group, where he was responsible for securing,

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commercializing and partnering numerous novel discoveries and therapeutic opportunities. In 1999, Dr. Litton joined Celltech Group as an employee of Chiroscience Group plc and was later promoted to Vice President Business Development after Chiroscience’s merger with Celltech Group in 1999. From 1997 to 1999, Dr. Litton served as the Manager of Business Development for Ribozyme Pharmaceuticals Inc., currently Sirna Therapeutics, Inc., a biopharmaceutical company, where he helped form relationships with Eli Lilly and Company, Roche Bioscience and GlaxoWellcome plc, currently GlaxoSmithKline plc, a biopharmaceutical company. From 1991 to 1994, Dr. Litton served as a research associate for DNAX Research Institute, a research facility of Schering-Plough, now Merck & Co., a publicly-traded pharmaceutical company. Dr. Litton holds a Ph.D. in Immunology from Stockholm University, an M.B.A. from Santa Clara University and a B.S. in Biochemistry from the University of California, Santa Cruz.

Jeffrey T.L. Smith, M.D., FRCP. Dr. Smith has served as our Senior Vice President, Translational Medicine since 2012 and served in other senior management positions from April 2004 to 2012. From 1999 to 2004, Dr. Smith served as Senior Director of Medical Research for Celltech R&D, where he was responsible for planning and managing the CDP870 anti-TNF clinical trials for RA as well as several other key autoimmune clinical development programs. From 1997 to 1999, Dr. Smith served as Medical Director at Simbec Research Ltd., a contract research organization. From 1995 to 1997, Dr. Smith served as Head of Clinical Pharmacology at Hoechst Marion Roussel Ltd., a pharmaceutical company. From 1994 to 1995, Dr. Smith served as a Senior Clinical Physician at the Proctor and Gamble Company, a publicly-traded consumer products company, and from 1989 to 1994, he served as a Senior Research Physician in the clinical pharmacology department at Glaxo Research and Development Ltd., now a division of GlaxoSmithKline plc, a healthcare company. Dr. Smith holds an M.D. from the University of London and is a Fellow of the Royal College of Physicians in London.

Larry K. Benedict. Mr. Benedict has served as our Senior Vice President of Finance since January 2013 and prior to that served as our Vice President of Finance since June 2008. From 2000 to 2008, Mr. Benedict served in various positions at Seattle Genetics, Inc., a publicly-traded biotechnology company, most recently as Director of Finance and Controller. From 1998 to 2000, Mr. Benedict served as Chief Financial Officer at Sensible Solutions, Inc., a financial software consulting company. From 1997 to 1998, Mr. Benedict served as Finance Manager at SmithKline Beecham Clinical Laboratories, now Quest Diagnostics Incorporated. From 1990 to 1997, he held various finance roles at Bristol-Myers Squibb Company, a biopharmaceutical company. Mr. Benedict holds a B.S. in Accounting from Central Washington University.

Non-Employee Directors

Stephen M. Dow. Mr. Dow has served as a member of our board of directors since April 2005 and as our chairperson since September 2005. Mr. Dow has served as a General Partner with Sevin Rosen Funds, a venture capital firm, since 1983. During his time with Sevin Rosen Funds, Mr. Dow has served as a director on numerous boards of directors, both public and private. Mr. Dow currently serves on the board of directors of Citrix Systems Inc. and he previously served on the board of directors of Cytokinetics, Inc. from 1998 to 2013. Mr. Dow holds an M.B.A. and a B.A. in Economics from Stanford University.

We believe Mr. Dow is qualified to serve on our board of directors due to his diversity of experience in the development, financing and management of emerging technology and life sciences companies.

Peter Bisgaard. Mr. Bisgaard has served as a member of our board of directors since April 2012. Since 2009, Mr. Bisgaard has been employed as a Partner at Novo Ventures (US) Inc., which provides certain consultancy services to Novo A/S. From 2001 to 2009, he was employed as a Partner in Novo A/S. From 1998 to 2001, Mr. Bisgaard served as a consultant with McKinsey & Co., a management consulting firm, where he focused on strategy development, mergers, acquisitions and alliances in various industries. Mr. Bisgaard serves as a director on numerous private company boards of directors. Mr. Bisgaard holds an M.Sc. from the Technical University of Denmark and has a post-graduate degree in Mathematical Modeling in Economics by the European Consortium for Mathematics in the Industry.

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We believe Mr. Bisgaard is qualified to serve on our board of directors due to his extensive experience as an investor in, and director of, early stage biopharmaceutical and life sciences companies.

Gary Bridger, Ph.D. Dr. Bridger has served as a member of our board of directors since November 2013. Since January 2013, Dr. Bridger has served as the Executive Vice President of Research and Development at Xenon Pharmaceuticals Inc., a biopharmaceutical company. Dr. Bridger serves as a Managing Director at Five Corners Capital Inc., which has been appointed to manage the remaining portfolio of biotechnology and technology investments of Ventures West Capital Management, a venture capital firm. Dr. Bridger served as a venture partner for Ventures West from June 2010 to June 2012. From November 2006 to December 2007, Dr. Bridger served as Senior Vice President of Research and Development at Genzyme Corporation, a biotechnology company, which was acquired by Sanofi, S.A. Dr. Bridger co-founded AnorMED Inc. in 1996 and served as its Chief Scientific Officer at the time of its acquisition by Genzyme Corporation in 2006. Dr. Bridger currently serves as a director on numerous private company boards of directors. Dr. Bridger also serves on the Scientific Advisory Board of Alectos Therapeutics Inc. Dr. Bridger holds a Ph.D. in Organic Chemistry from the University of Manchester Institute of Science and Technology.

We believe Dr. Bridger is qualified to serve on our board of directors due to his depth of experience in the biotechnology industry including as an investor and serving in numerous executive officer and director roles.

Aaron Davidson. Mr. Davidson has served as a member of our board of directors since June 2006. Since 2004, Mr. Davidson has served as a Managing Director of H.I.G. BioVentures and focuses on investment opportunities in the life sciences sector. Prior to 2004, Mr. Davidson served as a Vice President with Ventures West, a venture capital firm, with a focus on venture investing in life science companies. Mr. Davidson began his career with Eli Lilly and Company, a publicly-traded pharmaceutical company, where he spent a decade in various management roles in the United States and Canada, including business development, strategic planning, market research and financial planning. Mr. Davidson currently serves as a director on numerous private company boards of directors and on the board of directors Novadaq Technologies Inc. Mr. Davidson previously served on the board of directors of Tranzyme Pharm, now Ocera Therapeutics Inc, until 2013. Mr. Davidson holds an M.B.A. from Harvard Business School and a Bachelor of Commerce from McGill University.

We believe Mr. Davidson is qualified to serve on our board of directors due to his substantial experience as an investor in early stage biopharmaceutical and life sciences companies, as well as his experience of serving on the board of directors for several biopharmaceutical companies.

A. Bruce Montgomery, M.D. Dr. Montgomery has served as a member of our board of director since October 2010. In 2010, Dr. Montgomery founded Cardeas Pharma and currently serves as its Chief Executive Officer. In 2001, he founded Corus Pharma and served as its Chief Executive Officer from 2001 through its acquisition in 2006 by Gilead Sciences. He continued on at Gilead post-acquisition until 2010 and served as Senior Vice President and Head of Respiratory Therapeutics, where he successfully led the approval of Cayston (aztreonam) as a treatment for cystic fibrosis patients. From 1993 to 2000, Dr. Montgomery held positions within the research and development group of PathoGenesis Corporation, a biotechnology company. From 1989 to 1993, Dr. Montgomery worked at Genentech, Inc., a biotechnology company. Dr. Montgomery currently serves on the board of directors of CytoDyn Inc., and he previously served on the board of directors of ZymoGenetics, Inc. from 2009 to 2010. Dr. Montgomery holds an M.D. and a B.S. in Chemistry from the University of Washington.

We believe Dr. Montgomery is qualified to serve on our board of directors due to his many years of research and development and executive management experience in the biotechnology industry, including overseeing the successful development of several approved products, including inhalable tobramycin and dornas alfa, or Pulmozyme.

Deepa R. Pakianathan, Ph.D. Dr. Pakianathan has served as a member of our board of directors since December 2007. Since 2001, Dr. Pakianathan has served as a Managing Member at Delphi Ventures, a venture

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capital firm focused on medical device and biotechnology investments. From 1998 to 2001, Dr. Pakianathan served as a Vice President in the healthcare group at JP Morgan Chase & Company, where she was involved in healthcare merger and acquisition transactions and public offerings for biotechnology companies. Dr. Pakianathan currently serves on the board of directors of Alexza Pharmaceuticals, Inc., Oncomed Pharmaceuticals, Inc. and Karyopharm Therapeutics, Inc. Dr. Pakianathan holds a Ph.D. and an M.S. from Wake Forest University, a B.Sc. from the University of Bombay, India and an M.Sc. from The Cancer Research Institute at the University of Bombay, India.

We believe Dr. Pakianathan is qualified to serve on our board of directors due to her experience as a venture capital investor in and director of multiple biotechnology companies, as well as her experience as a biotechnology investment banker.

Heather Preston, M.D. Dr. Preston has served as a member of our board of directors since December 2007. Since 2005, Dr. Preston has served as a Managing Director at TPG BioTech, a biotechnology venture capital firm. Prior to joining TPG BioTech, Dr. Preston served for two years as a medical device and biotechnology venture capital investor at JP Morgan Partners, LLC, a private equity firm. Prior to that, she was an Entrepreneur-in-Residence at New Enterprise Associates, a venture capital firm. From 1997 to 2002, Dr. Preston served as a leader of the pharmaceutical and medical products consulting practice at McKinsey & Co. in New York. Dr. Preston currently serves as a director on numerous private company boards of directors. Dr. Preston holds an M.D. from the University of Oxford and a B.S. in biochemistry from the University of London.

We believe Dr. Preston is qualified to serve on our board of directors due to her substantial experience as an investor in early stage biopharmaceutical and life sciences companies, as well as her experience at McKinsey & Co. advising large pharmaceutical companies.

Clay B. Siegall, Ph.D. Dr. Siegall has served as a member of our board of directors since March 2006. In 1998, Dr. Siegall co-founded Seattle Genetics, Inc. and currently serves as its President, Chief Executive Officer and Chairman of the Board of Directors. From 1991 to 1997, Dr. Siegall was with the Bristol-Myers Squibb Pharmaceutical Research Institute and the National Cancer Institute, National Institutes of Health from 1988 to 1991. In addition to Seattle Genetics, Dr. Siegall currently serves on the board of directors of Ultragenyx Pharmaceutical Inc. Dr. Siegall holds a Ph.D. in Genetics from George Washington University and a B.S. in Zoology from the University of Maryland.

We believe Dr. Siegall is qualified to serve on our board of directors due to his experience in founding and building Seattle Genetics, his significant executive leadership experience and his role overseeing the successful development of an approved product.

Each of our executive officers serves at the discretion of our board of directors and holds office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. There are no family relationships among any of our directors or executive officers.

Board Composition

Our business and affairs are managed under the direction of our board of directors, which currently consists of nine members. Certain members of our board of directors were elected pursuant to the provisions of a voting agreement among certain of our major stockholders, as amended. Under the terms of this voting agreement, the stockholders who are party to the voting agreement have agreed to vote their respective shares so as to elect as directors (1) one director designated by Sevin Rosen Fund IX L.P. (Mr. Dow); (2) one director designated by Ventures West 8 Limited Partnership (Dr. Bridger); (3) one director designated by H.I.G. Ventures (Mr. Davidson); (4) one director designated by Delphi Ventures (Dr. Pakianathan); (5) one director designated by TPG Biotechnology Partners II, L.P. (Dr. Preston); (6) one director designated by Novo A/S (Mr. Bisgaard); (7) the person serving as our chief executive officer, or if there is no such person, the person serving as the President of the company (Dr. Schatzman); and (8) two directors who are acceptable to the board of directors, are independent of the company and have relevant industry experience (Dr. Montgomery and Dr. Siegall). The voting agreement will terminate upon the closing of this offering and none of our stockholders will have any special rights regarding the election or designation of members of our board of directors.

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Our board of directors will consist of nine members upon the closing of this offering. In accordance with our certificate of incorporation to be filed in connection with this offering, immediately after this offering, our board of directors will be divided into three classes with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:

• the Class I directors will be Mr. Davidson, Dr. Montgomery and Mr. Dow, and their terms will expire at our annual meeting of stockholders to be held in 2015;

• the Class II directors will be Dr. Pakianathan, Mr. Bisgaard and Dr. Bridger, and their terms will expire at our annual meeting of stockholders to be held in 2016; and

• the Class III directors will be Dr. Siegall, Dr. Preston and Dr. Schatzman, and their terms will expire at our annual meeting of stockholders to be held in 2017.

We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

Director Independence

Under the listing requirements and rules of the NASDAQ Stock Market LLC, or NASDAQ, independent directors must comprise a majority of a listed company’s board of directors within a specified period of time after this offering.

Our board of directors has undertaken a review of its composition, the composition of its committees, and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment, and affiliations, including family relationships, our board of directors has determined that all of our board of directors except Dr. Schatzman, who is our president and chief executive, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of NASDAQ. In making this determination, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

Board Committees

Our board of directors has the authority to appoint committees to perform certain management and administration functions. Upon the closing of this offering, our board of directors will have an audit committee, a compensation committee and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the board of directors. Following the closing of this offering, the charters for each of these committees will be available on our website at www.alderbio.com.

Audit Committee

Our audit committee consists of Mr. Davidson, Mr. Bisgaard and Dr. Preston. Our board of directors has determined that each of Mr. Davidson, Mr. Bisgaard and Dr. Preston are independent under NASDAQ listing standards and Rule 10A-3(b)(1) of the Exchange Act. The chairperson of our audit committee is Mr. Davidson. Our board has determined that each of Mr. Davidson, Mr. Bisgaard and Dr. Preston is an “audit committee financial expert” within the meaning of SEC regulations. Each member of our audit committee can read and

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understand fundamental financial statements in accordance with audit committee requirements. In arriving at this determination, the board has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

Our audit committee oversees our corporate accounting and financial reporting process. The audit committee has the following responsibilities, among others things, as set forth in the audit committee charter that will become effective upon the closing of this offering:

• reviewing disclosures by a prospective registered public accounting firm of relationships between such firm or its members and us or our personnel in financial oversight roles to determine independence of a prospective registered public accounting firm;

• reviewing and pre-approving the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services;

• evaluating the performance and assessing qualifications of our independent registered public accounting firm and deciding whether to retain their services;

• monitoring the rotation of partners of our independent registered public accounting firm on our engagement team as required by law;

• considering and adopting clear policies regarding pre-approval by our audit committee of our employment of individuals employed or formerly employed by our independent registered accounting firm and engaged on our account;

• reviewing our annual and quarterly financial statements and reports and discussing the statements and reports with our independent registered public accounting firm and management;

• preparing the audit committee report required by the SEC to be included in our annual proxy statement;

• reviewing, with our independent registered public accounting firm and management, significant issues that may arise regarding accounting principles and financial statement presentation, as well as matters concerning the scope, adequacy and effectiveness of our financial controls;

• reviewing and discussing with management and our independent registered accounting firm, our guidelines and policies with respect to risk assessment and risk management, any management or internal control letters, and any conflicts or disagreements regarding financial reporting, accounting practices of policies or other matters significant to our financial statements or the report of our independent registered accounting firm;

• reviewing and establishing appropriate additional insurance coverage for our directors and executive officers;

• considering and reviewing with our management, our independent registered accounting firm, and outside counsel or advisors, correspondence with regulatory or governmental agencies and any published reports that may raise material issues regarding our financial statements or accounting policies;

• conducting an annual assessment of the performance of the audit committee and its members, and the adequacy of its charter;

• establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters; and

• reporting to our board of directors material issues in connection with our audit committee’s responsibilities.

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Compensation Committee

Our compensation committee consists of Dr. Siegall, Dr. Bridger and Dr. Pakianathan. Our board of directors has determined that each of Dr. Siegall, Dr. Bridger and Dr. Pakianathan are independent under NASDAQ listing standards, a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act, and an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code. The chairperson of our compensation committee is Dr. Siegall.

Our compensation committee reviews and recommends policies relating to compensation and benefits of our officers and employees. The compensation committee has the following responsibilities, among other things, as set forth in the compensation committee’s charter that will become effective upon the closing of this offering:

• determining the appropriate relationship of compensation to the market to achieve corporate objectives;

• recommending to our board of directors for determination and approval the compensation and other terms of employment of our chief executive officer and his performance in light of relevant corporate performance goals and objectives;

• reviewing and approving the compensation and other terms of employment of our executive officers (other than our chief executive officer) and other employees, and corporate performance goals and objectives relevant to such compensation, and assessing the attainment of the prior year’s corporate goals and objectives;

• appointing, compensating, and overseeing the work of compensation consultants, independent legal counsel or any other advisors engaged for the purpose of advising the committee after assessing the independence of such person in accordance with applicable NASDAQ rules;

• after consulting with compensation consultants, independent legal counsel or other advisor to our compensation committee, reviewing and recommending to our board of directors the compensation of our directors;

• reviewing and recommending to our board of directors and administering the equity incentive plans, compensation plans, and similar programs advisable for us, as well as evaluating and approving modification or termination of existing plans and programs;

• establishing policies with respect to equity compensation arrangements;

• recommending to our board of directors compensation-related proposals to be considered at our annual meeting of stockholders;

• preparing the compensation committee report required by the SEC to be included in our annual proxy statement;

• reviewing and discussing with management any conflicts of interest raised by the work of a compensation consultant or advisor retained by our compensation committee or management and how such conflict is being addressed, and preparing any necessary disclosure in our annual proxy statement in accordance with applicable SEC rules; and

• reviewing and evaluating, at least annually, the performance of the compensation committee and the adequacy of its charter.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Mr. Dow, Dr. Montgomery and Dr. Preston. Our board of directors has determined that each of Mr. Dow, Dr. Montgomery and Dr. Preston are independent under NASDAQ listing standards. The chairperson of our nominating and corporate governance committee is Mr. Dow.

Our nominating and corporate governance committee makes recommendations regarding corporate governance, the composition of our board of directors, identification, evaluation and nomination of director

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candidates and the structure and composition of committees of our board of directors. The nominating and corporate governance committee has the following responsibilities, among other things, as set forth in the nominating and corporate governance committee’s charter that will become effective upon the closing of this offering:

• reviewing periodically and evaluating director performance on our board of directors and its applicable committees, and recommending to our board of directors and management areas for improvement;

• interviewing, evaluating, nominating and recommending individuals for membership on our board of directors;

• overseeing and reviewing our processes and procedures to provide information to our board of directors and its committees;

• reviewing and recommending to our board of directors any amendments to our corporate governance policies; and

• reviewing and assessing, at least annually, the performance of the nominating and corporate governance committee and the adequacy of its charter.

Code of Business Conduct and Ethics

Prior to the closing of this offering, we expect to adopt a Code of Business Conduct and Ethics that will apply to all of our employees, officers and directors, including those officers responsible for financial reporting. Following the closing of this offering, the Code of Business Conduct and Ethics will be available on our website at www.alderbio.com. We intend to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on our website to the extent required by the applicable rules and exchange requirements. The inclusion of our website address in this prospectus does not incorporate by reference the information on or accessible through our website into this prospectus.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee has ever been an officer or employee of our company. None of our executive officers serve, or have served during the last fiscal year, as a member of the board of directors, compensation committee or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our compensation committee.

Non-Employee Director Compensation

We currently provide cash compensation to certain of our non-employee directors. From time to time, we have granted stock options to certain of our non-employee directors as compensation for their services. Dr. Schatzman, who is also an employee, is compensated for his service as an employee and does not receive any additional compensation for his service on our board of directors.

The following table sets forth information regarding compensation earned by or paid to our non-employee directors during 2013.

Name	Cash Compensation		Option Awards(1)		Total
Stephen M. Dow	$	—	$	—	$	—
Peter Bisgaard		—		—		—
Gary Bridger, Ph.D.		—		—		—
Aaron Davidson		—		—		—
A. Bruce Montgomery, M.D		30,000		26,812		56,812
Deepa R. Pakianathan, Ph.D.		—		—		—
Heather Preston, M.D.		—		—		—
Clay B. Siegall, Ph.D.		30,000		26,812		56,812

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(1) The amounts in this column reflect the aggregate grant date fair value of each option award granted during the year, computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 11 to our consolidated financial statements included in this prospectus. The table below lists the aggregate number of shares and additional information with respect to the outstanding option awards held by each of our non-employee directors.

Name	Number of Shares Subject to Outstanding Options as of December 31, 2013
Stephen M. Dow		—
Peter Bisgaard		—
Gary Bridger, Ph.D.		—
Aaron Davidson		—
A. Bruce Montgomery, M.D.		140,000
Deepa R. Pakianathan, Ph.D.		—
Heather Preston, M.D.		—
Clay B. Siegall, Ph.D.		390,000

In                     2014, our board of directors adopted a non-employee director compensation policy, which will be effective for all of our non-employee directors upon the closing of this offering, pursuant to which we will compensate our non-employee directors with an annual cash retained. Each such director who is not affiliated with one of our principal stockholders will receive an annual base cash retainer of $          for such service, to be paid quarterly. Each chairperson, vice-chairperson and lead independent director of our board of directors will receive an additional annual base cash retainer of $          for such service, to be paid quarterly.

The policy also provides that we compensate the members of our board of directors for service on our committees as follows:

• The chairperson of our audit committee will receive an annual cash retainer of $          for such service, paid quarterly, and each of the other members of the audit committee will receive an annual cash retainer of $         , paid quarterly.

• The chairperson of our compensation committee will receive an annual cash retainer of $          for such service, paid quarterly, and each of the other members of the compensation committee will receive an annual cash retainer of $         , paid quarterly.

• The chairperson of our nominating and corporate governance committee will receive an annual cash retainer of $          for such service, paid quarterly, and each of the other members of the nominating and corporate governance committee will receive an annual cash retainer of $        , paid quarterly.

• The chairperson of our research and development committee will receive an annual cash retainer of $          for such service, paid quarterly, and each of the other members of the research and development committee will receive an annual cash retainer of $         , paid quarterly.

The policy further provides for the grant of equity awards as follows:

• Each non-employee director serving on our board of directors upon the closing of this offering and each non-employee director elected to our board of directors after the closing of this offering will receive an option to purchase                 shares of our common stock. With respect to each non-employee director serving on our board of directors upon the closing of this offering, each of these options will vest                 , subject to the director’s continued service as a director.

• On the date of the first board meeting held after each annual meeting of stockholders, each non-employee director will receive an option to purchase additional                 shares of our common stock.

Each of these options will be granted with an exercise price equal to the fair market value of our common stock on the date of such grant. The exact number of shares to be granted in each such grant shall be subject to adjustment based on the review by our board of directors or compensation committee of the market value of the grant implied by the foregoing percentages at the time of grant.

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EXECUTIVE COMPENSATION

Our named executive officers, consisting of our principal executive officer and the next three most highly compensated executive officers, are:

• Randall C. Schatzman, Ph.D., President and Chief Executive Officer;

• John A. Latham, Ph.D., Chief Scientific Officer;

• Mark J. Litton, Ph.D., Chief Business Officer; and

• Jeffrey T.L. Smith, MD., FRCP, Senior Vice President, Translational Medicine.

2013 Summary Compensation Table

The following table sets forth all of the compensation awarded to, earned by or paid to our named executive officers during 2013.

Name and Principal Position	Year		Salary		Non-Equity Incentive Plan Compensation(1)		All Other Compensation			Total
Randall C. Schatzman, Ph.D.		2013	$	384,671	$	138,482	$	35,761	(2)	$	558,914
President, Chief Executive Officer and Director
John A. Latham, Ph.D.		2013		362,448		108,734		16,070	(3)		487,252
Chief Scientific Officer
Mark J. Litton, Ph.D.		2013		308,417		83,273		20,789	(4)		412,479
Chief Business Officer
Jeffrey T.L. Smith, M.D., FRCP		2013		354,312		114,265		22,081	(3)		490,658
Senior Vice President, Translational Medicine

(1) Amounts represent amounts earned in 2013, which were paid during 2014, under our bonus program based on the achievement of company and individual performance goals and other factors deemed relevant by our compensation committee. Our 2013 company goals related to the advancement of our clinical trials and preclinical programs, business and corporate development objectives, collaboration objectives and financial management objectives. For 2013, we determined our chief executive officer’s annual performance bonus based on attainment of company objectives, which bonus our compensation committee determined was appropriate given our chief executive officer’s responsibility for the overall direction and success of our business. We based the 2013 annual performance bonuses for each of the other named executive officers on an equal balance of company performance (50%) and individual performance (50%), which our compensation committee determined was appropriate in order to reinforce the importance of integrated and collaborative leadership. For 2013, the compensation committee determined that Drs. Latham, Litton and Smith were entitled to 100%, 90% and 107.5% of their target bonuses. The compensation committee determined that Dr. Schatzman should receive 90% of his target bonus.

(2) Includes: (a) the value of company paid premiums of $24,221 for term-life, long-term care and disability insurance and (b) $11,540 of safe-harbor matching contributions defined in our 401(k) plan.

(3) Includes the value of company paid premiums for term-life, long-term care and disability insurance.

(4) Includes: (a) the value of company paid premiums of $6,796 for term-life, long-term care and disability insurance and (b) $13,993 of safe-harbor matching contributions defined in our 401(k) plan.

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Outstanding Equity Awards as of December 31, 2013

The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2013.

	Vesting Commencement Date		Number of Securities Underlying Unexercised Options(1)					Option Exercise Price		Option Expiration Date
Name			Exercisable		Unexercisable
Randall C. Schatzman, Ph.D.		09/15/2006		550,000		—		$	0.07		9/14/2016
		05/18/2007		375,000		—			0.23		11/13/2017
		03/24/2008		650,000		—			0.30		7/22/2018
		02/24/2009		450,000		—			0.18		4/20/2019
		02/26/2010		239,583		10,417	(2)		0.81		2/25/2020
		01/01/2011		182,291		67,709	(3)		0.72		5/9/2021
		06/13/2012		337,500		562,500	(4)		0.63		6/12/2022
John A. Latham, Ph.D.		09/15/2006		550,000		—			0.07		9/14/2016
		05/18/2007		225,000		—			0.23		11/13/2017
		03/24/2008		400,000		—			0.30		7/22/2018
		02/24/2009		175,000		—			0.18		4/20/2019
		02/26/2010		119,791		5,209	(2)		0.81		2/25/2020
		06/13/2012		196,875		328,125	(4)		0.63		6/12/2022
Mark J. Litton, Ph.D.		09/15/2006		550,000		—			0.07		9/14/2016
		05/18/2007		112,500		—			0.23		11/13/2017
		03/24/2008		200,000		—			0.30		7/22/2018
		02/24/2009		125,000		—			0.18		4/20/2019
		02/26/2010		158,125		6,875	(2)		0.81		2/25/2020
		06/13/2012		84,375		140,625	(4)		0.63		6/12/2022
Jeffrey T.L. Smith, M.D., FRCP		01/20/2004		340,000		—			0.01		7/18/2015
		09/15/2006		238,000		—			0.07		9/14/2016
		05/18/2007		88,500		—			0.23		11/13/2017
		03/24/2008		200,000		—			0.30		7/22/2018
		02/24/2009		225,000		—			0.18		4/20/2019
		02/26/2010		119,791		5,209	(2)		0.81		2/25/2020
		06/13/2012		56,250		93,750	(4)		0.63		6/12/2022
		12/12/2012		43,750		131,250	(5)		0.63		12/11/2022

(1) Pursuant to offer of employment letters between each named executive officer and us, the vesting of such named executive officer’s option awards will accelerate under certain circumstances as described under “—Employment and Change in Control Severance Benefits Agreements.” All awards in the table above have been granted under our 2005 Plan, as described under “—Employee Benefit and Stock Plans.”

(2) The unvested shares vested in approximately equal monthly installments through February 26, 2014.

(3) The unvested shares are scheduled to vest in approximately equal monthly installments through January 1, 2015, subject to continued service with us through each relevant vesting date.

(4) The unvested shares are scheduled to vest in approximately equal monthly installments through June 13, 2016, subject to continued service with us through each relevant vesting date.

(5) The unvested shares are scheduled to vest in approximately equal monthly installments through December 12, 2016, subject to continued service with us through each relevant vesting date.

Employment and Change in Control Severance Benefits Agreements

Offer of Employment Letters

We have entered into offer of employment letters with each of the named executive officers in connection with his employment with us. With the oversight and approval of our board of directors of directors, each of these employment agreements was negotiated on our behalf by our Chief Executive Officer, Dr. Randall

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Schatzman, with the exception of his own employment agreement. These agreements provided for “at will” employment and set forth the terms and conditions of employment of each named executive officer, including base salary, standard employee benefit plan participation, and the acceleration of the vesting of restricted stock and stock options held by such named executive officers upon the occurrence of certain conditions. These employment agreements were each subject to execution of our standard confidential information and invention assignment agreement.

Upon our termination of a named executive officer without cause or upon a constructive termination of a named executive officer, the vesting and exercisability of all outstanding options to purchase our common stock held by the named executive officer that were granted before April 1, 2012 will accelerate vesting in full. Upon a change in control, all outstanding options to purchase our common stock held by the named executive officer that were granted before April 1, 2012, and restricted stock held by the named executive officer will accelerate in full. Additionally, the offer of employment letters provide that the vesting and exercisability of any options to purchase our common stock granted after April 1, 2012 held by the named executive officer that are not assumed or substituted for in a change in control will accelerate vesting in full. Moreover, the vesting and exercisability of any and all outstanding options to purchase our common stock held by the named executive officer granted after April 1, 2012 will accelerate in full if either of the following occurs: (1) the named executive officer remains employed with the company through the one-year anniversary of the change in control, or (2) the named executive officer’s employment is terminated by the company without cause or a constructive termination occurs within one year after the change in control. To receive the vesting acceleration benefits upon a termination of the named executive officer’s employment without cause or upon constructive termination, the named executive officer would be required to execute a release of claims in our favor.

For purposes of each offer of employment letter, the term “change in control” means a sale of all or substantially all of the our assets, a merger or other reorganization in which we are not the surviving entity or pursuant to which our stockholders immediately prior to the transaction own less than 50% of our combined voting power following the transaction, or the acquisition by one person or entity of more than 50% of our voting power in a single transaction or series of related transactions; provided that none of the following shall be considered a change in control transaction: (1) a merger effected exclusively for the purpose of changing our domicile or (2) an equity financing in which we are the surviving corporation.

For purposes of each offer of employment letter, the term “cause” means any of the following: (1) the executive officer’s continued failure, in the reasonable opinion of our board of directors, to perform one or more assigned duties or responsibilities, such failure being evidenced by a written report submitted on behalf of us to our board of directors so indicating failure and including a remedy or remedies reasonably satisfactory to our board of directors for correcting the asserted failure or failures; (2) failure to follow the lawful directives of the executive officer’s manager(s), such failure being evidenced by a written report submitted by such manager(s) to our board of directors so indicating failure and including a remedy or remedies reasonably satisfactory to our board of directors; (3) material violation of any of our polices, as evidenced by the executive officer’s signature on a then-current copy of our policy handbook; (4) commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to us; (5) unauthorized use or disclosure of any of our proprietary information or trade secrets or any other party to whom the executive officer owes an obligation of nondisclosure as a result of the relationship with us; (6) material breach by the executive officer of any obligations under any written agreement or covenant with us; or (7) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of our board of directors approve as the basis for termination of employment.

For purposes of each offer of employment letter, the term “constructive termination” means resignation within 30 days following the occurrence of one of the following events: (1) a reduction by us in the executive officer’s base salary as in effect immediately prior to such reduction; (2) a material adverse change in the executive officer’s position causing such position to be of materially reduced status or responsibility; or (3) relocation of the executive officer’s assigned work site more than 50 miles from his or her work site immediately prior to such relocation.

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Executive Change in Control Severance Benefit Plan

We adopted an Executive Change in Control Severance Benefit Plan, or the Severance Plan, in June 2012, which provides for certain severance benefits to its participants upon certain qualifying terminations of employment in connection with our change in control.

Our Severance Plan provides for the payment of severance benefits to certain eligible employees of our company in the event such persons become subject to involuntary or constructive employment terminations in connection with an acquisition of our company. Benefits under the Severance Plan are provided to eligible employees as set forth in the applicable participation agreement.

A person is eligible to participate in the Severance Plan if (1) our board of directors has designated such person as eligible by providing such person with a participation agreement, (2) such person’s employment terminates due to a “Covered Termination” under the Severance Plan and (3) such person meets the Severance Plan’s other eligibility requirements. Each of Drs. Schatzman, Latham, Litton and Smith has executed a participation agreement under, and is a participant of, the Severance Plan.

To receive any of the severance benefits under these agreements, the executive officer would be required to execute a release of claims in our favor.

The participation agreements entered into with each named executive officer under the Severance Plan provide that in the event of a termination of the executive officer’s employment without cause (as defined in the Severance Plan) by us or an executive officer’s resignation for good reason (as defined in the Severance Plan) at any time during the period beginning 30 days prior to through 12 months following our change in control (referred to as the Covered Period), which termination we refer to as a Covered Termination, such executive officer is eligible to receive the following payments and benefits:

• a lump sum cash amount equal to, in the case of Dr. Schatzman, such executive officer’s annual base salary multiplied by 1.5, and in the case of Drs. Latham, Litton and Smith, such executive officer’s annual base salary, payable within 10 business days following the latter of (1) the effective date of the executive’s release of claims and (2) the effective date of the change in control (or such other date as required by the Severance Plan); and

• company-paid health care premiums under our group health coverage plans as provided under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, or COBRA, in the case of Dr. Schatzman, for 18 months, and in the case of Drs. Latham, Litton and Smith, for 12 months. If at any time we determine that we cannot provide the COBRA benefits without potentially incurring financial costs or penalties under applicable law, then in lieu of paying COBRA premiums, such executive officer is eligible to receive on the last day of each remaining month, a fully taxable cash payment equal to the COBRA premium for that month for the time periods indicated previously.

For purposes of the Severance Plan, the term “change in control” means a sale of all or substantially all of the our assets, a merger or other reorganization in which we are not the surviving entity or pursuant to which our stockholders immediately prior to the transaction own less than 50% of our combined voting power following the transaction, or the acquisition by one person or entity of more than 50% of our voting power in a single transaction or series of related transactions; provided that none of the following shall be considered a change in control transaction: (1) a merger effected exclusively for the purpose of changing our domicile or (2) an equity financing in which we are the surviving corporation.

For purposes of the Severance Plan, the term “cause” means any of the following: (1) the executive officer’s continued failure, in the reasonable opinion of our board of directors, to perform one or more assigned duties or responsibilities, such failure being evidenced by a written report submitted on behalf of us to our board of directors so indicating failure and including a remedy or remedies reasonably satisfactory to our board of directors for correcting the asserted failure(s); (2) failure to follow the lawful directives of the executive officer’s manager(s), such failure being evidenced by a written report submitted by such manager(s) to our board of directors so indicating failure and including a remedy or remedies reasonably satisfactory to our board of

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directors; (3) material violation of any of our polices, as evidenced by the executive officer’s signature on a then-current copy of our policy handbook; (4) commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to us; (5) unauthorized use or disclosure of any of our proprietary information or trade secrets or any other party to whom the executive officer owes an obligation of nondisclosure as a result of the relationship with us; (6) material breach by the executive officer of any obligations under any written agreement or covenant with us; or (7) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of our board of directors approve as the basis for termination of employment.

For purposes of the Severance Plan, the term “good reason” means resignation within 30 days following the occurrence of one of the following events without the executive officer’s consent: (1) a material reduction by us in the executive officer’s base salary as in effect immediately prior to such reduction; (2) a material adverse change in the executive officer’s position causing such position to be of materially reduced status or responsibility; or (3) relocation of the executive officer’s assigned work site more than 50 miles from his or her work site immediately prior to such relocation.

Before an executive officer may terminate employment for “good reason,” the executive officer must first give us written notice of the action or omission giving rise to “good reason” within 30 days after the first occurrence thereof; we must fail to reasonably cure such action or omission within 30 days after receipt of such notice (the “cure period”), and the executive officer’s resignation must be effective not later than 30 days after the expiration of such cure period. An executive officer’s resignation will not fail to constitute a Covered Termination if the events giving rise to the executive officer’s right to resign for good reason occurs during the Covered Period and the executive officer resigns within 30 days after our cure period (during which we fail to cure the action or omission), notwithstanding that his resignation may occur after the Covered Period.

Employee Benefit and Stock Plans

2005 Stock Plan

Our board of directors initially adopted, and our stockholders subsequently approved, our 2005 Stock Plan, or the 2005 Plan, in July 2005. Our 2005 Plan provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or the Code, to our employees, and for the grant of nonstatutory stock options, or NSOs and rights to acquire restricted stock to our employees, directors and consultants collectively, the “stock awards.” We expect no further grants will be made under our 2005 Plan after the closing of this offering.

Authorized Shares

As of December 31, 2013, (1) 11,614,300 shares of our common stock are issuable upon the exercise of stock options outstanding and (2) 1,865,344 shares of our common stock are reserved for future issuance under the 2005 Plan.

Shares issued under our 2005 Plan include any authorized but unissued or reacquired shares of our common stock. Shares subject to stock awards granted under our 2005 Plan that expire or become unexercisable without being exercised in full, shares that are tendered to pay the exercise price or tax withholding obligation on an award, and shares surrendered pursuant to an option exchange program, do not reduce the number of shares available for issuance under our 2005 Plan.

Plan Administration

Our board of directors, or a duly authorized committee of our board of directors, may administer our 2005 Plan. Subject to the terms of our 2005 Plan, the administrator has the authority to determine the terms of awards, including recipients, the exercise or purchase price of stock awards, the number of shares subject to each stock award, the fair market value of a share of our common stock, the vesting schedule applicable to the awards, together with any vesting acceleration and the form of consideration, if any, payable upon exercise or settlement

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of the award and the terms of the award agreements for use under our 2005 Plan. The administrator of the 2005 Plan also may implement an option exchange program whereby outstanding options are exchanged for options with a lower exercise price or are amended to decrease the exercise price as a result of a decline in the fair market value of our stock. The administrator may at any time offer to buy out for a payment in cash or shares an option previously granted under the 2005 Plan.

Options

Incentive and nonstatutory stock options are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for a stock option, within the terms and conditions of the 2005 Plan, provided that the exercise price of an option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2005 Plan vest at the rate specified by the plan administrator. The plan administrator determines the term of stock options granted under the 2005 Plan, up to a maximum of 10 years. Unless the terms of an option holder’s stock option agreement provide otherwise, if an option holder’s service relationship with us, or any of our affiliates, ceases for any reason other than disability or death, the option holder may exercise any vested options for a period of 30 days following the cessation of service. Generally, our stock option agreements with our option holders provide that the option holder may exercise any vested options for a period of 90 days following such cessation of service. If an option holder’s service relationship with us or any of our affiliates ceases due to disability or death or upon the option holder’s death within 30 days following ceasing to provide services to us, the option holder or a beneficiary may generally exercise any vested options for a period of 12 months in the event of disability or death. In no event may an option be exercised beyond the expiration of its term. Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include cash or, at the discretion of the plan administrator, by (1) the tender of shares of our common stock previously owned by the option holder, (2) delivery of a promissory note, (3) cancellation of indebtedness, (4) proceeds from a broker-assisted cashless exercise and (5) any combination of the above.

Stock Purchase Rights

Rights to purchase stock are granted pursuant to restricted stock purchase agreements adopted by the plan administrator. Common stock acquired pursuant to stock purchase rights may, but need not, be subject to a share repurchase option in our favor in accordance with a vesting schedule to be determined by the plan administrator. A recipient of a stock purchase right accepts the stock award by executing a restricted stock purchase agreement in the form approved by the plan administrator. The terms of the stock award, including the purchase price of shares, is determined by the plan administrator.

Corporate Transactions

Our 2005 Plan provides that in the event of a specified corporate transaction, as defined under our 2005 Plan, each outstanding stock award may be assumed or an equivalent stock award may be substituted by a successor corporation. If the successor corporation does not agree to assume the stock award or to substitute an equivalent stock award, such stock awards will become fully vested and exercisable prior to the closing, and if not exercised by the closing, the stock awards will terminate at the closing of the transaction. In addition, if within one year after our change of control (as defined in the 2005 Plan), an option holder’s employment is terminated by us or our successor other than for cause (as defined in the 2005 Plan) or if the option holder resigns due to a constructive termination (as defined in the 2005 Plan), any assumed or substituted options then outstanding will accelerate vesting in full, subject to the option holder’s execution of a release of claims in our favor.

For purposes of the 2005 Plan, the term “change of control” means a sale of all or substantially all of the our assets, a merger or other reorganization in which we are not the surviving entity or pursuant to which our stockholders immediately prior to the transaction own less than 50% of our combined voting power following the transaction, or the acquisition by one person or entity of more than 50% of our voting power in a single transaction or series of related transactions; provided that none of the following shall be considered a change in

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control transaction: (1) a merger effected exclusively for the purpose of changing our domicile or (2) an equity financing in which we are the surviving corporation.

For purposes of the 2005 Plan, the term “constructive termination” means, unless a different meaning is provided in a separate agreement applicable to the option holder, any of the following: (2) a reduction of the option holder’s then-current base salary; (2) a material adverse change in the option holder’s position causing such position to be of materially reduced status or responsibility; or (3) relocation of assigned work site more than 50 miles from the option holder’s work site immediately prior to such relocation.

For purposes of the 2005 Plan, the term “cause” means, unless a different meaning is provided in a separate agreement applicable to the option holder, any of the following: (1) the option holder’s continued failure, in the reasonable opinion of the board of directors, to perform one or more assigned duties or responsibilities to our company, such failure being evidenced by a written report submitted on behalf of our company to the board of directors so indicating failure and including a remedy or remedies reasonably satisfactory to the board of directors for correcting the asserted failure(s); (2) failure to follow the lawful directives of the option holder’s manager(s), such failure being evidenced by a written report submitted by such manager(s) to the board of directors so indicating failure and including a remedy or remedies reasonably satisfactory to the board of directors; (3) material violation of any company policy, as evidenced by the option holder’s signature on a then-current copy of our company Policy Handbook; (4) commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to our company; (5) unauthorized use or disclosure of any proprietary information or trade secrets of our company or any other party to whom The option holder owes an obligation of nondisclosure as a result of the relationship with our company; (6) material breach by the option holder of any obligations under any written agreement or covenant with our company; or (7) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the board of directors approve as the basis for termination of employment.

Changes in Capitalization

If there is a specified type of change in our capital structure, such as a stock split or recapitalization, appropriate adjustments will be made to (1) the number of shares available for future grants under the 2005 Plan, and (2) the number of shares covered by, and the exercise price of, each outstanding stock award.

Transferability

Our 2005 Plan generally does not allow for the transfer or assignment of stock awards, other than by will or the laws of descent or distribution, and only the recipient of a stock award may exercise such stock award during his or her lifetime.

Plan Amendment or Termination

Our board of directors has the authority to amend, suspend or terminate our 2005 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. We expect to terminate the 2005 Plan upon the closing of this offering. As a result, we expect no further grants will be made under our 2005 Plan after the closing of this offering.

2014 Equity Incentive Plan

Our board of directors adopted our 2014 Equity Incentive Plan, or the 2014 Plan, on                     , 2014. Our stockholders approved the 2014 Plan on                     , 2014. The 2014 Plan will become effective immediately upon the signing of the underwriting agreement for this offering. The 2014 Plan will terminate on                     , 2024, unless sooner terminated by our board of directors. Our 2014 Plan provides for the grant of ISOs to our employees and for the grant of NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, performance-based cash awards and other forms of equity compensation to our employees, directors and consultants. Additionally, our 2014 Plan provides for the grant of performance cash awards to our employees, directors and consultants.

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Authorized Shares

The maximum number of shares of our common stock that may be issued under our 2014 Plan will consist of (1) the shares of our common stock remaining available for issuance under the 2005 Plan on the date of this offering and (2) the shares of our common stock subject to awards granted under the 2005 Plan that expire or terminate for any reason prior to exercise or settlement, are forfeited because of the failure to vest in those shares, or are otherwise reacquired or withheld to satisfy a tax withholding obligation in connection with such awards if, as, and when such shares are subject to such events, which aggregate number of shares will not exceed              shares, with such shares subject to adjustment to reflect any split of our common stock. Additionally, the number of shares of our common stock reserved for issuance under our 2014 Plan will automatically increase on January 1 of each year, beginning on January 1, 2015 and ending on and including January 1, 2024, by     % of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors. The maximum number of shares that may be issued upon the exercise of ISOs under our 2014 Plan is                      (subject to adjustment to reflect any split of our common stock).

Shares issued under our 2014 Plan include authorized but unissued or reacquired shares of our common stock. Shares subject to stock awards granted under our 2014 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, do not reduce the number of shares available for issuance under our 2014 Plan. Additionally, shares issued pursuant to stock awards under our 2014 Plan that we repurchase or that are forfeited, as well as shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations related to a stock award, become available for future grant under our 2014 Plan.

Plan Administration

Our board of directors, or a duly authorized committee of our board of directors, will administer our 2014 Plan. Our board of directors may also delegate to one or more of our officers the authority to (1) designate employees (other than officers) to receive specified stock awards, and (2) determine the number of shares of our common stock to be subject to such stock awards. Subject to the terms of our 2014 Plan, the board of directors has the authority to determine the terms of awards, including recipients, the exercise, purchase or strike price of stock awards, if any, the number of shares subject to each stock award, the fair market value of a share of our common stock, the vesting schedule applicable to the awards, together with any vesting acceleration, and the form of consideration, if any, payable upon exercise or settlement of the award and the terms of the award agreements.

The board of directors has the power to modify outstanding awards under our 2014 Plan. The board of directors has the authority to reprice any outstanding option or stock appreciation right, cancel any outstanding stock award in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.

Section 162(m) Limits

At such time as necessary for compliance with Section 162(m) of the Code, no participant may be granted stock awards covering more than 10,000,000 shares of our common stock (subject to adjustment to reflect any split of our common stock) under our 2014 Plan during any calendar year pursuant to stock options, stock appreciation rights and other stock awards whose value is determined by reference to an increase over an exercise price or strike price of at least 100% of the fair market value of our common stock on the date of grant. Additionally, no participant may be granted in a calendar year a performance stock award covering more than 10,000,000 shares of our common stock (subject to adjustment to reflect any split of our common stock) or a performance cash award having a maximum value in excess of $2,000,000 under our 2014 Plan. These limitations are intended to give us the flexibility to grant compensation that will not be subject to the $1,000,000 annual limitation on the income tax deductibility imposed by Section 162(m) of the Code.

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Performance Awards

We believe our 2014 Plan permits the grant of performance-based stock and cash awards that may qualify as performance-based compensation that is not subject to the $1,000,000 limitation on the income tax deductibility imposed by Section 162(m) of the Code. Our compensation committee may structure awards so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. However, we retain the discretion to grant awards under the 2014 Plan that may not qualify for full deductibility.

Our compensation committee may establish performance goals by selecting from one or more performance criteria, including: (1) earnings before interest, taxes, depreciation and amortization; (2) total stockholder return; (3) return on equity or average stockholders’ equity; (4) return on assets, investment, or capital employed; (5) stock price; (6) income (before or after taxes); (7) operating income; (8) pre-tax profit; (9) operating cash flow; (10) sales or revenue targets; (11) increases in revenue or product revenue; (12) expenses and cost reduction goals; (13) improvement in or attainment of working capital levels; (14) implementation or completion of projects or processes; (15) employee retention; (16) stockholders’ equity; (17) capital expenditures; (18) operating profit or net operating profit; (19) growth of net income or operating income; (20) initiation of phases of clinical trials and/or studies by specified dates; (21) patient enrollment rates;(22) budget management; (23) regulatory body approval with respect to products, studies and/or trials; and (24) to the extent that an award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by our board of directors.

Corporate Transactions

Our 2014 Plan provides that in the event of certain specified significant corporate transactions, as defined under our 2014 Plan, each outstanding award will be treated as the administrator determines. The administrator may (1) arrange for the assumption, continuation or substitution of a stock award by a successor corporation, (2) arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation, (3) accelerate the vesting, in whole or in part, of the stock award and provide for its termination prior to the transaction and arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us or (4) cancel the stock award prior to the transaction in exchange for a cash payment, if any, determined by our board of directors. The plan administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner.

Plan Amendment or Termination

Our board of directors has the authority to amend, suspend, or terminate our 2014 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No ISOs may be granted after the tenth anniversary of the date our board of directors adopted our 2014 Plan.

2014 Employee Stock Purchase Plan

Our board of directors adopted our 2014 Employee Stock Purchase Plan, or the ESPP, on                     , 2014. Our stockholders approved the ESPP on                     , 2014. The ESPP will become effective immediately upon the signing of the underwriting agreement for this offering. The maximum aggregate number of shares of our common stock that may be issued under our ESPP is             shares (subject to adjustment to reflect any split of our common stock). Additionally, the number of shares of our common stock reserved for issuance under our ESPP will increase automatically each year, beginning on January 1, 2015 and continuing through and including January 1, 2024, by the least of (1)     % of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; (2)             shares of common stock (subject to adjustment to reflect any split of our common stock); and (3) such lesser number as determined by our board of directors. Shares subject to purchase rights granted under our ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under our ESPP.

Our board of directors will administer our ESPP. Our board of directors may delegate authority to administer our ESPP to our compensation committee.

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Our employees, including executive officers, may have to satisfy one or more of the following service requirements before participating in our ESPP, as determined by the administrator: (1) customary employment for more than 20 hours per week and more than five months per calendar year, or (2) continuous employment for a minimum period of time, not to exceed two years. An employee may not be granted rights to purchase stock under our ESPP if such employee (1) immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of our common stock, or (2) holds rights to purchase stock under our ESPP that would accrue at a rate that exceeds $25,000 worth of our stock for each calendar year that the rights remain outstanding. Under our ESPP, we may grant purchase rights that do not meet the requirements of an employee stock purchase plan because of deviations necessary to permit participation by employees who are foreign nationals or employed outside of the United States, as required by applicable foreign laws.

The administrator may approve offerings with a duration of not more than 27 months, and may specify one or more shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of our common stock will be purchased for the employees who are participating in the offering. The administrator, in its discretion, will determine the terms of offerings under our ESPP including determining which of our designated affiliates will be eligible to participate in the 423 component of our ESPP and which of our designated affiliates will be eligible to participate in the non-423 component of our ESPP. No offerings have been approved at this time.

Our ESPP permits participants to purchase shares of our common stock through payroll deductions or other methods with up to     % of their earnings. The purchase price of the shares will be not less than 85% of the lower of the fair market value of our common stock on the first day of an offering or on the date of purchase.

A participant may not transfer purchase rights under our ESPP other than by will, the laws of descent and distribution or as otherwise provided under our ESPP.

In the event of a specified corporate transaction, such as a merger or change in control, a successor corporation may assume, continue or substitute each outstanding purchase right. If the successor corporation does not assume, continue or substitute for the outstanding purchase rights, the offering in progress may be shortened and a new exercise date will be set, so that the participants’ purchase rights can be exercised and terminate immediately thereafter.

Our ESPP will remain in effect until terminated by the administrator in accordance with the terms of the ESPP. Our board of directors has the authority to amend, suspend or terminate our ESPP, at any time and for any reason.

401(k) Plan

Our 401(k) Plan is a deferred savings retirement plan intended to qualify for favorable tax treatment under Section 401(a) of the Internal Revenue Code. All of our employees are generally eligible to participate in the 401(k) Plan subject to certain eligibility requirements, including requirements relating to age. Under the 401(k) Plan, each employee may make pre-tax contributions of up to 100% of their eligible compensation up to the current statutorily prescribed annual limit on pre-tax contributions under the Code. Employees who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up contributions. We also make safe-harbor matching contributions equal to 100% of the first 3% of the eligible compensation that an employee contributes to the 401(k) Plan and 50% of the next 2% of the eligible compensation that an employee contributes. In addition, we have the ability to make certain other discretionary contributions to certain eligible employees under the 401(k) Plan. Pre-tax contributions by employees and any employer contributions that we make to the 401(k) Plan and the income earned on those contributions are generally not taxable to employees until withdrawn. Employer contributions that we make to the 401(k) Plan are generally deductible when made. Employee contributions are held in trust as required by law. An employee’s interest in his or her pre-tax deferrals, including, with the exception of certain discretionary contributions, any matching contributions made by us, is 100% vested when contributed. For the year ended December 31, 2013 we made $0.3 million in matching contributions.

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Limitation on Liability and Indemnification Matters

Upon the closing of this offering, our certificate of incorporation will contain provisions that limit the liability of our current and former officers and directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:

• any breach of the director’s duty of loyalty to the corporation or its stockholders;

• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

• unlawful payments of dividends or unlawful stock repurchases or redemptions; or

• any transaction from which the director derived an improper personal benefit.

Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies, such as injunctive relief or rescission.

Our certificate of incorporation and our bylaws will provide that we are required to indemnify our officers and directors to the fullest extent permitted by Delaware law. Our bylaws will also provide that, upon satisfaction of certain conditions, we shall advance expenses incurred by an officer and director in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. Our certificate of incorporation and bylaws will also provide our board of directors with discretion to indemnify our officers and employees when determined appropriate by the board. We have entered and expect to continue to enter into agreements to indemnify our directors and executive officers. With certain exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our certificate of incorporation and amended and bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought and we are not aware of any threatened litigation that may result in claims for indemnification.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Other than compensation arrangements, we describe below transactions and series of similar transactions, since January 1, 2011, to which we were a party or will be a party, in which:

• the amounts involved exceeded or will exceed $120,000; and

• any of our directors, executive officers, or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

Compensation arrangements for our directors and named executive officers are described elsewhere in this prospectus.

Sale of Series D Preferred Stock

In April 2012, we sold an aggregate of 32,007,606 shares of our Series D preferred stock at a purchase price of $1.3716 per share for an aggregate purchase price of $43.9 million. The following table summarizes purchases of shares of our Series D preferred stock by our executive officers, directors and holders of more than 5% of our capital stock.

Name	Series D Preferred Stock		Aggregate Purchase Price
Novo A/S(1)		14,581,510	$	19,999,999
Entities affiliated with Sevin Rosen(2)		1,458,152		2,000,001
The Dow Family Trust(3)		1,458,152		2,000,001
Ventures West 8 Limited Partnership(4)		2,733,304		3,749,000
Entities affiliated with H.I.G. Venture Partners(5)		2,192,330		3,007,000
Entities affiliated with Delphi Ventures(6)		2,112,861		2,898,000
TPG Biotechnology Partners II, L.P.(7)		2,112,861		2,898,000
Clay B. Siegall, Ph.D.(8)		72,908		100,001
A. Bruce Montgomery, M.D.(8)		36,454		50,000

(1) Mr. Bisgaard, a member of our board of directors, is employed by Novo Ventures (US) Inc., which provides certain consultancy services to Novo A/S, a Danish limited liability company.

(2) Consists of 1,429,718 shares purchased by Sevin Rosen Fund IX L.P. and 28,434 shares purchased by Sevin Rosen IX Affiliates Fund L.P. Mr. Dow, a member of our board of directors, is a general partner of Sevin Rosen.

(3) Mr. Dow, a member of our board of directors, is a trustee of The Dow Family Trust.

(4) Dr. Bridger, a member of our board of directors, is a director of Five Corners Capital Inc., the general partner of Ventures West 8 Limited Partnership.

(5) Consists of 1,753,864 shares purchased by H.I.G. Venture Partners II, L.P. and 438,466 shares purchased by H.I.G. Ventures—Alder, LLC. Mr. Davidson, a member of our board of directors, is a Managing Director of an affiliate of H.I.G. Venture Partners II, L.P.

(6) Consists of 2,091,942 shares purchased by Delphi Ventures VII, L.P. and 20,919 shares purchased by Delphi BioInvestments VII. Dr. Pakianathan, a member of our board of directors, is a Managing Member of Delphi Ventures.

(7) Dr. Preston, a member of our board of directors, is Managing Director of an affiliate of TPG Biotechnology Partners II, L.P.

(8) Drs. Siegall and Montgomery are members of our board of directors.

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Investor Rights Agreement

We are party to an investor rights agreement that provides holders of our preferred stock, including certain holders of more than 5% of our capital stock and entities affiliated with certain of our directors, with certain registration rights, including the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing. The investor rights agreement also provides for a right of first refusal in favor of certain holders of our stock with regard to certain issuances of our capital stock. The rights of first refusal will not apply to, and will terminate upon, closing of this offering. For a more detailed description of these registration rights, see the section of this prospectus titled “Description of Capital Stock—Registration Rights.”

Voting Agreement

We are party to a voting agreement under which certain holders of our capital stock, including certain holders of more than 5% of our capital stock and entities affiliated with certain of our directors, have agreed to vote in a certain way on certain matters, including with respect to the election of directors. Upon the closing of this offering, the voting agreement will terminate and none of our stockholders will have any special rights regarding the election or designation of members of our board of directors. For a more detailed description of the voting agreement, see the section of this prospectus titled “Management—Board Composition.”

Right of First Refusal and Co-Sale Agreement

We are party to a right of first refusal and co-sale agreement with holders of our preferred stock and our founders, including certain holders of more than 5% of our capital stock and entities affiliated with certain of our directors, pursuant to which the holders of preferred stock have a right of first refusal and co-sale in respect of certain sales of securities by our founders. Upon the closing of this offering, the right of first refusal and co-sale agreement will terminate.

Indemnification Agreements

Our certificate of incorporation that will be in effect upon the closing of this offering provides that we may indemnify our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law, and our bylaws that will be in effect upon the closing of this offering provides that we will indemnify our directors and officers and may indemnify our other employees and other agents to the maximum extent permitted by the Delaware General Corporation Law. In addition, we have entered and expect to continue to enter into agreements to indemnify our directors and executive officers. For more information regarding these agreements, see the section of this prospectus titled “Executive Compensation—Limitations on Liability and Indemnification Matters.”

Change in Control Arrangements

We have entered into change in control severance benefits agreements with each of our executive officers, as described in greater detail in the section of this prospectus titled “Executive Compensation—Employment and Change in Control Severance Benefit Agreements—Executive Change in Control Severance Benefit Plan.”

Other Transactions

We have granted stock options to our executive officers. For a description of these stock options, see the section of this prospectus titled “Executive Compensation.” We have also granted stock options to certain members of the board of directors. For a description of these stock options, see the section of this prospectus titled “Management—Non-Employee Director Compensation.”

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Policies and Procedures for Related Party Transactions

Our board of directors will adopt a policy, effective upon the closing of this offering, that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our capital stock and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the prior consent of our audit committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our common stock or any member of the immediate family of any of the foregoing persons in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest must first be presented to our audit committee for review, consideration and approval. In approving or rejecting any such proposal, our audit committee is to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. We did not have a formal review and approval policy for related party transactions at the time of any of the transactions described above. However, all of the transactions described above were entered into after presentation, consideration and approval by our board of directors, except as noted above.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2013 by the following:

• each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock;

• each of our named executive officers and directors; and

• all of our executive officers and directors as a group.

Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, including options that are exercisable within 60 days of December 31, 2013. Shares of our common stock issuable pursuant to stock options are deemed outstanding for computing the percentage of the person holding such options and the percentage of any group of which the person is a member but are not deemed outstanding for computing the percentage of any other person. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown that they beneficially own, subject to community property laws where applicable. The information does not necessarily indicate beneficial ownership for any other purpose, including for purposes of Section 13(d) and 13(g) of the Securities Act.

Our calculation of the percentage of beneficial ownership prior to this offering is based on 120,465,733 shares of common stock outstanding as of December 31, 2013, assuming the conversion of all outstanding shares of our preferred stock into common stock immediately prior to the closing of this offering. Our calculation of the percentage of beneficial ownership after this offering is based on             shares of common stock outstanding immediately after the closing of this offering, assuming no exercise of the underwriters’ over-allotment option to purchase additional shares of our common stock.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Alder Biopharmaceuticals, Inc., 11804 North Creek Parkway South Bothell, WA 98011.

			Percentage of Shares Beneficially Owned
Name of Beneficial Owner	Number of Shares Beneficially Owned		Before the Offering			After the Offering
5% Stockholders:
Entities affiliated with Sevin Rosen(1)		28,563,930		23.7	%		%
Ventures West 8 Limited Partnership(2)		17,707,416		14.7
Novo A/S(3)		14,581,510		12.1
Entities affiliated with H.I.G. Venture Partners(4)		14,200,877		11.8
Entities affiliated with Delphi Ventures(5)		13,686,935		11.4
TPG Biotechnology Partners II, L.P.(6)		13,686,935		11.4
Named Executive Officers and Directors:
Randall C. Schatzman, Ph.D.(7)		3,994,583		3.2
John A. Latham, Ph.D.(8)		2,840,417		2.3
Mark J. Litton, Ph.D.(9)		2,392,917		2.0
Jeffrey T.L. Smith, M.D., FRCP.(10)		1,490,041		1.2
Stephen M. Dow(1)(11)		30,022,082		24.9
Peter Bisgaard		—		—
Gary Bridger, Ph.D.(2)		17,707,416		14.7
Aaron Davidson(4)		14,200,877		11.8
Heather Preston, M.D.(12)		—		—
Deepa R. Pakianathan, Ph.D.(5)		13,686,935		11.4
Clay B. Siegall, Ph.D.(13)		476,321		*
A. Bruce Montgomery, M.D.(14)		123,953		*
All executive officers and directors as a group (13 persons)(15)		87,321,791		68.0

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* Represents beneficial ownership of less than one percent (1%) of the outstanding common stock.

(1) Represents (a) 27,961,294 shares held by Sevin Rosen Fund IX L.P. (“SRFIX”), (b) 556,089 shares held by Sevin Rosen IX Affiliates Fund L.P. (“SRIX AFF”) and (c) 46,547 shares held by Sevin Rosen Bayless Management Company (“SRBMC”). SRB Associates IX LLC is the general partner of SRB Associates IX L.P. (“SRB AIX”), the general partner of SRFIX and SRIX AFF. Jon W. Bayless (“Bayless”), Stephen M. Dow (“Dow”), John V. Jaggers (“Jaggers”), Stephen L. Domenik (“Domenik”), Jackie R. Kimzey (“Kimzey”), David J. McLean (“McLean”), John T. Oxaal (“Oxaal”), Alan R. Schuele (“Schuele”) and Nicholas G. Sturiale (“Sturiale”) are members of SRB AIX, and as members are deemed to have shared voting and dispositive power of the shares held by SRF IX and SRIX AFF, and each disclaims beneficial ownership of these shares except to the extent of their proportionate interest in these shares. SRBMC beneficially owns 46,547 total preferred shares. Bayless, Dow, Jaggers, Domenik, Kimzey, McLean, Oxaal, Schuele and Sturiale are directors of SRBMC and as directors are deemed to have shared voting and dispositive power of the shares held by SRBMC and disclaim beneficial ownership with no pecuniary interest in these shares. The principal address of each of SRFIX, SRIX AFF. and SRBMC is 13455 Noel Road, Suite 1670, Two Galleria Tower, Dallas, Texas 75240.

(2) Represents 17,707,416 shares held by Ventures West 8 Limited Partnership. Five Corners Capital Inc., the general partner of Ventures West 8 Limited Partnership, has sole voting and investment power with respect to the shares held by Ventures West 8 Limited Partnership. The directors of Five Corners Capital Inc. are Dr. Bridger and Kenneth Galbraith. Dr. Bridger and Kenneth Galbraith disclaim beneficial ownership of all shares except to the extent of their pecuniary interest. The address for each of these entities is Suite 2500—700 West Georgia Street, Vancouver, BC, V7Y 1B3.

(3) Represents 14,581,510 shares held by Novo A/S, a Danish limited liability company. The board of directors of Novo A/S, which consists of Sten Scheibye, Gôran Ando, Jørgen Boe, Jeppe Christiansen, Steen Risgaard and Per Wold Olsen, has shared investment and voting control with respect to the shares held by Novo A/S and may exercise such control only with approval of a majority of the members of the Novo A/S board of directors. As such, no individual member of the Novo A/S board of directors is deemed to hold any beneficial ownership or reportable pecuniary interest in the shares held by Novo A/S. Mr. Bisgaard, a member of our board of directors, is employed by Novo Ventures (US) Inc., which provides certain consultancy services to Novo A/S. Mr. Bisgaard is not deemed a beneficial owner of, and does not have a reportable pecuniary interest in, the shares held by Novo A/S. The address for Novo A/S is Tuborg Havnevej 19, 2900 Hellerup, Denmark.

(4) Represents (a) 11,360,701 shares purchased by H.I.G. Venture Partners II, L.P. and (b) 2,840,176 shares purchased by H.I.G. Ventures—Alder, LLC. The general partner of H.I.G. Venture Partners, II LP. is H.I.G. Venture Advisors, II LLC. The manager of H.I.G. Venture Advisors, II LLC is H.I.G.-GPII, Inc. The owners of H.I.G.-GPII, Inc. are Sami Mnaymneh and Anthony Tamer. These individuals may be deemed to have shared voting and investment power of the shares held by H.I.G. Venture Partners II, L.P. Mr. Davidson, a member of our board of directors, is a Managing Director of an affiliate of H.I.G. Venture Partners II, L.P. Messrs. Tamer, Mnaymneh and Davidson may be deemed to be indirect beneficial owners of the reported securities, but disclaim beneficial ownership in the securities, except to the extent of any pecuniary interest in such securities. The address of each entity affiliated with H.I.G. Venture Partners II, L.P. is 1450 Brickell Avenue, Floor 31, Miami, FL 33131.

(5) Represents (a) 13,551,421 shares held by Delphi Ventures VII, L.P. and (b) 135,514 shares held by Delphi BioInvestments VII, L.P. The general partner of Delphi Ventures VII, L.P and Delphi BioInvestments VII L.P. (together, the “Delphi VII Funds”) is Delphi Management Partners VII, L.L.C. (“DMP VII”). DMP VII may be deemed to have sole voting and dispositive power over the shares held by the Delphi VII Funds. Each of and Deepa R. Pakianathan, a member of our board of directors, James J. Bochnowski, David L. Douglass and Douglas A. Roeder, the Managing Members of DMP VII, may be deemed to share voting and dispositive power over the reported securities. DMP VII and each of these individuals disclaim beneficial ownership of the reported securities held by Delphi VII Funds except to the extent of any pecuniary interest therein. The address for the entities affiliated with Delphi Ventures is 3000 Sand Hill Road, Building 1, Suite 135, Menlo Park, CA 94025.

(6) Represents 13,686,935 shares held by TPG Biotechnology Partners II, L.P., a Delaware limited partnership, whose general partner is TPG Biotechnology GenPar II, L.P., a Delaware limited partnership, whose general partner is TPG Biotechnology GenPar II Advisors, LLC, a Delaware limited liability company, whose sole member is TPG Holdings I, L.P., a Delaware limited partnership, whose general partner is TPG Holdings I-A, LLC, a Delaware limited liability company, whose sole member is TPG Group Holdings (SBS), L.P., a Delaware limited partnership, whose general partner is TPG Group Holdings (SBS) Advisors, Inc., a Delaware corporation. David Bonderman and James G. Coulter are officers and sole shareholders of TPG Group Holdings (SBS) Advisors, Inc. and may therefore be deemed to be the beneficial owners of the shares held by TPG Biotechnology Partners II, L.P. Messrs. Bonderman and Coulter disclaim beneficial ownership of the shares held by TPG Biotechnology Partners II, L.P. except to the extent of their pecuniary interest therein. The address of TPG Group Holdings (SBS) Advisors, Inc. and Messrs. Bonderman and Coulter is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102.

(7) Represents (a) 1,146,667 shares held directly by Dr. Schatzman and (b) 2,847,916 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

(8) Represents (a) 1,146,667 shares held directly by Dr. Latham and (b) 1,693,750 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

(9) Represents (a) 1,146,667 shares held directly by Dr. Litton and (b) 1,246,250 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

(10) Represents (a) 160,000 shares held directly by Dr. Smith and (b) 1,330,041 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

(11) Includes 1,458,152 shares held by The Dow Family Trust, for which Mr. Dow serves as a trustee.

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(12) Dr. Preston, a member of our board of directors, is a TPG Partner. Dr. Preston has no voting or investment power over and disclaims beneficial ownership of the shares held by TPG Biotechnology Partners II, L.P. The address of Dr. Preston is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

(13) Represents (a) 134,447 shares held directly by Dr. Siegall and (b) 341,874 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

(14) Represents (a) 36,454 shares held directly by Dr. Montgomery and (b) 87,499 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

(15) Represents (a) 79,388,212 shares held by our current directors and executive officers and (b) 7,933,579 shares issuable pursuant to stock options exercisable within 60 days of December 31, 2013.

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DESCRIPTION OF CAPITAL STOCK

General

The following description of our capital stock and certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws to be in effect at the time of the closing of the offering are summaries and are qualified by reference these documents. Copies of these documents will be filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part. The descriptions of our common stock and preferred stock reflect changes to our capital structure that will occur upon the closing of this offering.

Upon the closing of this offering, our amended and restated certificate of incorporation will provide for common stock and will authorize shares of undesignated preferred stock, the rights, preferences and privileges of which may be designated from time to time by our board of directors.

Upon the closing of this offering, our authorized capital stock will consist of              shares, all with a par value of $0.0001 per share, of which:

•              shares are designated as common stock; and

•              shares are designated as preferred stock.

As of December 31, 2013, there were outstanding:

• 120,465,733 shares of common stock, which assumes the conversion of all outstanding shares of preferred stock into shares of common stock immediately prior to the closing of this offering; and

• outstanding options to acquire 11,614,300 shares of common stock pursuant to our 2005 Stock Plan, having a weighted-average exercise price of $0.40 per share.

Our outstanding capital stock was held by 56 stockholders of record as of December 31, 2013.

Common Stock

Voting Rights

Each holder of our common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders, except as otherwise expressly provided in our certificate of incorporation or required by applicable law. Cumulative voting for the election of directors is not provided for in our certificate of incorporation, which means that the holders of a majority of our shares of common stock can elect all of the directors then standing for election.

Dividends and Distributions

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine.

Liquidation Rights

Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock and any participating preferred stock outstanding at that time after payment of liquidation preferences, on any outstanding shares of convertible preferred stock and payment of other claims of creditors.

The rights, preferences, and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of holders of shares of any series of convertible preferred stock that we may designate and issue in the future.

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Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption.

Preferred Stock

As of December 31, 2013, there were 115,027,876 shares of preferred stock outstanding, which will convert, immediately prior to the closing of this offering, into 115,027,876 shares of our common stock.

Upon the closing of this offering, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of              shares of preferred stock in one or more series and authorize their issuance. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of our common stock. The issuance of our preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change of control or other corporate action. Upon the closing of this offering, no shares of preferred stock will be outstanding, and we have no present plan to issue any shares of preferred stock.

Options

As of December 31, 2013, options to purchase an aggregate of 11,614,300 shares of common stock were outstanding and 1,865,344 additional shares of common stock were available for future grant under our 2005 Plan. For additional information regarding the terms of these plans, see the section of this prospectus titled “Executive Compensation—Employee Benefit and Stock Plans.”

Registration Rights

We are party to an investor rights agreement which provides that holders of our preferred stock have certain registration rights, as set forth below. This investor rights agreement was entered into in July 2005 and has been amended and/or restated from time to time in connection with our preferred stock financings. The registration of shares of our common stock pursuant to the exercise of registration rights described below would enable the holders to sell these shares without restriction under the Securities Act, when the applicable registration statement is declared effective. We will pay the registration expenses, other than underwriting discounts and commissions, of the shares registered pursuant to the demand, piggyback and Form S-3 registrations described below.

Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include. The demand, piggyback and Form S-3 registration rights described below will expire the later of (1) five years after the effective date of the registration statement containing this prospectus and (2) with respect to each stockholder, at such time as our capital stock is publicly traded and (a) such stockholder is entitled to sell all of its shares pursuant to Rule 144 of the Securities Act or (b) when such stockholder holds less than 1% of our outstanding common stock and is able to sell all its shares in any three-month period without registration in compliance with Rule 144 of the Securities Act.

Demand Registration Rights

The holders of an aggregate of 115,027,876 shares of our common stock, issuable upon conversion of outstanding convertible preferred stock will be entitled to certain demand registration rights. At any time beginning 12 months after the closing of this offering, the holders of a majority of these shares may, on not more than two occasions, request that we file a registration statement having an aggregate offering price to the public of not less than $7,500,000 to register all or a portion of their shares.

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Piggyback Registration Rights

In connection with this offering, the holders of an aggregate of 115,027,876 shares of our common stock, issuable upon conversion of outstanding convertible preferred stock, were entitled to, and the necessary percentage of holders waived, their rights to include their shares of registrable securities in this offering. If we propose to register any of our securities under the Securities Act either for our own account or for the account of other security holders, the holders of these shares will be entitled to certain “piggyback” registration rights allowing them to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act including a registration statement on Form S-3 as discussed below, other than with respect to a demand registration or a registration statement on Forms S-4 or S-8, the holders of these shares are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration.

Form S-3 Registration Rights

The holders of an aggregate of 115,027,876 shares of our common stock, issuable upon conversion of outstanding convertible preferred stock will be entitled to certain Form S-3 registration rights. Such holders may make a request that we register their shares on Form S-3 if we are qualified to file a registration statement on Form S-3. Such request for registration on Form S-3 must cover securities the aggregate offering price of which, before payment of underwriting discounts and commissions, is at least $500,000.

Anti-takeover Provisions

Certificate of Incorporation and Bylaws to be in Effect upon the Closing of this Offering

Our certificate of incorporation to be in effect upon the closing of this offering will provide for our board of directors to be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, our stockholders holding a majority of the voting power of our shares of common stock outstanding will be able to elect all of our directors. The directors may be removed by the stockholders only for cause upon the vote of holders of a majority of the shares then entitled to vote at an election of directors. Furthermore, the authorized number of directors may be changed only by resolution of our board of directors, and vacancies and newly created directorships on our board of directors may, except as otherwise required by law or determined by our board, only be filled by a majority vote of the directors then serving on the board, even though less than a quorum. Our certificate of incorporation and bylaws will provide that all stockholder actions must be effected at a duly called meeting of stockholders and not by a consent in writing. A special meeting of stockholders may be called only by a majority of our whole board of directors, the chair of our board of directors, our chief executive officer or our president. Our bylaws will also provide that stockholders seeking to present proposals before a meeting of stockholders to nominate candidates for election as directors at a meeting of stockholders must provide timely advance notice in writing, and will specify requirements as to the form and content of a stockholder’s notice.

Our certificate of incorporation will further provide that, immediately after this offering, the affirmative vote of holders of at least 66 ²/₃% of the voting power of all of the then outstanding shares of voting stock, voting as a single class, will be required to amend certain provisions of our certificate of incorporation, including provisions relating to the structure of our board of directors, the size of the board, removal of directors, special meetings of stockholders, actions by written consent and cumulative voting. The affirmative vote of holders of at least 66 ²/₃% of the voting power of all of the then outstanding shares of voting stock, voting as a single class, will be required to amend or repeal our bylaws, although our bylaws may be amended by a simple majority vote of our board of directors.

The foregoing provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of our company by replacing our board of directors. Since

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our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change the control of our company.

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of our company. These provisions are also designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy rights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of deterring hostile takeovers or delaying changes in control of our company or our management. As a consequence, these provisions also may inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts.

Section 203 of the Delaware General Corporation Law

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

• before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

• upon closing of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (1) persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

• on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 ²/₃% of the outstanding voting stock that is not owned by the interested stockholder.

In general, Section 203 defines business combination to include the following:

• any merger or consolidation involving the corporation and the interested stockholder;

• any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

• subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

• any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

• the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation.

In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.

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Washington Business Corporation Act

The laws of Washington, where our principal executive offices are located, impose restrictions on certain transactions between certain foreign corporations and significant stockholders. In particular, the Washington Business Corporation Act, or WBCA, prohibits a “target corporation,” with certain exceptions, from engaging in certain “significant business transactions” with a person or group of persons which beneficially owns 10% or more of the voting securities of the target corporation, an “acquiring person,” for a period of five years after such acquisition, unless the transaction or acquisition of shares is approved by a majority of the members of the target corporation’s board of directors prior to the time of acquisition. Such prohibited transactions may include, among other things:

• any merger or consolidation with, disposition of assets to, or issuance or redemption of stock to or from, the acquiring person;

• any termination of 5% or more of the employees of the target corporation as a result of the acquiring person’s acquisition of 10% or more of the shares; and

• allowing the acquiring person to receive any disproportionate benefit as a stockholder.

After the five-year period, a significant business transaction may take place as long as it complies with certain fair price provisions of the statute or is approved at an annual or special meeting of stockholders.

We will be considered a “target corporation” so long as our principal executive office is located in Washington, and: (1) a majority of our employees are residents of the state of Washington or we employ more than one thousand residents of the state of Washington; (2) a majority of our tangible assets, measured by market value, are located in the state of Washington or we have more than $50 million worth of tangible assets located in the state of Washington; and (3) any one of the following: (a) more than 10% of our stockholders of record are resident in the state of Washington; (b) more than 10% of our shares are owned of record by residents of the state of Washington; or (c) 1,000 or more of our stockholders of record are resident in the state of Washington.

If we meet the definition of a target corporation, the WBCA may have the effect of delaying, deferring or preventing a change of control.

Limitations of Liability and Indemnification

See the section of this prospectus titled “Executive Compensation—Limitation on Liability and Indemnification Matters.”

Listing

We intend to apply to have our common stock approved for listing on the NASDAQ Global Market under the trading symbol “ALDR.”

Transfer Agent and Registrar

Upon the closing of this offering, the transfer agent and registrar for our common stock will be             .

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our capital stock. Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

Based on the number of shares outstanding as of December 31, 2013, upon the closing of this offering,              shares of our common stock will be outstanding, assuming no exercise of the underwriters’ over-allotment option to purchase additional shares of common stock and no exercise of outstanding options. Of the outstanding shares, all of the shares sold in this offering will be freely tradable, except that any shares held by our affiliates, as that term is defined in Rule 144 under the Securities Act may only be sold in compliance with the limitations described below.

The remaining shares of our common stock outstanding after this offering are restricted securities as such term is defined in Rule 144 under the Securities Act or are subject to lock-up agreements with us as described below. Following the expiration of the lock-up period, restricted securities may be sold in the public market only if the offer and sale is registered or if the offer and sale qualifies for an exemption from registration under Rule 144 or 701 promulgated under the Securities Act, described in greater detail below.

Rule 144

In general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding a sale and (2) we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

• 1% of the number of shares of our common stock outstanding after this offering, which will equal approximately              shares immediately after the closing of this offering, based on the number of shares of common stock outstanding as of December 31, 2013; or

• the average weekly trading volume of our common stock on the NASDAQ Global Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

provided, in each case, that we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

Rule 701

Rule 701 under the Securities Act as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule 144 but without compliance with certain restrictions of Rule 144, including the holding period requirement. Most of our employees, executive officers, directors or consultants who purchased shares under a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701, but all holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares. However, substantially all Rule 701 shares are subject to lock-up agreements as described below and under the section of this prospectus titled “Underwriting” and will become eligible for sale at the expiration of those agreements.

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Lock-up Agreements

Our officers, directors and substantially all of our stockholders and option holders have agreed with the underwriters that for a period of 180 days following the date of this prospectus, subject to certain exceptions, that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise. Credit Suisse (USA) LLC and Leerink Partners LLC may, in their sole discretion, at any time, release all or any portion of the shares from the restrictions in this agreement.

In addition to the restrictions contained in the lock-up agreement described above, we have entered into agreements with certain security holders, including the investor rights agreement and our standard form option agreement, that contain market stand-off provisions imposing restrictions on the ability of such security holders to offer, sell or transfer our equity securities for a period of 180 days following the date of this prospectus.

Registration Rights

The holders of our preferred stock, or their transferees, are entitled to certain rights with respect to the registration of those shares under the Securities Act. For a description of these registration rights, see the section of this prospectus titled “Description of Capital Stock—Registration Rights.” If the offer and sale of these shares are registered, they will be freely tradable without restriction under the Securities Act.

Equity Incentive Plans

As soon as practicable after the closing of this offering, we intend to file a Form S-8 registration statement under the Securities Act to register the issuance of shares of our common stock under our equity compensation plans and agreements. This registration statement will become effective immediately upon filing, and shares covered by such registration statement will be eligible for sale in the public markets, subject to vesting restrictions, the lock-up agreements described above and Rule 144 limitations applicable to affiliates. For a more complete discussion of our equity compensation plans, see the section of this prospectus titled “Executive Compensation—Employee Benefit and Stock Plans.”

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following summary describes the material U.S. federal income and estate tax consequences of the acquisition, ownership and disposition of our common stock acquired in this offering by Non-U.S. Holders (as defined below). This discussion does not address all aspects of U.S. federal income and estate taxes and does not deal with foreign, state and local consequences that may be relevant to Non-U.S. Holders in light of their particular circumstances, nor does it address U.S. federal tax consequences other than income and estate taxes. Special rules different from those described below may apply to certain Non-U.S. Holders that are subject to special treatment under the Code, such as financial institutions, insurance companies, tax-exempt organizations, broker-dealers and traders in securities, U.S. expatriates, “controlled foreign corporations,” “passive foreign investment companies,” corporations that accumulate earnings to avoid U.S. federal income tax, persons that hold our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or integrated investment or other risk reduction strategy, persons subject to the alternative minimum tax or federal tax on net investment income, partnerships and other pass-through entities, and investors in such pass-through entities. Such Non-U.S. Holders are urged to consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them. Furthermore, the discussion below is based upon the provisions of the Code, and Treasury regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified, perhaps retroactively, so as to result in U.S. federal income and estate tax consequences different from those discussed below. We have not requested a ruling from the U.S. Internal Revenue Service, or IRS, with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions. This discussion assumes that the Non-U.S. Holder holds our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment).

Persons considering the purchase of our common stock pursuant to this offering should consult their own tax advisors concerning the U.S. federal income and estate tax consequences of acquiring, owning and disposing of our common stock in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction, including any state, local or foreign tax consequences.

For the purposes of this discussion, a “Non-U.S. Holder” is, for U.S. federal income tax purposes, a beneficial owner of common stock that is neither a U.S. Holder, nor a partnership (or other entity treated as a partnership for U.S. federal income tax purposes regardless of its place of organization or formation). A “U.S. Holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes (1) an individual who is a citizen or resident of the U.S., (2) a corporation or other entity treated as a corporation created or organized in or under the laws of the U.S., any state thereof or the District of Columbia, (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (4) a trust if it (a) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

Distributions

Subject to the discussion below, distributions, if any, made on our common stock to a Non-U.S. Holder of our common stock to the extent made out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles) generally will constitute dividends for U.S. tax purposes and will be subject to withholding tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. To obtain a reduced rate of withholding under a treaty, a Non-U.S. Holder generally will be required to provide us with a properly executed IRS Form W-8BEN, or other appropriate form, certifying the Non-U.S. Holder’s entitlement to benefits under that treaty. In the case of a Non-U.S. Holder that is an entity, Treasury Regulations and the relevant tax treaty provide rules to determine whether, for purposes of determining the applicability of a tax treaty, dividends will be treated as paid to the entity or to those holding an interest in that entity. If a Non-U.S. Holder holds stock through a financial institution or other agent acting on the holder’s

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behalf, the holder will be required to provide appropriate documentation to such agent. The holder’s agent will then be required to provide certification to us or our paying agent, either directly or through other intermediaries. If you are eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty, you may be able to obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS.

We generally are not required to withhold tax on dividends paid to a Non-U.S. Holder that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the U.S. (and, if required by an applicable income tax treaty, are attributable to a permanent establishment that such holder maintains in the U.S.) if a properly executed IRS Form W-8ECI, stating that the dividends are so connected, is furnished to us (or, if stock is held through a financial institution or other agent, to such agent). In general, such effectively connected dividends will be subject to U.S. federal income tax, on a net income basis at the regular graduated rates. A corporate Non-U.S. Holder receiving effectively connected dividends may also be subject to an additional “branch profits tax,” which is imposed, under certain circumstances, at a rate of 30% (or such lower rate as may be specified by an applicable treaty) on the corporate Non-U.S. Holder’s effectively connected earnings and profits, subject to certain adjustments.

To the extent distributions on our common stock, if any, exceed our current and accumulated earnings and profits, they will first reduce the Non-U.S. Holder’s adjusted basis in our common stock, but not below zero, and then will be treated as gain to the extent of any excess, and taxed in the same manner as gain realized from a sale or other disposition of common stock as described in the next section.

Gain on Disposition of Our Common Stock

Subject to the discussion below regarding backup withholding and foreign accounts, a Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to gain realized on a sale or other disposition of our common stock unless (1) the gain is effectively connected with a trade or business of such holder in the U.S. (and, if required by an applicable income tax treaty, is attributable to a permanent establishment that such holder maintains in the U.S.), (2) the Non-U.S. Holder is a nonresident alien individual and is present in the U.S. for 183 or more days in the taxable year of the disposition and certain other conditions are met or (3) we are or have been a “United States real property holding corporation” within the meaning of Code Section 897(c)(2) at any time within the shorter of the five-year period preceding such disposition or such holder’s holding period. In general, we would be a U.S. real property holding corporation if interests in U.S. real estate comprised (by fair market value) at least half of our business assets. We believe that we are not, and do not anticipate becoming, a U.S. real property holding corporation. Even if we are treated as a U.S. real property holding corporation, gain realized by a Non-U.S. Holder on a disposition of our common stock will not be subject to U.S. federal income tax so long as (a) the Non-U.S. Holder owned, directly, indirectly and constructively, no more than five percent of our common stock at all times within the shorter of (i) the five-year period preceding the disposition or (ii) the holder’s holding period and (b) our common stock is regularly traded on an established securities market. There can be no assurance that our common stock will qualify as regularly traded on an established securities market.

If you are a Non-U.S. Holder described in (1) above, you will be required to pay tax on the net gain derived from the sale at regular graduated U.S. federal income tax rates, and corporate Non-U.S. Holders described in (a) above may be subject to the additional branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. If you are an individual Non-U.S. Holder described in (2) above, you will be required to pay a flat 30% tax on the gain derived from the sale, which gain may be offset by U.S. source capital losses (even though you are not considered a resident of the U.S.).

Information Reporting Requirements and Backup Withholding

Generally, we must report information to the IRS with respect to any dividends we pay on our common stock including the amount of any such dividends, the name and address of the recipient, and the amount, if any,

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of tax withheld. A similar report is sent to the holder to whom any such dividends are paid. Pursuant to tax treaties or certain other agreements, the IRS may make its reports available to tax authorities in the recipient’s country of residence.

Dividends paid by us (or our paying agents) to a Non-U.S. Holder may also be subject to U.S. backup withholding. U.S. backup withholding generally will not apply to a Non-U.S. Holder who provides a properly executed IRS Form W-8BEN or otherwise establishes an exemption.

Under current U.S. federal income tax law, U.S. information reporting and backup withholding requirements generally will apply to the proceeds of a disposition of our common stock effected by or through a U.S. office of any broker, U.S. or foreign, except that information reporting and such requirements may be avoided if the holder provides a properly executed IRS Form W-8BEN or otherwise meets documentary evidence requirements for establishing Non-U.S. Holder status or otherwise establishes an exemption. Generally, U.S. information reporting and backup withholding requirements will not apply to a payment of disposition proceeds to a Non-U.S. Holder where the transaction is effected outside the U.S. through a non-U.S. office of a non-U.S. broker. Information reporting and backup withholding requirements may, however, apply to a payment of disposition proceeds if the broker has actual knowledge, or reason to know, that the holder is, in fact, a U.S. person. For information reporting purposes, certain brokers with substantial U.S. ownership or operations will generally be treated in a manner similar to U.S. brokers.

Any amounts of tax withheld under the backup withholding rules may be credited against the tax liability of persons subject to backup withholding, provided that the required information is timely furnished to the IRS.

Foreign Accounts

A U.S. federal withholding tax of 30% may apply to dividends on and the gross proceeds of a disposition of our common stock paid to a foreign financial institution (as specifically defined by applicable rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). This U.S. federal withholding tax of 30% will also apply to dividends on and the gross proceeds of a disposition of our common stock to a non-financial foreign entity unless such entity provides the withholding agent with either a certification that it does not have any substantial direct or indirect U.S. owners or provides information regarding substantial direct and indirect U.S. owners of the entity. The withholding tax described above will not apply if the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from the rules. Under certain circumstances, a Non-U.S. Holder might be eligible for refunds or credits of such taxes. Holders are encouraged to consult with their own tax advisors regarding the possible implications of these rules to their investment in our common stock.

The IRS has issued guidance providing that the withholding provisions described above will generally apply to payments of dividends made on or after July 1, 2014 and to payments of gross proceeds from a sale or other disposition of common stock on or after January 1, 2017.

Federal Estate Tax

An individual Non-U.S. Holder who is treated as the owner of, or has made certain lifetime transfers of, an interest in our common stock will be required to include the value thereof in his or her gross estate for U.S. federal estate tax purposes, and may be subject to U.S. federal estate tax unless an applicable estate tax treaty provides otherwise, even though such individual was not a citizen or resident of the U.S. at the time of his or her death.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated                     , 2014, we have agreed to sell to the underwriters named below, for whom Credit Suisse Securities (USA) LLC and Leerink Partners LLC are acting as representatives, the following respective numbers of shares of common stock:

Underwriter	Number of Shares
Credit Suisse Securities (USA) LLC
Leerink Partners LLC
Wells Fargo Securities, LLC
Sanford C. Bernstein & Co., LLC
Total

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

We have granted to the underwriters a 30-day option to purchase on a pro rata basis up to             additional shares at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.

The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $          per share. The underwriters and selling group members may allow a discount of $          per share on sales to other broker/dealers. After the initial public offering the representatives may change the public offering price and concession and discount to broker/dealers.

The following table summarizes the compensation and estimated expenses we will pay:

	Per Share		Total
	Without Over- allotment	With Over- allotment	Without Over- allotment	With Over- allotment
Underwriting discounts and commissions paid by us	$	$	$	$
Expenses payable by us	$	$	$	$

We have agreed to reimburse the underwriters for all expenses and fees related to the review by the Financial Industry Regulatory Authority up to $        .

The representatives have informed us that they do not expect sales to accounts over which the underwriters have discretionary authority to exceed 5% of the shares of common stock being offered.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of the representatives for a period of 180 days after the date of this prospectus, except for issuances of (1) the securities to be sold to the underwriters in this offering, (2) any securities issued upon the exercise of options or warrants or the conversion of a security outstanding on the date of this prospectus and described herein, (3) the grant of options or the issuance of securities by us to employees, officers, directors, advisors or consultants pursuant to employee benefit plans in effect on the date of this prospectus and described herein; provided, that each recipient of securities executes and delivers a lock-up agreement in a form satisfactory to the representatives, (4) our filing of a registration statement on Form S-8 with the SEC in respect of any securities issued under or the grant of any award pursuant to an employee benefit plan in effect on the date of this

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prospectus and described herein or (5) the sale or issuance of or entry into an agreement to sell or issue securities in connection with any (a) mergers, (b) acquisition of securities, businesses, properties or other assets, (c) joint ventures, or (d) strategic alliances; provided, that the aggregate number of securities or securities convertible into or exercisable for such securities that we may sell or issue or agree to sell or issue shall not exceed 5% of the total number of shares of our securities issued and outstanding immediately following the completion of this offering; and provided further, that each recipient of securities or securities convertible into or exercisable for such securities executes and delivers a lock-up agreement in a form satisfactory to the representatives.

Our officers, directors and substantially all of our stockholders and option holders have agreed, subject to certain exceptions, that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or make any demand for or exercise any right with respect to the registration of our common stock, without, in each case, the prior written consent of the representatives for a period of 180 days after the date of this prospectus.

The foregoing restrictions to not apply to: (1) the sale and transfer of securities to the underwriters, if any; (2) sales of securities acquired in open market transactions after the completion of this offering or in this offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or other public announcement is required or voluntarily made in connection with such sales (3) transfers of securities (a) by bona fide gift, (b) to the spouse, domestic partner, parent, child or grandchild of the officer, director or security holder or to a trust formed for the benefit of such persons or the officer, director or security holder, (c) by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the officer, director or security holder, (d) if the security holder is an individual, solely by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, (e) to us either (i) pursuant to any contractual arrangement in effect on the date of the agreement that provides for the repurchase of the securities of the officer, director or security holder by us or (ii) in connection with the termination of such person’s employment with us; (f) in connection with a merger or sale of all or substantially all of our company, regardless of how such a transaction is structured, (g) if the security holder is a corporation, partnership or other business entity (i) to another corporation, partnership or other business entity that controls, is controlled by or is under common control with the security holder or (ii) as part of a disposition, transfer or distribution without consideration by the security holder to its equity holders, general partners or limited partners or (h) if the security holder is a trust, to a trustee or beneficiary of the trust; provided that each transferee, donee or distributee executes and delivers a lock-up agreement in a form satisfactory to the representatives; and provided, further, that no filing under Section 16(a) of the Exchange Act, as amended, or the Exchange Act, or other public announcement is required or voluntarily made during the 180-day restricted period; (4) the transfer of securities to us upon a vesting event of the securities or upon the exercise of options to purchase securities, in each case on a “cashless” or “net exercise” basis or to cover tax withholding obligations of the officer, director or security holder in connection with such vesting or exercise; provided that no filing under Section 16(a) of the Exchange Act or other public announcement is required or voluntarily made in connection with such vesting or exercise; or (5) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of securities; provided that such plan does not provide for the transfer of securities during the 180-day restricted period and no public announcement or filing under the Exchange Act regarding the establishment of such plan is required or made voluntarily by or on behalf of the officer, director, security holder or us.

Credit Suisse Securities (USA) LLC and Leerink Partners LLC, on behalf of the underwriters, in their sole discretion, may release the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice. At least three business days before the effectiveness of any release or waiver of the restrictions described above in connection with any transfer of securities by an officer or

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director, Credit Suisse Securities (USA) LLC and Leerink Partners LLC will notify us of the impending release or waiver of any restriction and we have agreed to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver, except where the release or waiver is effected solely to permit a transfer of common stock that is not for consideration and where the transferee has agreed in writing to be bound by the same terms as the lock-up agreements described above to the extent and for the duration that such terms remain in effect at the time of transfer.

The underwriters have reserved for sale at the initial public offering price up to     % shares of the common stock for employees, directors and other persons associated with us who have expressed an interest in purchasing common stock in the offering. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares.

We have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We intend to apply to list the shares of common stock on The NASDAQ Global Market under the symbol “ALDR.”

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.

• Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

• Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.

• Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

• Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The NASDAQ Global Market or otherwise and, if commenced, may be discontinued at any time.

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining

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the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

• the information set forth in this prospectus and otherwise available to the representatives;

• our prospects and the history and prospects for the industry in which we compete;

• an assessment of our management;

• our prospects for future earnings;

• the general condition of the securities markets at the time of this offering;

• the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

• other factors deemed relevant by the underwriters and us.

A prospectus in electronic format will be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

Notice to Investors in the European Economic Area

In relation to each Member State of the European Economic Area that has implemented the Prospectus Directive, each, a Relevant Member State, each underwriter represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, or the Relevant Implementation Date, it has not made and will not make an offer of our common stock to the public in that Relevant Member State prior to the publication of a prospectus in relation to our common stock that has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of our common stock to the public in that Relevant Member State at any time:

• to any legal entity which is a qualified investor as defined in the Prospectus Directive;

• to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the manager for any such offer; or

• in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of our common stock shall require the publication by the Issuer or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any shares of our common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our common stock to be offered so as to enable an investor to decide to purchase or subscribe our common stock, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in each Relevant Member State) includes any relevant implementing measure in each Relevant Member State.

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Notice to Investors in the United Kingdom

Each underwriter:

• has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) in connection with the sale or issue of common stock in circumstances in which section 21 of FSMA does not apply to such underwriter; and

• has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the shares of common stock in, from or otherwise involving the United Kingdom.

This prospectus is directed solely at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments or (iii) are persons falling within Article 49(2)(a) to (d) of The Financial Services and Markets Act (Financial Promotion) Order 2005 (all such persons together being referred to as “relevant persons”). This prospectus must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this prospectus relates is available only to relevant persons and will be engaged in with relevant persons only.

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LEGAL MATTERS

Cooley LLP, Seattle, Washington will pass upon the validity of the shares of common stock offered hereby. As of the date of this prospectus, entities comprised of partners and associates of Cooley LLP and individual attorneys at Cooley LLP beneficially own an aggregate of 321,271 shares of our common stock. Wilson Sonsini Goodrich & Rosati, Professional Corporation, Seattle, Washington, is representing the underwriters in connection with the offering.

EXPERTS

The consolidated financial statements as of December 31, 2013 and 2012 and for each of the two years in the period ended December 31, 2013 included in this prospectus have been so included in reliance on the report (which contains an explanatory paragraph relating to our ability to continue as a going concern as described in Note 1 to the financial statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to this offering of our common stock. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some items of which are contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits and the financial statements and notes filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The exhibits to the registration statement should be referenced for the complete contents of these contracts and documents. A copy of the registration statement and the exhibits filed therewith may be inspected without charge at the public reference room of the SEC, located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements, and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements, and other information with the SEC. These periodic reports, proxy statements, and other information will be available for inspection and copying at the SEC’s public reference facilities and the website of the SEC referred to above. We also maintain a website at www.alderbio.com. After the closing of this offering, you may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference into this prospectus.

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ALDER BIOPHARMACEUTICALS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Comprehensive Loss	F-5
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Alder BioPharmaceuticals, Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of comprehensive loss, of changes in convertible preferred stock and stockholders’ deficit and of cash flows present fairly, in all material respects, the financial position of Alder BioPharmaceuticals, Inc. and its subsidiaries (the “Company”) at December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred operating losses and negative cash flows from operations since inception and will be required to obtain additional financing prior to December 31, 2014 in order to fund its operations. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ PricewaterhouseCoopers LLP

Seattle, Washington

March 17, 2014

F-2

Alder BioPharmaceuticals, Inc.

Consolidated Balance Sheets

	December 31,						Pro Forma December 31,     2013
	2012			2013
(in thousands, except share and per share data)
							(unaudited)
Assets
Current assets
Cash and cash equivalents	$	53,753		$	23,227
Short-term investments		5,620			—
Accounts receivable		128			316
Prepaid expenses and other assets		3,035			1,982
Total current assets		62,536			25,525
Property and equipment, net		1,999			1,214
Restricted cash		119			—
Total assets	$	64,654		$	26,739
Liabilities, convertible preferred stock and stockholders’ deficit
Current liabilities
Accounts payable	$	1,920		$	2,223
Accrued liabilities		1,986			2,128
Deferred revenue		18,525			18,717
Deferred rent		167			—
Total current liabilities		22,598			23,068
Deferred revenue		54,052			35,607
Deferred rent		14			52
Total liabilities		76,664			58,727
Commitments and contingencies (Note 13)
Convertible preferred stock
Series A—$0.0001 par value; 20,736,509 shares authorized, issued and outstanding at December 31, 2012 and 2013; (aggregate liquidation preference of $11,923 at December 31, 2013); no shares issued and outstanding pro forma	$	11,276		$	11,276		$	—
Series B—$0.0001 par value; 25,061,538 shares authorized, issued and outstanding at December 31, 2012 and 2013; (aggregate liquidation preference of $16,290 at December 31, 2013); no shares issued and outstanding pro forma		16,242			16,242			—
Series C—$0.0001 par value; 37,222,223 shares authorized, issued and outstanding at December 31, 2012 and 2013; (aggregate liquidation preference of $40,200 at December 31, 2013); no shares issued and outstanding pro forma);		40,120			40,120			—
Series D—$0.0001 par value; 33,000,000 shares authorized and 32,007,606 shares issued and outstanding at December 31, 2012 and 2013; (aggregate liquidation preference of $43,902 at December 31, 2013); no shares issued and outstanding pro forma		43,736			43,736			—
Stockholders’ deficit
Common stock; $0.0001 par value; 140,000,000 shares authorized; 5,257,944 and 5,437,857 shares issued and outstanding at December 31, 2012 and 2013; 120,465,733 (unaudited) shares issued and outstanding pro forma		1			1			12
Additional paid-in capital		1,819			2,442			113,805
Accumulated deficit		(125,201	)		(145,814	)		(145,814	)
Accumulated other comprehensive (loss) income		(3	)		9			9
Total stockholders’ deficit	$	(123,384	)	$	(143,362	)	$	(31,988	)
Total liabilities, convertible preferred stock and stockholders’ deficit	$	64,654		$	26,739

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Alder BioPharmaceuticals, Inc.

Consolidated Statements of Operations

	Years Ended December 31,
	2012			2013
	(in thousands, except share and per share data)
Revenues
Collaboration and license agreements	$	20,067		$	18,796
Operating expenses
Research and development		30,669			31,883
General and administrative		7,217			7,674
Total operating expenses		37,886			39,557
Loss from operations		(17,819	)		(20,761	)
Other income (expense)
Interest income		101			54
Other income		—			158
Interest expense		(88	)		—
Other expense		—			(64	)
Total other income		13			148
Net loss	$	(17,806	)	$	(20,613	)
Net loss per share—basic and diluted	$	(3.55	)	$	(3.84	)
Weighted average number of common shares used in net loss per share—basic and diluted		5,012,520			5,363,454
Pro forma net loss per share—basic and diluted (unaudited)				$	(0.17	)
Pro forma weighted average number of common shares used in pro forma net loss per share—basic and diluted (unaudited)					120,391,330

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Alder BioPharmaceuticals, Inc.

Consolidated Statements of Comprehensive Loss

	Years Ended December 31,
	2012			2013
	(in thousands)
Net loss	$	(17,806	)	$	(20,613	)
Other comprehensive income (loss):
Unrealized gains on securities available-for-sale, net of tax		2			—
Foreign currency translation loss, net of tax		(3	)		12
Total other comprehensive income (loss)		(1	)		12
Comprehensive loss	$	(17,807	)	$	(20,601	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Alder BioPharmaceuticals, Inc.

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

	Convertible Preferred Stock																				Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Deficit
	Series A				Series B				Series C				Series D				Common Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount
	(in thousands, except for share data)
Balances at December 31, 2011		20,736,509	$	11,276		25,061,538	$	16,242		37,222,223	$	40,120		—	$	—		4,992,099	$	—	$	1,283	$	(107,395	)	$	(2	)	$	(106,114	)
Net loss		—		—		—		—		—		—		—		—		—		—		—		(17,806	)		—			(17,806	)
Other comprehensive loss		—		—		—		—		—		—		—		—		—		—		—		—			(1	)		(1	)
Exercise of stock options		—		—		—		—		—		—		—		—		265,845		1		47		—			—			48
Stock-based compensation		—		—		—		—		—		—		—		—		—		—		489		—			—			489
Issuance of Series D preferred stock upon conversion of promissory note payable		—		—		—		—		—		—		4,285,965		5,879		—		—		—		—			—			—
Issuance of Series D preferred stock, net of issuance costs of $165		—		—		—		—		—		—		27,721,641		37,857		—		—		—		—			—			—
Balances at December 31, 2012		20,736,509	$	11,276		25,061,538	$	16,242		37,222,223	$	40,120		32,007,606	$	43,736		5,257,944	$	1	$	1,819	$	(125,201	)	$	(3	)	$	(123,384	)
Net loss		—		—		—		—		—		—		—		—		—		—		—		(20,613	)		—			(20,613	)
Other comprehensive income		—		—		—		—		—		—		—		—		—		—		—		—			12			12
Exercise of stock options		—		—		—		—		—		—		—		—		179,913		—		48		—			—			48
Stock-based compensation		—		—		—		—		—		—		—		—		—		—		575		—			—			575
Balances at December 31, 2013		20,736,509	$	11,276		25,061,538	$	16,242		37,222,223	$	40,120		32,007,606	$	43,736		5,437,857	$	1	$	2,442	$	(145,814	)	$	9		$	(143,362	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Alder BioPharmaceuticals, Inc.

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2012			2013
	(in thousands)
Operating activities
Net loss	$	(17,806	)	$	(20,613	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		1,042			935
Loss on retirement of property and equipment		—			43
Stock-based compensation		489			575
Interest expense related to convertible promissory note payable		88			—
Changes in operating assets and liabilities
Accounts receivable		1,181			(188	)
Prepaid expenses and other assets		215			1,053
Accounts payable		(223	)		303
Accrued liabilities		650			142
Deferred rent		(149	)		(129	)
Deferred revenue		(15,389	)		(18,253	)
Net cash used in operating activities		(29,902	)		(36,132	)
Investing activities
Purchases of investments		(8,025	)		—
Proceeds from maturities of investments		7,549			5,620
Purchases of property and equipment		(1,031	)		(193	)
Decrease in restricted cash		—			119
Net cash provided by (used in) investing activities		(1,507	)		5,546
Financing activities
Proceeds from issuance of convertible preferred stock, net of stock issuance costs		37,857			—
Proceeds from exercise of stock options		48			48
Net cash provided by financing activities		37,905			48
Effect of exchange rate changes on cash and cash equivalents		(3	)		12
Net increase (decrease) in cash and cash equivalents		6,493			(30,526	)
Cash and cash equivalents
Beginning of period		47,260			53,753
End of period	$	53,753		$	23,227
Supplemental disclosures
Conversion of promissory note payable and accrued interest into convertible preferred stock	$	5,879		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Alder BioPharmaceuticals, Inc.

Notes to Consolidated Financial Statements

1.    Nature of Business

Alder BioPharmaceuticals, Inc. (the “Company”) is a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize therapeutic antibodies with the potential to transform current treatment paradigms. The Company uses its proprietary antibody platform designed to select and manufacture antibodies that have the potential to maximize efficacy as well as speed of onset and durability of therapeutic response. Through collaboration and licensing agreements, the Company has used its proprietary technology to help a major biopharmaceutical partner advance a novel therapeutic antibody to the clinic. The Company was incorporated in Delaware on May 20, 2002 and is located in Bothell, Washington.

Liquidity

The Company had an accumulated deficit as of December 31, 2013. To date, the Company has funded its operations primarily through sales of its convertible preferred stock and payments from its collaboration partners, and will require substantial additional capital for research and product development. The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its product candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company’s products. The Company plans to continue to fund its operations and capital funding needs through equity and/or debt financing, as well as new collaborations, however, there are no assurances that the Company will be able to raise sufficient amounts of funding. The sale of additional equity would result in additional dilution to the Company’s stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict the Company’s operations. If the Company is not able to secure adequate additional funding it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could harm the Company’s business, results of operations and future prospects.

The Company has incurred operating losses and negative cash flows from operations since inception and has insufficient working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company may never become profitable, or if it does, it may not be able to sustain profitability on a recurring basis.

2.    Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements reflect the accounts of Alder BioPharmaceuticals, Inc. and its wholly-owned subsidiaries, Alder BioPharmaceuticals Pty. Ltd. and AlderBio Holdings LLC. All inter-company balances and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”).

Unaudited Pro Forma Financial Information

Each share of Series A, B, C and D convertible preferred stock automatically converts into common stock at the effective conversion rate upon the closing of an initial public offering in which the public offering proceeds exceed $40 million, or upon the affirmative vote by holders of at least two-thirds of the outstanding convertible preferred stock. The unaudited pro forma information as of December 31, 2013 reflects the conversion of all outstanding shares of convertible preferred stock into shares of common stock upon the completion of the Company’s proposed initial public offering.

F-8

Unaudited pro forma basic and diluted net loss per share for the years ended December 31, 2012 and 2013 is computed using the weighted-average number of common shares outstanding after giving effect to the conversion of all shares of convertible preferred stock into shares of the common stock as if such conversion had occurred at the beginning of the period presented, or the date of original issuance, if later.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

The financial statements of the Company’s subsidiaries with a functional currency other than the U.S. dollar have been translated into the Company’s reporting currency, the U.S. dollar. The functional currency for the Company’s Australian subsidiary is the Australian dollar and all assets and liabilities of the Australian subsidiary are translated using year-end exchange rates and revenues and expenses are translated at average exchange rates for the year. Translation adjustments are reflected in the accumulated other comprehensive income (loss) component of stockholders’ deficit. The Company generally transfers funds to the Australian subsidiary to fund operating needs within 30 days of disbursement.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist primarily of money market funds and are stated at cost, which approximates fair value.

Investments

Short-term investments consist of negotiable certificates of deposit. The Company classifies its securities as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income (loss) in stockholders’ deficit. Investments in securities with maturities of less than one year, or where management’s intent is to use the investments to fund current operations, or to make them available for current operations, are classified as short-term investments.

Realized gains and realized losses are included in interest income. Cost of investments for purposes of computing realized and unrealized gains and losses are based on the specific identification method. Interest and dividends earned on all securities are included in interest income.

Restricted Cash

Restricted cash consists of money market funds purchased as a security deposit for a letter of credit issued to the landlord in connection with the Company’s office building lease. In September 2013, the Company entered into an amendment for its office building lease and a letter of credit was no longer required under the lease.

Concentration of Credit Risk and Major Collaborators

The Company is exposed to credit risk from its deposits of cash and cash equivalents and restricted cash in excess of amounts insured by the Federal Deposit Insurance Corporation.

One of the Company’s collaborators accounted for nearly 100% of total revenues for the years ended December 31, 2012 and 2013. This collaborator accounted for nearly 100% of total accounts receivable as of December 31, 2012 and 21% of total accounts receivable as of December 31, 2013.

F-9

Fair Value of Financial Instruments

The Company holds financial instruments that are measured at fair value which is determined according to a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described as follows:

Level 1	Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2	Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3	Inputs are unobservable inputs based on our own assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

The Company established the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and established a fair value hierarchy based on the inputs used to measure fair value.

Property and Equipment

Property and equipment consists of laboratory equipment, computer equipment and software, leasehold improvements, and furniture and fixtures. Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the depreciable assets.

Computer equipment and software	3 - 5 years
Laboratory equipment	4 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of asset’s useful life or remaining term of lease

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statement of operations in the year of disposition. Additions and improvements that increase the value or extend the life of an asset are capitalized. Repairs and maintenance costs are expensed as incurred.

Rent Expense, Deferred Rent and Leasehold Improvements

Rent expense for leases that provide free rent periods and scheduled rent increases during the lease term is recognized on a straight-line basis over the term of the related lease. Leasehold improvements that are funded by landlord incentives or allowances under operating leases are recorded as a component of deferred rent and are amortized as a reduction of rent expense over the term of the related lease.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets in accordance with authoritative guidance on accounting for the impairment or disposal of long-lived assets. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Such impairment is recognized in the event the net book value of such assets exceeds their fair value. If the carrying value of the net assets assigned exceeds the fair value of the assets, then the second step of the impairment test is performed in order to determine the implied fair value. No impairment of long-lived assets occurred in the periods presented.

F-10

Segment and Geographic Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision makers, or decision making group, in making decisions on how to allocate resources and assess performance. Our chief operating decision makers are our chief executive officer and our board of directors. The Company manages its business as one operating segment; however, the Company operates in two geographic regions: United States (Bothell, WA) and Australia. Substantially all of the Company’s assets are located in, and revenues are generated in, the United States.

Revenue Recognition

The Company recognizes revenues from collaboration, license or research service contract arrangements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

The Company evaluates multiple-element arrangements to determine (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a single unit of accounting. This evaluation involves subjective determinations and requires the Company to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that the delivered item has value to the customer on a standalone basis, and if the arrangement includes a general right of return with respect to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in our control. In assessing whether an item has standalone value, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can use any other deliverable for its intended purpose without the receipt of the remaining deliverable, whether the value of the deliverable is dependent on the undelivered item and whether there are other vendors that can provide the undelivered items. For revenue arrangements entered into prior to January 1, 2011, the Company was also required to evaluate whether there was fair value of the undelivered elements in the arrangement. The deliverables under the 2009 Bristol-Myers Squibb (“BMS”) collaboration agreement did not qualify as separate units of accounting and accordingly are accounted for as a single unit of accounting.

The consideration received under an arrangement which contains separate units of accounting, is allocated among the separate units using the relative selling price method. The Company determines the estimated selling price for units of accounting within each arrangement using vendor-specific objective evidence, (“VSOE”), of selling price, if available, third-party evidence, (“TPE”), of selling price if VSOE is not available, or best estimate of selling price, (“BESP”), if neither VSOE nor TPE is available.

When the Company has substantive performance obligations under an arrangement accounted for as one unit of accounting, revenues are recognized using either a time-based or proportional performance-based approach. When the Company cannot estimate the total amount of performance obligations that are to be provided under the arrangement, a time-based method is used. Under the time-based method, revenues are recognized over the arrangement’s estimated performance period based on the elapsed time compared to the total estimated performance period. When the Company is able to estimate the total amount of performance obligations under the arrangement, revenues are recognized using a proportional performance model. Under this approach, revenue recognition is based on costs incurred to date compared to total expected costs to be incurred over the performance period as this is considered to be representative of the delivery of service under the arrangement. Changes in estimates of total expected performance costs or service obligation time period are accounted for prospectively as a change in estimate. Under both methods, revenues recognized at any point in time are limited to the amount of noncontingent payments received or due.

The Company may also perform research and development activities on behalf of collaborative partners that are paid for by the collaborators. For research and development activities which are not determined to be separate units of accounting based on the criteria above, revenues for these research and development activities are

F-11

recognized using the single unit of accounting method for that collaborative arrangement. For research and development activities which are determined to be separate units of accounting, arrangement consideration is allocated and revenues are recognized as services are delivered, assuming the general criteria for revenue recognition noted above have been met. The corresponding research and development costs incurred under these contracts are included in research and development expense in the consolidated statements of operations.

The Company generally invoices its collaborators upon the completion of the effort, based on the terms of each agreement. Amounts earned, but not yet collected from the collaborators, if any, are included in accounts receivable in the accompanying consolidated balance sheets. Deferred revenue arises from payments received in advance of the culmination of the earnings process. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Deferred revenue will be recognized as revenue in future periods when the applicable revenue recognition criteria have been met.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from customers based on their outstanding invoices. Management reviews accounts receivable regularly to determine if any receivable will potentially be uncollectible. Estimates are used to determine the amount of allowance for doubtful accounts necessary to reduce accounts receivable to its estimated net realizable value. At December 31, 2012 and 2013, no allowance for doubtful accounts was considered necessary.

Research and Development

Research and development expenses consist primarily of salaries and benefits, stock-based compensation, occupancy, materials and supplies, contracted research, consulting arrangements and other expenses incurred to sustain the Company’s research and development programs. Research and development costs are expensed as incurred. In-licensing fees and other costs to acquire technologies that are utilized in research and development and that are not expected to have alternative future use are expensed when incurred. For service contracts entered into that include a nonrefundable prepayment for service the upfront payment is deferred and recognized in the consolidated statements of operations as the services are rendered.

Patent Costs

Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These patent related legal costs are reported as a component of general and administrative expenses.

Income Taxes

The Company accounts for income taxes under the liability method. Under the liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and federal income tax bases of assets and liabilities and are measured using the tax income rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the net deferred income tax asset will not be realized.

The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Stock-Based Compensation

The Company recognizes stock-based compensation expense on stock options granted to employees and members of the board of directors based on their estimated grant date fair value using the Black-Scholes option pricing model. This Black-Scholes option pricing model uses various inputs to measure fair value, including estimated market value of the Company’s underlying common stock at the grant date, expected term, estimated volatility, risk-free interest rate and expected dividend yields of the Company’s common stock. The Company

F-12

recognizes stock-based compensation expense, net of estimated forfeitures, in the consolidated statements of operations on a straight-line basis over the requisite service period. The Company applies an estimated forfeiture rate derived from historical and expected future employee termination behavior. If the actual number of forfeitures differs from those estimated by management, adjustments to compensation expense may be required in future periods.

For stock options granted to non-employees, the fair value of the stock options is estimated using the Black-Scholes option pricing model. This model utilizes the estimated market value of the Company’s underlying common stock at the measurement date, the contractual term of the option, estimated volatility, risk-free interest rates and expected dividend yields of the Company’s common stock. The Company recognizes stock-based compensation expense, net of estimated forfeitures, in the consolidated statements of operations on a straight-line basis over the requisite service period. Measurement of stock-based compensation is subject to periodic adjustment for changes in the fair value of the award.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources, and currently consists of net loss, changes in unrealized gains and losses on available-for-sale securities and gains and losses on foreign currency translation related to the Company’s wholly-owned subsidiary in Australia.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update 2013-11 Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists that provides for disclosure requirements related to unrecognized tax benefits in certain situations. The Company will adopt this standard in the first quarter of 2014 and does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

The Company has reviewed other recent accounting pronouncements and concluded that they are either not applicable to the business, or that no material effect is expected on the consolidated financial statements as a result of future adoption.

3.    Fair Value Disclosures

The following table presents the Company’s financial instruments by level within the fair value hierarchy:

	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2012
Cash equivalents
Money market funds	$	53,063	$	—	$	—	$	53,063
Negotiable certificates of deposit		245		—		—		245
Short-term investments
Negotiable certificates of deposit		5,620		—		—		5,620
Restricted cash
Money market funds		119		—		—		119
	$	59,047	$	—	$	—	$	59,047
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2013
Cash equivalents
Money market funds	$	22,238	$	—	$	—	$	22,238

F-13

Accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments.

4.    Short–term Investments

Securities available-for-sale consisted of the following for the date indicated:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
December 31, 2012
Negotiable certificates of deposit	$	5,620	$	—	$	—	$	5,620

All short-term investments had a contractual maturity of one year or less.

The declines in value of these investments are primarily related to changes in interest rates and are considered to be temporary in nature. The Company evaluates, among other things, the duration and extent to which the fair value of a security is less than its cost, the financial condition of the issuer, and the intent to sell, or whether it is more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis. The Company’s realized gains and realized losses on sales of available-for-sale securities were not material for the years ended December 31, 2012 and 2013. No securities have been in a continuous unrealized loss position for more than 12 months as of December 31, 2013.

5.    Prepaid Expenses and Other Assets

Prepaid expenses and other assets consisted of the following for the dates indicated:

	December 31,
	2012		2013
	(in thousands)
Advance payments for research and development	$	2,599	$	1,549
Prepaid insurance and other general and administrative expenses		436		433
	$	3,035	$	1,982

6.    Property and Equipment

Property and equipment consisted of the following for the dates indicated:

	December 31,
	2012			2013
	(in thousands)
Computer equipment and software	$	784		$	833
Laboratory equipment		4,579			4,599
Furniture and fixtures		357			357
Leasehold improvements		1,258			1,321
		6,978			7,110
Less: Accumulated depreciation and amortization		(4,979	)		(5,896	)
	$	1,999		$	1,214

Depreciation and amortization expense totaled $1.0 million and $0.9 million for the years ended December 31, 2012 and 2013, respectively.

F-14

7.    Accrued Liabilities

Accrued liabilities consisted of the following for the dates indicated:

	December 31,
	2012		2013
	(in thousands)
Compensation and benefits	$	1,674	$	1,564
Contracted research and development		121		492
Professional services and other		191		72
	$	1,986	$	2,128

8.    Collaboration and License Agreements

The Company has entered into various collaboration and license agreements with pharmaceutical and biotechnology companies. Revenues recognized and cash payments received under these agreements were as follows:

	Years Ended December 31,
	2012		2013
	(in thousands)
Revenues recognized:
Bristol-Myers Squibb:
Amortization of deferred revenue from upfront payments	$	12,167	$	12,133
Recognition of milestone payments		3,690		2,642
Recognition of reimbursed clinical supply and development costs		4,111		3,921
Bristol-Myers Squibb total		19,968		18,696
Other collaborations		99		100
Total revenues recognized	$	20,067	$	18,796
Cash payments received:
Bristol-Myers Squibb:
Milestone payments	$	3,500	$	—
Reimbursed clinical supply and development costs		2,257		355
Bristol-Myers Squibb total		5,757		355
Other collaborations		100		—
Total cash payments received	$	5,857	$	355

Bristol-Myers Squibb

In November 2009, the Company entered into a collaboration and license agreement with Bristol-Myers Squibb (“BMS”) for the development and commercialization of Clazakizumab, an antibody product candidate for the treatment of rheumatoid arthritis and cancer.

Under the terms of the collaboration agreement, the Company granted to BMS worldwide exclusive rights to develop and commercialize Clazakizumab for all potential indications, except cancer, for which the Company will retain rights, subject to BMS’s option to co-develop Clazakizumab for cancer and commercialize Clazakizumab outside the United States for cancer. BMS has agreed to develop Clazakizumab for RA or another indication in the United States, the five major countries in Europe, and Japan and to commercialize Clazakizumab in each of these countries subject to regulatory approval in them. The Company agreed to provide technology and manufacturing transfer services to BMS, clinical supply in support of Phase 2 clinical trials, and support for an optimization and/or a discovery backup program to Clazakizumab. The Company expects to complete its deliverables under the arrangement by December 2016.

F-15

The Company received a non-refundable upfront cash payment of $85 million and an aggregate of $18.5 million milestone payments from BMS. The Company may receive additional potential development-based and regulatory-based milestone payments of up to $746 million across a range of indications, potential sales-based milestones that, under certain circumstances, may be up to $500 million, and tiered royalties starting in the mid-teens up to 20% of net sales, subject to certain reductions. The Company is reimbursed for certain clinical supply and development costs. Unless earlier terminated, the agreement continues in effect until the expiration of BMS’ royalty payment obligations. BMS may terminate the agreement with a specified notice period prior to drug approval due to safety concerns. Either party may terminate on a region-by-region basis for the other party’s material breach of the agreement which is not cured within a specified cure period. In the event of termination by us for material breach by BMS or termination by BMS without cause, BMS would be required to transfer certain clinical data and regulatory materials to the Company and grant us a limited, exclusive license to certain intellectual property rights in exchange for us paying to BMS a low single to mid-single digit royalty on net sales by us of Clazakizumab depending on the development stage at the time of such termination.

The Company’s deliverables under the arrangement did not qualify as separate units of accounting. The license rights to Clazakizumab, delivered at the inception of the arrangement, did not have stand-alone value apart from the other deliverables in the arrangement. In addition, there was not sufficient objective and reliable evidence of the fair value for certain of the undelivered elements in the arrangement. The Company expects to provide the other deliverables through December 2016. The Company recognizes revenue relating to the deliverables in the agreement as a single unit of accounting using a time-based proportional performance model. The proportional performance model results in the recognition of the upfront license fee and other payments received under the arrangement over the estimated performance period of seven years based on the passage of time.

Other Collaborations

The Company entered into an agreement with a biotechnology company to provide research services under specified work plans. Payments received under this agreement was deferred and recognized as revenue in accordance with the Company’s revenue recognition policy.

9.    Common and Convertible Preferred Stock

There were 5,257,944 and 5,437,857 shares of common stock issued and outstanding as of December 31, 2012 and 2013, respectively.

The Company has reserved for future issuance the following number of shares of common stock:

	December 31, 2013
Conversion of Series A preferred stock		20,736,509
Conversion of Series B preferred stock		25,061,538
Conversion of Series C preferred stock		37,222,223
Conversion of Series D preferred stock		33,000,000
Stock options outstanding		11,614,300
Stock options available for grant		1,865,344
		129,499,914

Common Stock

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of other classes of stock outstanding.

F-16

Convertible Preferred Stock

The Series A, Series B, Series C and Series D convertible preferred stock (collectively, the “preferred stock”), together with their respective rights and preferences, are as follows:

In April 2012, the Company issued 32,007,606 shares of Series D convertible preferred stock at a price of $1.37 per share, or $43.9 million in the aggregate, which included shares issued upon the conversion of a promissory note payable and accrued interest thereon in the amount of $5.9 million and shares issued to related parties in the aggregate amount of $36.7 million. Cash proceeds, net of issuance costs and the conversion of the promissory note payable were $37.9 million.

In 2007, the Company issued 37,222,223 shares of Series C convertible preferred stock at a purchase price of $1.08 per share. Cash proceeds, net of issuance costs, were $40.1 million.

In 2006 and 2007, the Company issued 25,061,538 shares of Series B convertible preferred stock at a purchase price of $0.65 per share. Cash proceeds, net of issuance costs, were $16.2 million.

In 2005, the Company issued 20,736,509 shares of Series A convertible preferred stock at a purchase price of $0.575 per share, which included shares issued upon conversion of notes payable and accrued interest thereon in the amount of $3.6 million. Cash proceeds, net of issuance costs and the conversion of the promissory notes payable were $7.7 million.

Voting

The Series A, B, C and D convertible preferred stock carry one vote per share. As long as at least 4,000,000 shares of each series of preferred stock remain outstanding, the holders of Series A convertible preferred stock shall be entitled to elect two members of the board of directors, the holders of Series B convertible preferred stock shall be entitled to elect one member of the board of directors, the holders of Series C convertible preferred stock shall be entitled to elect two members of the board of directors and the holders of Series D convertible preferred stock shall be entitled to elect one member of the board of directors. The common stockholders are entitled to elect two members of the board. The remaining board members are elected by holders of both common and preferred stock, voting as a single class.

Dividends

The holders of Series A, B, C and D convertible preferred stock are entitled to receive dividends at an annual rate of $0.0345, $0.039, $0.0648 and $0.0823 per share, respectively, and are payable when and if declared by the board of directors. Such dividends are not cumulative. No dividends have been paid or declared to date.

Redemption and Conversion

The Series A, B, C and D convertible preferred stock are not redeemable. The Series A, B, C and D convertible preferred stock are convertible at the option of the holder at any time into common stock on a one-for-one basis, subject to adjustments for antidilution. Each share of Series A, B, C and D convertible preferred stock automatically converts into common stock at the effective conversion rate upon the closing of an initial public offering in which the public offering proceeds exceed $40 million, or upon the affirmative vote by holders of at least two-thirds of the outstanding shares of preferred stock.

The Series A, B, C and D convertible preferred stock contain a provision that upon a change of control of the Company, the Series A, B, C and D convertible preferred stock is redeemable at the holder’s option and, therefore, the balances have been classified outside of stockholders’ deficit in the accompanying consolidated balance sheets.

Liquidation

Upon liquidation, dissolution or winding up of the Company, the holders of Series A, B, C and D convertible preferred stock are entitled to receive the amount of $0.575, $0.65, $1.08 and $1.3716 per share, respectively, as adjusted for any stock dividends or stock splits, plus all declared but unpaid dividends. If the proceeds of a liquidation event are insufficient to permit payment to the holders of preferred stock of the entire amount, then the proceeds shall be distributed ratably among the holders of the preferred stock in proportion to the full preferential amount that each such holder is entitled to receive.

F-17

10.    Stock-based Compensation

The Company’s 2005 Stock Option Plan (the “Plan”) authorizes the grant of options to employees, directors, consultants and advisors for up to 14,640,000 shares of the Company’s common stock. All options granted have a ten year term and generally vest and become exercisable over four years of continued employment or service as defined in each option agreement. A majority of the unvested stock options will vest upon the sale of all or substantially all of the stock or assets of the Company. The board of directors determines the option exercise price and may designate stock options granted as either incentive or nonstatutory stock options. The Company generally grants stock options with exercise prices that equal or exceed the fair value of the common stock on the date of grant.

At December 31, 2013, options to purchase up to 11,614,300 shares of common stock were outstanding and 1,865,344 shares were reserved for future grants under the Plan.

A summary of the Company’s stock option activity and related information follows:

	Shares			Weighted-average Exercise Price		Weighted-average remaining contractual life (years)		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2012		12,114,088		$	0.40		6.6	$	3,090
Granted		285,500			0.71
Exercised		(179,913	)		0.27
Expired or forfeited		(605,375	)		0.63
Outstanding at December 31, 2013		11,614,300		$	0.40		5.6	$	8,766
Exercisable at December 31, 2013		9,316,108		$	0.33		4.9	$	7,623
Vested and expected to vest at December 31, 2013		11,376,426		$	0.39		5.5	$	8,648

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards using various assumptions that require management to apply judgment and make estimates, including:

Volatility

Since the Company is privately held as of the date of these consolidated financial statements, it does not have relevant historical data to support its expected volatility. As such, the expected volatility has been determined using a weighted-average of the historical volatilities of a representative group of publicly traded biopharmaceutical companies for a period equal to the expected term of the option grant.

Expected Term

For purposes of determining the expected term of the awards in the absence of sufficient historical data relating to stock-option exercises, the Company uses the “simplified method” as prescribed by the Securities and Exchange Commission to estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of the Company’s stock options, taking into consideration multiple vesting tranches and expectations of the future employee behavior.

Risk-free Rate

The risk-free interest rates used in the Black-Scholes option pricing model are based on the implied yield currently available for U.S. Treasury securities with maturities similar to the expected term of the stock options being valued.

F-18

Dividends

The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future, and therefore uses an expected dividend yield of zero in the Black-Scholes option pricing model.

In determining the fair value of stock options granted, the following weighted-average assumptions were used in the Black-Scholes option pricing model for awards granted in the periods indicated:

	Years Ended December 31,
	2012			2013
	(in thousands, except per share data)
Volatility		70.8	%		69.3	%
Expected term (years)		6.1			5.9
Risk-free interest rate		0.9	%		1.1	%
Dividend rate		0.0	%		0.0	%

The following table summarizes the Company’s stock option values:

	Years Ended December 31,
	2012		2013
	(in thousands, except per share data)
Weighted-average fair value of option share granted during the period	$	0.40	$	0.43
Total intrinsic value of stock options exercised		120		90
Total fair value of stock options vested		345		702

Stock Compensation

The Company recognizes compensation expense for only the portion of options expected to vest, on a straight-line basis over the requisite service period. Management has applied an estimated forfeiture rate that was derived from historical employee termination behavior. If the actual number of forfeitures differs from these estimates, additional adjustments to compensation expense may be required in future periods. The following table presents stock-based compensation expense included in the Company’s consolidated statements of operations:

	Years Ended December 31,
	2012		2013
	(in thousands)
Research and development	$	254	$	286
General and administrative		235		289
	$	489	$	575

As of December 31, 2013, the total unrecognized compensation cost was $0.9 million and will be recognized on a straight-line basis over the weighted-average remaining service period of 2.4 years.

F-19

11.    Income Taxes

Loss before income taxes consisted of the following:

	Years Ended December 31,
	2012			2013
	(in thousands)
Domestic	$	(16,401	)	$	(20,766	)
Foreign		(1,405	)		153
Loss before income taxes	$	(17,806	)	$	(20,613	)

The effective income tax rate of our provision for income taxes differed from the federal statutory rate of 34% as follows:

	Years Ended December 31,
	2012			2013
Federal statutory income tax rate		34.0	%		34.0	%
Foreign income tax rate differential		(0.3	)		(0.0	)
Stock-based compensation		(0.7	)		(0.7	)
Research and development credits		0.5			7.3
Other		(0.2	)		0.0
Change in valuation allowance		(33.3	)		(40.6	)
Effective income tax rate		0.0	%		0.0	%

The effects of temporary differences and carry forwards that give rise to deferred income tax assets and liabilities are as follows:

	December 31,
	2012			2013
	(in thousands)
Deferred income tax assets:
Net operating loss carryforwards	$	16,643		$	29,871
Deferred revenue		24,676			18,419
Research and development credits		3,231			4,689
Other		518			449
Total deferred income tax assets		45,068			53,428
Less: Valuation allowance		(45,068	)		(53,428	)
Net deferred income tax assets	$	—		$	—

At December 31, 2013, the Company had U.S. net operating loss carryforwards of $87.8 million, which may be used to offset future taxable income. The net operating loss carryforwards expire from 2025 to 2033 if not utilized. In addition, the Company has U.S. research and development tax credit carryforwards of $4.7 million, which will expire from 2024 to 2033.

Utilization of net operating losses and tax credit carryforwards are subject to certain limitations under Section 382 and 383 of the Internal Revenue Code of 1986, as amended, in the event of a change in the Company’s ownership. A change in control is generally defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three year period. The Company performed a Section 382 analysis through 2009 and determined that an ownership change occurred in 2005. Based on the analysis performed, however, the Company does not believe that the Section 382 annual limitation will impact the Company’s ability to utilize the tax attributes that existed as of the date of the ownership change in a material manner. Although a formal Section 382 analysis has not been performed after 2009, the Company continues to monitor ownership change for purposes of Section 382. As of December 31, 2013, the Company does not believe that another change in control has occurred since the ownership change in 2005. If it is determined that an

F-20

additional Section 382 ownership change has occurred, the net operating losses and tax credit carryforwards may be subject to an additional limitation such that a portion may not be utilizable.

Management believes that it is not more likely than not that future operations will generate sufficient taxable income to realize the benefit of the deferred income tax assets. Accordingly, a valuation allowance has been recorded against the full value of the deferred income tax assets.

The table below summarizes changes in the deferred tax valuation allowance:

	Balance at Beginning of Year		Charged to Costs and Expenses		Write-offs		Balance at End of Year
	(in thousands)
Deferred income tax valuation allowance:
For the year ended December 31, 2012	$	39,132	$	5,936	$	—	$	45,068
For the year ended December 31, 2013		45,068		8,360		—		53,428

The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position in accordance with ASC 740. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority.

The total balance of unrecognized gross tax benefits was as follows:

	Years Ended December 31,
	2012		2013
	(in thousands)
Unrecognized tax benefits at beginning of year	$	126	$	126
Additions based on current year tax positions		—		257
Unrecognized tax benefits at end of year	$	126	$	383

In addition to any uncertain tax positions, it is the Company’s policy to recognize potential accrued interest and/or penalties related to such positions within income tax expense. For 2012 and 2013, the Company has not recognized any liability related to uncertain tax positions and does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months.

The Company has a number of U.S. tax years still open for examination as a result of the net operating loss carry forwards. Accordingly, the Company is subject to examination for U.S. tax years 2002 to present. The Company is also subject to examination of foreign returns tax years 2012 to present as the statute of limitations is still open.

12.    Defined Contribution Plan

The Company sponsors a defined contribution plan (the “401(k) Plan”) for its full time employees, with eligibility commencing on the month following an employee’s date of hire. Employee contributions to the 401(k) Plan are based on a percentage of the employee’s gross compensation, limited by Internal Revenue Service guidelines for such plans. The 401(k) Plan provides for matching and discretionary contributions by the Company, which were $0.3 million for each of the years ended December 31, 2012 and 2013.

13.    Commitments and Contingencies

The Company leases 36,654 square feet of office space in two adjacent buildings in Bothell, Washington, for its research and development and administrative activities. In September 2013, the Company and the landlord entered into an amendment to the lease under which, among other things, the lease term was extended to February 28, 2017, the Company was given an option to lease additional space and the Company was given an option to renew the lease for an additional three-year term at the market rates prevailing at the time of renewal. Rent expense totaled $0.8 million for each of the years ended December 31, 2012 and 2013.

F-21

The Company had contract manufacturing and purchase obligations totaling $4.9 million at December 31, 2013 related to manufacturing its product candidates for use in clinical trials, including long-term stability studies.

Future aggregate minimum payments under noncancelable operating leases as of the date indicated are as follows:

	December 31, 2013
	(in thousands)
Years Ending
2014	$	489
2015		612
2016		639
2017		109
Total minimum lease payments	$	1,849

14.    Litigation

From time to time, the Company may become involved in litigation relating to claims arising from the ordinary course of business. Management believes that there are currently no claims or actions pending against the Company, the ultimate disposition of which could have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

15.    Net Loss Per Share and Pro Forma Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted average common shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method.

	Years Ended December 31,
	2012			2013
Net loss (in thousands)	$	(17,806	)	$	(20,613	)
Weighted-average common shares outstanding - basic and diluted		5,012,520			5,363,454
Net loss per share-basic and diluted	$	(3.55	)	$	(3.84	)

The following convertible preferred stock and outstanding stock options were excluded from the calculation of diluted net loss per share for periods ended as of the dates indicated because including them would have had an anti-dilutive effect. Therefore, basic and diluted net loss per share were the same for all periods presented. The convertible preferred stock numbers shown in the table are on a common stock equivalent basis.

	December 31,
	2012		2013
Conversion of Series A preferred stock		20,736,509		20,736,509
Conversion of Series B preferred stock		25,061,538		25,061,538
Conversion of Series C preferred stock		37,222,223		37,222,223
Conversion of Series D preferred stock		32,007,606		32,007,606
Stock options		12,114,088		11,614,300
		127,141,964		126,642,176

F-22

Unaudited pro forma net loss per share is calculated as follows:

	Year Ended December 31, 2013
	(unaudited)
Net loss (in thousands)	$	(20,613	)
Weighted-average common shares outstanding		5,363,454
Adjustment for conversion of convertible preferred stock		115,027,876
Weighted-average common shares outstanding - basic and diluted		120,391,330
Pro forma net loss per share-basic and diluted	$	(0.17	)

Unaudited pro forma basic and diluted net loss per share for the year ended December 31, 2013 is computed using the weighted-average number of common shares outstanding after giving effect to the conversion of all shares of convertible preferred stock into shares of the common stock as if such conversion had occurred at the beginning of the period presented, or the date of original issuance, if later. Outstanding stock options were excluded from the calculation of pro forma net loss per share because including them would have had an anti-dilutive effect.

16.    Subsequent Events

The Company evaluated subsequent events through March 17, 2014, the date these consolidated financial statements were available to be issued.

F-23

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by us in connection with the sale and distribution of our common stock being registered. All amounts are estimates except for the SEC registration fee, the FINRA filing fee, and the listing fee of the NASDAQ Global Market.

	Payable by the Registrant
SEC registration fee		$14,812
FINRA filing fee		17,750
NASDAQ Global Market listing fee		*
Legal fees and expenses		*
Accounting fees and expenses		*
Printing and engraving expenses		*
Transfer agent and registrar fees and expenses		*
Blue sky fees and expenses		*
Miscellaneous fees and expenses		*
Total	$	*

* To be completed by amendment.

Item 14. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.

Our certificate of incorporation that will be in effect upon the closing of this offering provides that we may indemnify our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law, and our bylaws that will be in effect upon the closing of this offering provides that we will indemnify our directors and officers and may indemnify our other employees and other agents to the maximum extent permitted by the Delaware General Corporation Law.

We have entered and expect to continue to enter into agreements to indemnify our directors and executive officers. With certain exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding.

We maintain insurance policies that indemnify our directors and officers against various liabilities arising under the Securities Act and the Exchange Act of 1934, as amended, that might be incurred by any director or officer in his capacity as such.

In an underwriting agreement we enter into in connection with the sale of our common stock being registered hereby, or the Underwriting Agreement, the underwriters will agree to indemnify, under certain circumstances, us, our officers, our directors, and our controlling persons within the meaning of the Securities Act, against certain liabilities.

II-1

Item 15. Recent Sales of Unregistered Securities

The following sets forth information regarding all unregistered securities sold since January 1, 2011:

(1) On April 16, 2012, we issued an aggregate of 32,007,606 shares of our Series D convertible preferred stock to 15 accredited investors at a per share price of $1.3716, for aggregate consideration of $43,901,633. The offers, sales and issuances of the securities described in this paragraph were exempt from registration under Section 4(a)(2) (formerly 4(2)) of the Securities Act in that the transactions were by an issuer not involving any public offering.

(2) From January 1, 2011 to date, we have granted stock options under our 2005 Stock Plan to purchase an aggregate of 5,038,450 shares of our stock at an exercise price ranging between $0.63 and $1.23 per share to a total of 86 employees, directors and consultants. Of these, stock options to purchase an aggregate of 613,875 shares have been cancelled without being exercised, 12,916 have been exercised for aggregate proceeds of $8,137 and options to purchase 4,411,659 shares remain outstanding. The offers, sales and issuances of the securities described in this paragraph were exempt from registration under compensatory benefit plans and contracts relating to compensation as provided under Rule 701 promulgated under the Securities Act.

We did not pay or give, directly or indirectly, any commission or other remuneration, including the underwriting discounts and commissions, in connection with any of the issuances of securities listed above. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their employment or other relationship with us or through other access to information provided by us, to information about us. The sales of these securities were made without any general solicitation or advertising.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

Exhibit No.	Description
1.1*	Form of Underwriting Agreement.
3.1	Amended and Restated Certificate of Incorporation, as amended and as currently in effect.
3.2*	Form of Amended and Restated Certificate of Incorporation, to become effective upon closing of this offering.
3.3	Bylaws, as currently in effect.
3.4*	Form of Amended and Restated Bylaws, to become effective upon closing of this offering.
4.1	Amended and Restated Investors’ Rights Agreement, dated as of April 16, 2012, by and among Alder BioPharmaceuticals, Inc. and certain of its stockholders.
5.1*	Opinion of Cooley LLP.
10.1*	Form of Indemnity Agreement between the Alder BioPharmaceuticals, Inc. and its directors and officers.
10.2+	2005 Stock Plan, as amended.
10.3+	Forms of Notice of Stock Option Grant, Stock Option Agreement and Exercise Notice and Restricted Stock Purchase Agreement for 2005 Stock Plan.
10.4+*	2014 Equity Incentive Plan.
10.5+*	Form of Stock Option Grant Notice and Option Agreement.
10.6+*	2014 Employee Stock Purchase Plan.
10.7+	Form of Executive Change in Control Severance Benefits Plan.

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Exhibit No.	Description
10.8†	Collaboration and License Agreement by and among AlderBio Holdings LLC, Alder BioPharmaceuticals, Inc. and Bristol-Myers Squibb Company, dated November 6, 2009.
10.9†	Addendum No. 1 to Collaboration and License Agreement by and among AlderBio Holdings LLC, Alder BioPharmaceuticals, Inc. and Bristol-Myers Squibb Company, dated January 21, 2011.
10.10†	Master Services Agreement by and between Alder BioPharmaceuticals, Inc. and FUJIFILM Diosynth Biotechnologies U.S.A., Inc., dated October 14, 2013.
10.11†	License Agreement by and between Alder BioPharmaceuticals, Inc. and the Keck Graduate Institute of Applied Life Sciences, dated October 15, 2004.
10.12	Lease by and between Alder BioPharmaceuticals, Inc. and RREEF American REIT II Corp. KK, dated August 5, 2005.
10.13	First Amendment to Lease by and between Alder BioPharmaceuticals, Inc. and RREEF American Reit II Corp. KK, dated February 1, 2008.
10.14	Second Amendment to Lease by and between Alder BioPharmaceuticals, Inc. and KBS North Creek, LLC, as successor-in-interest to RREEF American REIT II Corp. KK, dated September 23, 2010.
10.15	Third Amendment to Lease by and between Alder BioPharmaceuticals, Inc. and KBS North Creek, LLC, as successor-in-interest to RREEF American REIT II Corp. KK, dated August 21, 2013.
10.16+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Randall C. Schatzman, Ph.D. dated as of July 19, 2005.
10.17+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Randall C. Schatzman, Ph.D. dated as of April 13, 2012.
10.18+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and John A. Latham, Ph.D., dated as of July 19, 2005.
10.19+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and John A. Latham, Ph.D., dated as of April 13, 2012.
10.20+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Mark J. Litton, Ph.D., MBA, dated as of July 19, 2005.
10.21+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Mark J. Litton, Ph.D., MBA, dated as of April 13, 2012.
10.22+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Jeffrey T.L. Smith, M.D., FRCP, dated as of July 19, 2005.
10.23+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Jeffrey T.L. Smith, M.D., FRCP, dated as of April 13, 2012.
10.24†*	Master Product Development and Clinical Supply Agreement by and between Alder BioPharmaceuticals, Inc. and Althea Technologies, dated March 21, 2011.
10.25†*	First Amendment to Master Product Development and Clinical Supply Agreement between Alder BioPharmaceuticals, Inc. and Althea Technologies, Inc., dated March 15, 2013.
21.1	Subsidiaries of Alder BioPharmaceuticals, Inc.
23.1	Consent of Independent Registered Public Accounting Firm.
23.2*	Consent of Cooley LLP (included in Exhibit 5.1).
24.1	Power of Attorney (see signature page hereto).

* To be filed by amendment.

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† Confidential treatment will be requested with respect to certain portions of this exhibit. Omitted portions will be submitted separately to the U.S. Securities and Exchange Commission.

+ Indicates management contract or compensatory plan.

(b) Financial Statement Schedules

No financial statement schedules are provided because the information called for is not required or is shown in the consolidated financial statements or related notes.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, State of Washington, on March 19, 2014.

ALDER BIOPHARMACEUTICALS, INC.
By:	/s/ Randall C. Schatzman
	Randall C. Schatzman, Ph.D.
	President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitute and appoint Randall C. Schatzman and Larry K. Benedict, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by this registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Randall C. Schatzman Randall C. Schatzman, Ph.D.	President, Chief Executive Officer and Director (Principal Executive Officer)		March 19, 2014
/s/ Larry K. Benedict Larry K. Benedict	Senior Vice President, Finance (Principal Financial and Accounting Officer)		March 19, 2014
/s/ Stephen M. Dow Stephen M. Dow	Chairman of the Board of Directors		March 19, 2014
/s/ Peter Bisgaard Peter Bisgaard	Director		March 19, 2014
/s/ Gary Bridger Gary Bridger, Ph.D.	Director		March 19, 2014
/s/ Aaron Davidson Aaron Davidson	Director		March 19, 2014

II-5

Signature	Title	Date
/s/ A. Bruce Montgomery A. Bruce Montgomery, M.D.	Director		March 19, 2014
/s/ Deepa R. Pakianathan Deepa R. Pakianathan, Ph.D.	Director		March 19, 2014
/s/ Heather Preston Heather Preston, M.D.	Director		March 19, 2014
/s/ Clay B. Siegall Clay B. Siegall, Ph.D.	Director		March 19, 2014

II-6

EXHIBIT INDEX

Exhibit No.	Description
1.1*	Form of Underwriting Agreement.
3.1	Amended and Restated Certificate of Incorporation, as amended and as currently in effect.
3.2*	Form of Amended and Restated Certificate of Incorporation, to become effective upon closing of this offering.
3.3	Bylaws, as currently in effect.
3.4*	Form of Amended and Restated Bylaws, to become effective upon closing of this offering.
4.1	Amended and Restated Investors’ Rights Agreement, dated as of April 16, 2012, by and among Alder BioPharmaceuticals, Inc. and certain of its stockholders.
5.1*	Opinion of Cooley LLP.
10.1*	Form of Indemnity Agreement between the Alder BioPharmaceuticals, Inc. and its directors and officers.
10.2+	2005 Stock Plan, as amended.
10.3+	Forms of Notice of Stock Option Grant, Stock Option Agreement and Exercise Notice and Restricted Stock Purchase Agreement for 2005 Stock Plan.
10.4+*	2014 Equity Incentive Plan.
10.5+*	Form of Stock Option Grant Notice and Option Agreement.
10.6+*	2014 Employee Stock Purchase Plan.
10.7+	Form of Executive Change in Control Severance Benefits Plan.
10.8†	Collaboration and License Agreement by and among AlderBio Holdings LLC, Alder BioPharmaceuticals, Inc. and Bristol-Myers Squibb Company, dated November 6, 2009.
10.9†	Addendum No. 1 to Collaboration and License Agreement by and among AlderBio Holdings LLC, Alder BioPharmaceuticals, Inc. and Bristol-Myers Squibb Company, dated January 21, 2011.
10.10†	Master Services Agreement by and between Alder BioPharmaceuticals, Inc. and FUJIFILM Diosynth Biotechnologies U.S.A., Inc., dated October 14, 2013.
10.11†	License Agreement by and between Alder BioPharmaceuticals, Inc. and the Keck Graduate Institute of Applied Life Sciences, dated October 15, 2004.
10.12	Lease by and between Alder BioPharmaceuticals, Inc. and RREEF American REIT II Corp. KK, dated August 5, 2005.
10.13	First Amendment to Lease by and between Alder BioPharmaceuticals, Inc. and RREEF American Reit II Corp. KK, dated February 1, 2008.
10.14	Second Amendment to Lease by and between Alder BioPharmaceuticals, Inc. and KBS North Creek, LLC, as successor-in-interest to RREEF American REIT II Corp. KK, dated September 23, 2010.
10.15	Third Amendment to Lease by and between Alder BioPharmaceuticals, Inc. and KBS North Creek, LLC, as successor-in-interest to RREEF American REIT II Corp. KK, dated August 21, 2013.
10.16+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Randall C. Schatzman, Ph.D. dated as of July 19, 2005.
10.17+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Randall C. Schatzman, Ph.D. dated as of April 13, 2012.

Exhibit No.	Description
10.18+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and John A. Latham, Ph.D., dated as of July 19, 2005.
10.19+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and John A. Latham, Ph.D., dated as of April 13, 2012.
10.20+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Mark J. Litton, Ph.D., MBA, dated as of July 19, 2005.
10.21+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Mark J. Litton, Ph.D., MBA, dated as of April 13, 2012.
10.22+	Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Jeffrey T.L. Smith, M.D., FRCP, dated as of July 19, 2005.
10.23+	Amendment to Amended and Restated Offer Letter by and between Alder BioPharmaceuticals, Inc. and Jeffrey T.L. Smith, M.D., FRCP, dated as of April 13, 2012.
10.24†*	Master Product Development and Clinical Supply Agreement by and between Alder BioPharmaceuticals, Inc. and Althea Technologies, Inc., dated March 21, 2011.
10.25†*	First Amendment to Master Product Development and Clinical Supply Agreement between Alder BioPharmaceuticals, Inc. and Althea Technologies, dated March 15, 2013.
21.1	Subsidiaries of Alder BioPharmaceuticals, Inc.
23.1	Consent of Independent Registered Public Accounting Firm.
23.2*	Consent of Cooley LLP (included in Exhibit 5.1).
24.1	Power of Attorney (see signature page hereto).

* To be filed by amendment.

† Confidential treatment will be requested with respect to certain portions of this exhibit. Omitted portions will be submitted separately to the U.S. Securities and Exchange Commission.

+ Indicates management contract or compensatory plan.

EX-3.1

EXHIBIT 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

ALDER BIOPHARMACEUTICALS, INC.

(Pursuant to Sections 242 and 245 of the

General Corporation Law of the State of Delaware)

Alder BioPharmaceuticals, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

DOES HEREBY CERTIFY:

FIRST: That the name of this corporation is Alder Biopharmaceuticals, Inc. and that this corporation was originally incorporated pursuant to the General Corporation Law on May 20, 2002 under the name Alder BioPharmaceuticals, Inc.

SECOND: That the Board of Directors duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:

RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety as follows:

ARTICLE I

“The name of this corporation is Alder BioPharmaceuticals, Inc.

ARTICLE II

The address of the registered office of this corporation in the State of Delaware is 2711 Centerville Rd., Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

ARTICLE III

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

ARTICLE IV

A. Authorization of Stock. This corporation is authorized to issue two classes of stock to be designated, respectively, common stock and preferred stock. The total number of shares that this corporation is authorized to issue is Two Hundred Fifty-Six Million Twenty Thousand Two Hundred Seventy (256,020,270). The total number of shares of common stock authorized to be issued is One Hundred Forty Million (140,000,000), par value $0.0001 per share (the “Common Stock”). The total number of shares of preferred stock authorized to be issued is One Hundred Sixteen Million Twenty Thousand Two Hundred Seventy (116,020,270), par value $0.0001 per share (the “Preferred Stock”), Twenty Million Seven Hundred Thirty-Six Thousand Five Hundred Nine (20,736,509) of which are designated as “Series A Preferred Stock,” Twenty-Five Million Sixty-One Thousand Five Hundred Thirty-Eight (25,061,538) of which are designated as “Series B Preferred Stock,” Thirty-Seven Million Two Hundred Twenty-Two Thousand Two Hundred Twenty-Three (37,222,223) of which are designated as “Series C Preferred Stock,” and Thirty-Three Million (33,000,000) of which are designated as “Series D Preferred Stock.”

B. Rights, Preferences and Restrictions of Preferred Stock. The rights, preferences, privileges and restrictions granted to and imposed on the Preferred Stock are as set forth below in this Article IV(B).

1. Dividend Provisions.

(a) The holders of shares of Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of this corporation) on the Common Stock of this corporation, at the applicable Dividend Rate (as defined below), payable when, as and if declared by the Board of Directors. Such dividends shall not be cumulative. Declared but unpaid dividends with respect to a share of Preferred Stock shall, upon conversion of such share to Common Stock, be paid to the extent assets are legally available therefor either in cash or in Common Stock (valued at the fair market value on the date of payment as determined by the Board of Directors of this corporation). The holders of the outstanding Preferred Stock can waive any dividend preference that such holders shall be entitled to receive under this Section 1 upon the affirmative vote or written consent of the holders of at least sixty-six and two thirds percent (66  ²⁄₃%) of the shares of Preferred Stock then outstanding (voting together as a single class and not as separate series, and on an as-converted basis). For purposes of this subsection 1(a), “Dividend Rate” shall mean: (i) $0.0345 per annum for each share of Series A Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to the Series A Preferred Stock); (ii) $0.039 per annum for each share of Series B Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to the Series B Preferred Stock); (iii) $0.0648 per annum for each share of Series C Preferred Stock (as adjusted for any stock splits, stock dividends, combinations,

2

subdivisions, recapitalizations or the like with respect to the Series C Preferred Stock) and (iv) $0.0823 per annum for each share of Series D Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to the Series D Preferred Stock).

(b) After payment of such dividends, any additional dividends shall be distributed among the holders of Preferred Stock and Common Stock pro rata based on the number of shares of Common Stock then held by each holder (assuming conversion of all such Preferred Stock into Common Stock).

2. Liquidation Preference.

(a) In the event of any Liquidation Event (as defined below), either voluntary or involuntary, the holders of each series of Preferred Stock shall be entitled to receive, prior and in preference to any distribution of the proceeds of such Liquidation Event (the “Proceeds”) to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of the applicable Original Issue Price (as defined below) for such series of Preferred Stock, together with all declared but unpaid dividends on such share. If, upon the occurrence of such event, the Proceeds thus distributed among the holders of the Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire Proceeds legally available for distribution shall be distributed ratably among the holders of the Preferred Stock in proportion to the full preferential amount that each such holder is otherwise entitled to receive under this subsection (a). For purposes of this Restated Certificate of Incorporation, “Original Issue Price” shall mean: (i) $0.575 per share for each share of the Series A Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such series of Preferred Stock); (ii) $0.65 per share for each share of the Series B Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such series of Preferred Stock); (iii) $1.08 per share for each share of the Series C Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such series of Preferred Stock); and (iv) $1.3716 per share for each share of the Series D Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such series of Preferred Stock).

(b) Upon completion of the distribution required by subsection (a) of this Section 2 then all of the remaining Proceeds shall be distributed among the holders of Common Stock pro rata based on the number of shares of Common Stock held by each.

(c) (i) For purposes of this Section 2, a “Liquidation Event” shall include (A) the closing of the sale, transfer or other disposition of all or substantially all of this corporation’s assets, (B) the consummation of the merger or consolidation of this corporation with or into another entity (except a merger or consolidation in which the holders of capital stock of this corporation immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of this corporation or the surviving or acquiring

3

entity), (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of this corporation’s securities), of this corporation’s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of this corporation or (D) a liquidation, dissolution or winding up of this corporation; provided, however, that a transaction shall not constitute a Liquidation Event if its sole purpose is to change the state of this corporation’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held this corporation’s securities immediately prior to such transaction. Notwithstanding the prior sentence, the sale of shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock in a financing shall not be deemed a “Liquidation Event.” The treatment of any particular transaction or series of related transactions as a Liquidation Event may be waived by the vote or written consent of the holders of at least sixty-six and two thirds percent (66  ²⁄₃%) of the outstanding Preferred Stock (voting together as a single class and not as separate series, and on an as-converted basis).

(i) In any Liquidation Event, if Proceeds received by this corporation or its stockholders is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

(A) Securities not subject to investment letter or other similar restrictions on free marketability covered by (B) below:

(1) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the twenty (20) trading-day period ending three (3) trading days prior to the closing of the Liquidation Event;

(2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the twenty (20) trading-day period ending three (3) trading days prior to the closing of the Liquidation Event; and

(3) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by this corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock (voting together as a single class and not as separate series, and on an as-converted basis).

(B) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A) (1), (2) or (3) to reflect the approximate fair market value thereof, as mutually determined by this corporation and the holders of at least a majority of the voting power of all then outstanding shares of such Preferred Stock (voting together as a single class and not as separate series, and on an as-converted basis).

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(C) The foregoing methods for valuing non-cash consideration to be distributed in connection with a Liquidation Event may be superseded by any determination of such value set forth in the definitive agreements governing such Liquidation Event.

(ii) In the event the requirements of this Section 2 are not complied with, this corporation shall forthwith either:

(A) cause the closing of such Liquidation Event to be postponed until such time as the requirements of this Section 2 have been complied with; or

(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in subsection 2(c)(iv) hereof.

(iii) This corporation shall give each holder of record of Preferred Stock written notice of such impending Liquidation Event not later than twenty (20) days prior to the stockholders’ meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and this corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after this corporation has given the first notice provided for herein or sooner than ten (10) days after this corporation has given notice of any material changes provided for herein; provided, however, that such periods may be shortened or waived upon the written consent of the holders of Preferred Stock that (i) are entitled to such notice rights or similar notice rights and (ii) represent at least a majority of the voting power of all then outstanding shares of such Preferred Stock (voting together as a single class and not as separate series, and on an as-converted basis).

3. Redemption. The Preferred Stock shall not be redeemable.

4. Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

(a) Right to Convert. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of this corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the applicable Original Issue Price for such series by the applicable Conversion Price for such series (the conversion rate for a series of Preferred Stock into Common Stock is referred to herein as the “Conversion Rate” for such series), determined as hereafter provided, in effect on the date the certificate is surrendered for conversion. The initial Conversion Price per share for each series of Preferred Stock shall be the Original Issue Price applicable to such series; provided, however, that the Conversion Price for the Preferred Stock shall be subject to adjustment as set forth in subsection 4(d).

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(b) Automatic Conversion. Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the Conversion Rate at the time in effect for such series of Preferred Stock immediately upon the earlier of (i) this corporation’s sale of its Common Stock in a firm commitment underwritten public offering on the New York Stock Exchange or NASDAQ National Market pursuant to a registration statement on Form S-1 or Form SB-2 under the Securities Act of 1933, as amended, that results in aggregate proceeds to the Company, net of underwriting expenses, in excess of $40,000,000 (a “Qualified Public Offering”) or (ii) the date specified by written consent or agreement of the holders of at least sixty-six and two thirds percent (66  ²⁄₃%) of the then outstanding shares of Preferred Stock (voting together as a single class and not as separate series, and on an as-converted basis).

(c) Mechanics of Conversion. Before any holder of Preferred Stock shall be entitled to voluntarily convert the same into shares of Common Stock, he or she shall surrender the certificate or certificates therefor, duly endorsed, at the office of this corporation or of any transfer agent for the Preferred Stock, and shall give written notice to this corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. This corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, as amended, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the persons entitled to receive the Common Stock upon conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities. If the conversion is in connection with Automatic Conversion provisions of subsection 4(b)(ii) above, such conversion shall be deemed to have been made on the conversion date described in the stockholder consent approving such conversion, and the persons entitled to receive shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holders of such shares of Common Stock as of such date.

(d) Conversion Price Adjustments of Preferred Stock for Certain Dilutive Issuances, Splits and Combinations. The Conversion Price of the Preferred Stock shall be subject to adjustment from time to time as follows:

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(i) (A) If this corporation shall issue, on or after the date upon which this Restated Certificate of Incorporation is accepted for filing by the Secretary of State of the State of Delaware (the “Filing Date”), any Additional Stock (as defined below) without consideration or for a consideration per share less than the Conversion Price applicable to a series of Preferred Stock in effect immediately prior to the issuance of such Additional Stock, the Conversion Price for such series in effect immediately prior to each such issuance shall forthwith (except as otherwise provided in this clause (i)) be adjusted to a price determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock Outstanding (as defined below) immediately prior to such issuance plus the number of shares of Common Stock that the aggregate consideration received by this corporation for such issuance would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock Outstanding (as defined below) immediately prior to such issuance plus the number of shares of such Additional Stock. For purposes of this Section 4(d)(i)(A), the term “Common Stock Outstanding” shall mean and include the following: (1) outstanding Common Stock, (2) Common Stock issuable upon conversion of outstanding Preferred Stock, (3) Common Stock issuable upon exercise of outstanding stock options and (4) Common Stock issuable upon exercise (and, in the case of warrants to purchase Preferred Stock, conversion) of outstanding warrants. Shares described in (1) through (4) above shall be included whether vested or unvested, whether contingent or non-contingent, and whether exercisable or not yet exercisable.

(A) No adjustment of the Conversion Price for the Preferred Stock shall be made in an amount less than one cent per share, provided that any adjustments that are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three (3) years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of three (3) years from the date of the event giving rise to the adjustment being carried forward. Except to the limited extent provided for in subsections (E)(3) and (E)(4), no adjustment of such Conversion Price pursuant to this subsection 4(d)(i) shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment.

(B) In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by this corporation for any underwriting or otherwise in connection with the issuance and sale thereof.

(C) In the case of the issuance of the Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined by the Board of Directors irrespective of any accounting treatment.

(D) In the case of the issuance of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for purposes of determining the number of shares of Additional Stock issued and the consideration paid therefore:

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(1) The aggregate maximum number of shares of Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation, the passage of time, but without taking into account potential antidilution adjustments) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subsections 4(d)(i)(C) and (d)(i)(D)), if any, to be received by this corporation upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights (without taking into account potential antidilution adjustments) for the Common Stock covered thereby.

(2) The aggregate maximum number of shares of Common Stock deliverable upon conversion of, or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability, including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) for, any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or rights were issued and for a consideration equal to the consideration, if any, received by this corporation for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by this corporation (without taking into account potential antidilution adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subsections 4(d)(i)(C) and (d)(i)(D)).

(3) In the event of any change in the number of shares of Common Stock deliverable or in the consideration payable to this corporation upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities, the Conversion Price of the Preferred Stock, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities.

(4) Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price of the Preferred Stock, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities, shall be recomputed to reflect the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities that remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities.

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(5) The number of shares of Additional Stock deemed issued and the consideration deemed paid therefor pursuant to subsections 4(d)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either subsection 4(d)(i)(E)(3) or (4).

(ii) “Additional Stock” shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to subsection 4(d)(i)(E)) by this corporation on or after the Filing Date other than:

(A) Common Stock issued pursuant to a transaction described in subsection 4(d)(iii) hereof;

(B) Common Stock issued to employees, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to plans or agreements approved by this corporation’s Board of Directors;

(C) Common Stock issued pursuant to a Qualified Public Offering;

(D) Common Stock issued pursuant to the conversion or exercise of convertible or exercisable securities outstanding on the Filing Date;

(E) Common Stock issued upon conversion of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock;

(F) Common Stock issued in connection with a bona fide business acquisition of or by this corporation, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, which transaction is approved by this corporation’s Board of Directors;

(G) Common Stock issued or deemed issued pursuant to subsection 4(d)(i)(E) as a result of a decrease in the Conversion Price of any series of Preferred Stock resulting from the operation of Section 4(d)(i);

(H) Common Stock issued pursuant to corporate partnering agreements, provided such issuances are for primarily non-equity financing purposes and provided that such arrangements are approved by this corporation’s Board of Directors;

(I) Common Stock issued or issuable pursuant to any equipment lease financing or bank credit arrangement, provided such transaction is entered into for primarily non-equity financing purposes and is approved by this corporation’s Board of Directors; or

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(J) Common Stock issued or issuable pursuant to any dividends or distributions paid upon the Preferred Stock.

(iii) In the event this corporation should at any time or from time to time after the Filing Date fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of the Preferred Stock shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase of the aggregate of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents with the number of shares issuable with respect to Common Stock Equivalents determined from time to time in the manner provided for deemed issuances in subsection 4(d)(i)(E).

(iv) If the number of shares of Common Stock outstanding at any time after the Filing Date is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for the Preferred Stock shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in outstanding shares.

(e) Other Distributions. In the event this corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by this corporation or other persons, assets (excluding cash dividends) or options or rights not referred to in subsection 4(d)(iii), then, in each such case for the purpose of this subsection 4(e), the holders of the Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common Stock of this corporation into which their shares of Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Stock of this corporation entitled to receive such distribution.

(f) Recapitalizations. If at any time or from time to time there shall be a recapitalization of the Common Stock (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 4 or in Section 2) provision shall be made so that the holders of the Preferred Stock shall thereafter be entitled to receive upon

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conversion of the Preferred Stock the number of shares of stock or other securities or property of this corporation or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of the Preferred Stock after the recapitalization to the end that the provisions of this Section 4 (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the Preferred Stock) shall be applicable after that event as nearly equivalently as may be practicable.

(g) No Fractional Shares and Certificate as to Adjustments.

(i) No fractional shares shall be issued upon the conversion of any share or shares of the Preferred Stock and the aggregate number of shares of stock to be issued to particular stockholders, shall be rounded down to the nearest whole share and the corporation shall pay in cash the fair market value of any fractional shares as of the time when entitlement to receive such fractions is determined. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such conversion.

(ii) Upon the occurrence of each adjustment or readjustment of the Conversion Price of Preferred Stock pursuant to this Section 4, this corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. This corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price for such series of Preferred Stock at the time in effect, and (C) the number of shares of Common Stock and the amount, if any, of other property that at the time would be received upon the conversion of a share of Preferred Stock.

(h) Notices of Record Date. In the event of any taking by this corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, this corporation shall mail to each holder of Preferred Stock, at least ten (10) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution, and the amount and character of such dividend or distribution.

(i) Reservation of Stock Issuable Upon Conversion. This corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Preferred Stock; and if at any time the number of

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authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, in addition to such other remedies as shall be available to the holder of such Preferred Stock, this corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate of Incorporation.

(j) Notices. Any notice required by the provisions of this Section 4 to be given to the holders of shares of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his address appearing on the books of this corporation.

(k) Waiver of Adjustment to Conversion Price. Notwithstanding anything herein to the contrary, any downward adjustment of the Conversion Price of any series of Preferred Stock may be waived, either prospectively or retroactively and either generally or in a particular instance, by the consent or vote of the holders of a majority of the outstanding shares of such series of Preferred Stock, voting together as a single class; provided, however, the consent or vote of the holders of at least sixty-six and two thirds percent (66  ²⁄₃%) of the outstanding shares of Series C Preferred Stock, voting together as a separate series, shall be required for any waiver with respect to any downward adjustment to the Conversion Price of the Series C Preferred Stock and provided further, however, the consent or vote of the holders of at least sixty percent (60%) of the outstanding shares of Series D Preferred Stock, voting together as a separate series, shall be required for any waiver with respect to any downward adjustment to the Conversion Price of the Series D Preferred Stock. Any such waiver shall bind all future holders of shares of such series of Preferred Stock.

5. Voting Rights.

(a) General Voting Rights. The holder of each share of Preferred Stock shall have the right to one vote for each share of Common Stock into which such Preferred Stock could then be converted, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the Bylaws of this corporation, and except as provided in subsection 5(b) below with respect to the election of directors by the separate class vote of the holders of Common Stock, shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

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(b) Voting for the Election of Directors. As long as at least 4,000,000 shares of Series A Preferred Stock remain outstanding (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like), the holders of such shares of Series A Preferred Stock shall be entitled to elect two (2) directors of this corporation at any election of directors. As long as at least 4,000,000 shares of Series B Preferred Stock remain outstanding (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like), the holders of such shares of Series B Preferred Stock shall be entitled to elect one (1) director of this corporation at any election of directors. As long as at least 4,000,000 shares of Series C Preferred Stock remain outstanding (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like), the holders of such shares of Series C Preferred Stock shall be entitled to elect two (2) directors of this corporation at any election of directors. As long as at least 4,000,000 shares of Series D Preferred Stock remain outstanding (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like), the holders of such shares of Series D Preferred Stock shall be entitled to elect one (1) director of this corporation at any election of directors. The holders of outstanding Common Stock shall be entitled to two (2) directors of this corporation at any election of directors. The holders of Preferred Stock and Common Stock (voting together as a single class and not as separate series, and on an as-converted basis) shall be entitled to elect any remaining directors of this corporation.

Notwithstanding the provisions of Section 223(a)(1) and 223(a)(2) of the General Corporation Law, any vacancy, including newly created directorships resulting from any increase in the authorized number of directors or amendment of this Restated Certificate of Incorporation, and vacancies created by removal or resignation of a director, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced; provided, however, that where such vacancy occurs among the directors elected by the holders of a class or series of stock, the holders of shares of such class or series may override the Board’s action to fill such vacancy by (i) voting for their own designee to fill such vacancy at a meeting of the Company’s stockholders or (ii) written consent, if the consenting stockholders hold a sufficient number of shares to elect their designee at a meeting of the stockholders. Any director elected as provided in the immediately preceding sentence hereof may be removed during the aforesaid term of office, either with or without cause, by, and only by, the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent.

6. Protective Provisions.

(a) So long as 11,500,000 shares of Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like) remain outstanding, this corporation shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Preferred Stock (voting together as a single class and not as a separate series, and on an as converted basis):

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(i) alter or change the rights, preferences or privileges of the shares of any series of Preferred Stock so as to affect adversely the shares;

(ii) increase or decrease (other than by conversion) the total number of authorized shares of Preferred Stock or designated shares of any series of Preferred Stock; or

(iii) authorize or issue, or obligate itself to issue, any equity security (including any other security convertible into or exercisable for any such equity security) having a preference over, or being on a parity with, any series of Preferred Stock.

(b) So long as 11,500,000 shares of Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like) remain outstanding, this corporation shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least sixty-six and two thirds percent (66  ²⁄₃%) of the then outstanding shares of Preferred Stock (voting together as a single class and not as a separate series, and on an as converted basis):

(i) consummate a Liquidation Event;

(ii) redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any share or shares of Preferred Stock or Common Stock; provided, however, that this restriction shall not apply to the repurchase of shares at cost of Common Stock from employees, officers, directors, consultants or other persons performing services for this corporation or any subsidiary pursuant to agreements under which this corporation has the option to repurchase such shares upon the occurrence of certain events, such as the termination of employment or service, or pursuant to a right of first refusal;

(iii) amend this corporation’s Certificate of Incorporation or Bylaws;

(iv) change the authorized number of directors of this corporation;

(v) declare or pay any dividends on Common Stock;

(vi) increase the number of shares of Common Stock reserved for issuance under the corporation’s 2005 Stock Option Plan in excess of 14,640,000 (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like); or

(vii) sell, exclusively license or otherwise dispose of a material portion of the corporation’s assets, property, intellectual property or business, including any strategic partnering or similar transaction involving the corporation.

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(c) In addition, so long as 11,500,000 shares of Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like) remain outstanding, unless approved by the Board of Directors of this corporation, including all of the directors elected by the holders of Preferred Stock, this corporation shall not (by amendment, merger, consolidation or otherwise) take any of the following actions without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least sixty-six and two thirds percent (66  ²⁄₃%) of the then outstanding shares of Preferred Stock (voting together as a single class and not as separate series, and on an as-converted basis):

(i) make any loans or advances to its employees or any members of their immediate families, other than loans or advances in the ordinary course of business as part of travel advances or salary or loans to employees made pursuant to promissory notes issued for the purchase of shares under a stock option plan or restricted stock plan approved by the Board of Directors of this corporation;

(ii) guarantee any indebtedness or obligation of any other party other than in the ordinary course of business;

(iii) create or suffer to be imposed any lien, mortgage, security interest or other charge on or against all or substantially all of the properties or assets of this corporation or any subsidiary; or

(iv) acquire, or permit any subsidiary to acquire, any stock or other securities of any corporation, partnership or entity unless immediately following such acquisition such corporation, partnership or entity would be wholly owned by this corporation or a subsidiary of this corporation.

(d) So long as 3,200,000 shares of Series C Preferred Stock or Series D Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like) remain outstanding, this corporation shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least sixty percent (60%) of the then outstanding shares of Series C Preferred Stock and Series D Preferred Stock (voting together as a separate class, and on an as converted basis):

(i) consummate a Liquidation Event;

(ii) change the authorized number of directors of this corporation;

(iii) authorize or issue, or obligate itself to issue, any equity security (including any other security convertible into or exercisable for any such equity security) having a preference over, or being on a parity with, the Series D Preferred Stock;

(iv) conduct a firm commitment underwritten public offering pursuant to a registration statement on Form S-1 or Form SB-2 under the Securities Act of 1933;

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(v) sell, exclusively license or otherwise dispose of a material portion of the corporation’s assets, property, intellectual property or business, including any strategic partnering or similar transaction involving the corporation; or

(vi) amend this Section 6(d).

(e) So long as 3,200,000 shares of Series D Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like) remain outstanding, this corporation shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least sixty percent (60%) of the then outstanding shares of Series D Preferred Stock (voting as a separate series, and on an as converted basis):

(i) increase the number of authorized shares of Series D Preferred Stock; or

(ii) amend this Section 6(e).

7. Status of Converted Stock. In the event any shares of Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so converted shall be cancelled and shall not be issuable by this corporation. The Restated Certificate of Incorporation of this corporation shall be appropriately amended to effect the corresponding reduction in this corporation’s authorized capital stock.

C. Common Stock. The rights, preferences, privileges and restrictions granted to and imposed on the Common Stock are as set forth below in this Article IV(C).

1. Dividend Rights. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of this corporation legally available therefor, any dividends as may be declared from time to time by the Board of Directors.

2. Liquidation Rights. Upon the liquidation, dissolution or winding up of this corporation, the assets of this corporation shall be distributed as provided in Section 2 of Article IV(B) hereof.

3. Redemption. The Common Stock is not redeemable at the option of the holder.

4. Voting Rights. The holder of each share of Common Stock shall have the right to one vote for each such share, and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of this corporation, and shall be entitled to vote upon such matters and in such manner as may be provided by law. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of this corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law.

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ARTICLE V

Except as otherwise provided in this Restated Certificate of Incorporation, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of this corporation.

ARTICLE VI

The number of directors of this corporation shall be determined in the manner set forth in the Bylaws of this corporation.

ARTICLE VII

Elections of directors need not be by written ballot unless the Bylaws of this corporation shall so provide.

ARTICLE VIII

Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of this corporation may provide. The books of this corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of this corporation.

ARTICLE IX

A director of this corporation shall not be personally liable to this corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to this corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the General Corporation Law is amended after approval by the stockholders of this Article IX to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of this corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended.

Any repeal or modification of the foregoing provisions of this Article IX by the stockholders of this corporation shall not adversely affect any right or protection of a director of this corporation existing at the time of, or increase the liability of any director of this corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

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ARTICLE X

This corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

ARTICLE XI

To the fullest extent permitted by applicable law, this corporation is authorized to provide indemnification of (and advancement of expenses to) agents of this corporation (and any other persons to which General Corporation Law permits this corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law, subject only to limits created by applicable General Corporation Law (statutory or non-statutory), with respect to actions for breach of duty to this corporation, its stockholders, and others.

Any amendment, repeal or modification of the foregoing provisions of this Article XI shall not adversely affect any right or protection of a director, officer, agent, or other person existing at the time of, or increase the liability of any director of this corporation with respect to any acts or omissions of such director, officer or agent occurring prior to, such amendment, repeal or modification.

* * *

THIRD: The foregoing amendment and restatement was approved by the holders of the requisite number of shares of said corporation in accordance with Section 228 of the General Corporation Law.

FOURTH: That said Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Restated Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.”

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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 16^th day of April, 2012.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

President

EX-3.3

EXHIBIT 3.3

BYLAWS

OF

ALDER BIOPHARMACEUTICALS, INC.

BYLAWS

OF

ALDER BIOPHARMACEUTICALS, INC.

ARTICLE I

CORPORATE OFFICES

1.1 Registered Office.

The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is Corporation Service Company.

1.2 Other Offices.

The Board of Directors may at any time establish other offices at any place or places where the corporation is qualified to do business.

ARTICLE II

MEETINGS OF STOCKHOLDERS

2.1 Place Of Meetings.

Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board of Directors. In the absence of any such designation, stockholders’ meetings shall be held at the registered office of the corporation.

2.2 Annual Meeting.

The annual meeting of stockholders shall be held on such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors each year. At the meeting, directors shall be elected and any other proper business may be transacted.

2.3 Special Meeting.

A special meeting of the stockholders may be called at any time by the Board of Directors, the chairman of the board, the president or by one or more stockholders holding shares in the aggregate entitled to cast not less than ten percent of the votes at that meeting.

If a special meeting is called by any person or persons other than the Board of Directors, the president or the chairman of the board, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile

transmission to the chairman of the board, the president, any vice president, or the secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The officer receiving the request shall cause notice to be promptly given to the stockholders entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after the receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.

2.4 Notice Of Stockholders’ Meetings.

All notices of meetings with stockholders shall be in writing and shall be sent or otherwise given in accordance with Section 2.5 of these Bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place (if any), date and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called.

2.5 Manner Of Giving Notice; Affidavit Of Notice.

Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic mail or other electronic transmission, in the manner provided in Section 232 of the Delaware General Corporation Law. An affidavit of the secretary or an assistant secretary or of the transfer agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

2.6 Quorum.

The holders of a majority of the shares of stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (a) the chairman of the meeting or (b) holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, shall have power to adjourn the meeting to another place (if any), date or time.

2.7 Adjourned Meeting; Notice.

When a meeting is adjourned to another place (if any), date or time, unless these Bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place (if any), thereof and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting the

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corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the place (if any), date and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

2.8 Organization; Conduct of Business.

(a) Such person as the Board of Directors may have designated or, in the absence of such a person, the President of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as Chairman of the meeting. In the absence of the Secretary of the Corporation, the Secretary of the meeting shall be such person as the Chairman of the meeting appoints.

(b) The Chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including the manner of voting and the conduct of business. The date and time of opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.

2.9 Voting.

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.12 of these Bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements).

Except as may be otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.

2.10 Waiver Of Notice.

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, or waiver by electronic mail or other electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice, or any waiver of notice by electronic transmission, unless so required by the certificate of incorporation or these Bylaws.

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2.11 Stockholder Action By Written Consent Without A Meeting.

Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is (i) signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and (ii) delivered to the Corporation in accordance with Section 228(a) of the Delaware General Corporation Law.

Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date the earliest dated consent is delivered to the Corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in this Section. A telegram, cablegram, electronic mail or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for purposes of this Section to the extent permitted by law. Any such consent shall be delivered in accordance with Section 228(d)(1) of the Delaware General Corporation Law.

Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing (including by electronic mail or other electronic transmission as permitted by law). If the action which is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware.

2.12 Record Date For Stockholder Notice; Voting; Giving Consents.

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in

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respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.

If the Board of Directors does not so fix a record date:

(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

(b) The record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent (including consent by electronic mail or other electronic transmission as permitted by law) is delivered to the corporation.

(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, if such adjournment is for thirty (30) days or less; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

2.13 Proxies.

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by an instrument in writing or by an electronic transmission permitted by law filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder’s name is placed on the proxy (whether by manual signature, typewriting, facsimile, electronic or telegraphic transmission or otherwise) by the stockholder or the stockholder’s attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware.

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ARTICLE III

DIRECTORS

3.1 Powers.

Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these Bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors.

3.2 Number Of Directors.

Upon the adoption of these bylaws, the number of directors constituting the entire Board of Directors shall be three (3). Thereafter, this number may be changed by a resolution of the Board of Directors or of the stockholders, subject to Section 3.4 of these Bylaws. No reduction of the authorized number of directors shall have the effect of removing any director before such director’s term of office expires.

3.3 Election, Qualification And Term Of Office Of Directors.

Except as provided in Section 3.4 of these Bylaws, and unless otherwise provided in the certificate of incorporation, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these Bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.

Unless otherwise specified in the certificate of incorporation, elections of directors need not be by written ballot.

3.4 Resignation And Vacancies.

Any director may resign at any time upon written notice to the attention of the Secretary of the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation or these Bylaws:

(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

(b) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

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If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these Bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware.

If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable.

3.5 Place Of Meetings; Meetings By Telephone.

The Board of Directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

3.6 Regular Meetings.

Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

3.7 Special Meetings; Notice.

Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the chairman of the board, the president, any vice president, the secretary or any two directors.

Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail, facsimile, electronic transmission, or telegram, charges prepaid, addressed to each director at that director’s address as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. If the notice is delivered personally or by facsimile, electronic transmission, telephone or telegram, it shall be delivered at least 48 hours before the time of the holding of the meeting. Any oral notice given personally or

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by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting. The notice need not specify the place of the meeting, if the meeting is to be held at the principal executive office of the corporation. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

3.8 Quorum.

At all meetings of the Board of Directors, a majority of the total number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

3.9 Waiver Of Notice.

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, or waiver by electronic mail or other electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these Bylaws.

3.10 Board Action By Written Consent Without A Meeting.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

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3.11 Fees And Compensation Of Directors.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. No such compensation shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

3.12 Approval Of Loans To Officers.

The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

3.13 Removal Of Directors.

Unless otherwise restricted by statute, by the certificate of incorporation or by these Bylaws, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors; provided, however, that if the stockholders of the corporation are entitled to cumulative voting, if less than the entire Board of Directors is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire Board of Directors.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

3.14 Chairman Of The Board Of Directors.

The corporation may also have, at the discretion of the Board of Directors, a chairman of the Board of Directors who shall not be considered an officer of the corporation.

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ARTICLE IV

COMMITTEES

4.1 Committees Of Directors.

The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate 1 or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, or in these Bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporate Law of Delaware to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaw of the corporation.

4.2 Committee Minutes.

Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

4.3 Meetings And Action Of Committees.

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Section 3.5 (place of meetings and meetings by telephone), Section 3.6 (regular meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum), Section 3.9 (waiver of notice), and Section 3.10 (action without a meeting) of these Bylaws, with such changes in the context of such provisions as are necessary to substitute the committee and its members for the Board of Directors and its members; provided, however, that the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee, that special meetings of committees may also be called by resolution of the Board of Directors and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these Bylaws.

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ARTICLE V

OFFICERS

5.1 Officers.

The officers of the corporation shall be a chief executive officer, a president, a secretary, and a chief financial officer. The corporation may also have, at the discretion of the Board of Directors, a chief executive officer, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these Bylaws. Any number of offices may be held by the same person.

5.2 Appointment Of Officers.

The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these Bylaws, shall be appointed by the Board of Directors, subject to the rights, if any, of an officer under any contract of employment.

5.3 Subordinate Officers.

The Board of Directors may appoint, or empower the chief executive officer or the president to appoint, such other officers and agents as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.

5.4 Removal And Resignation Of Officers.

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board of Directors at any regular or special meeting of the board or, except in the case of an officer chosen by the Board of Directors, by any officer upon whom the power of removal is conferred by the Board of Directors.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

5.5 Vacancies In Offices.

Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

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5.6 Chief Executive Officer.

Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board, if any, the chief executive officer of the corporation (if such an officer is appointed) shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business and the officers of the corporation. He or she shall preside at all meetings of the stockholders and, in the absence or nonexistence of a chairman of the board, at all meetings of the Board of Directors and shall have the general powers and duties of management usually vested in the office of chief executive officer of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

5.7 President.

Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board (if any) or the chief executive officer, the president shall have general supervision, direction, and control of the business and other officers of the corporation. He or she shall have the general powers and duties of management usually vested in the office of president of a corporation and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

5.8 Vice Presidents.

In the absence or disability of the chief executive officer and president, the vice presidents, if any, in order of their rank as fixed by the Board of Directors or, if not ranked, a vice president designated by the Board of Directors, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors, these Bylaws, the president or the chairman of the board.

5.9 Secretary.

The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the Board of Directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show the time and place of each meeting, the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at stockholders’ meetings, and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the Board of Directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation.

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The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors required to be given by law or by these Bylaws. He or she shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by these Bylaws.

5.10 Chief Financial Officer.

The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director.

The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. He or she shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the president, the chief executive officer, or the directors, upon request, an account of all his or her transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws.

5.11 Representation Of Shares Of Other Corporations.

The chairman of the board, the chief executive officer, the president, any vice president, the chief financial officer, the secretary or assistant secretary of this corporation, or any other person authorized by the Board of Directors or the chief executive officer or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by the person having such authority.

5.12 Authority And Duties Of Officers.

In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board of Directors or the stockholders.

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ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS

6.1 Indemnification Of Directors And Officers.

The corporation shall, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, indemnify each of its directors and officers against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.1, a “director” or “officer” of the corporation includes any person (a) who is or was a director or officer of the corporation, (b) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

6.2 Indemnification Of Others.

The corporation shall have the power, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, to indemnify each of its employees and agents (other than directors and officers) against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.2, an “employee” or “agent” of the corporation (other than a director or officer) includes any person (a) who is or was an employee or agent of the corporation, (b) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

6.3 Payment Of Expenses In Advance.

Expenses incurred in defending any action or proceeding for which indemnification is required pursuant to Section 6.1 or for which indemnification is permitted pursuant to Section 6.2 following authorization thereof by the Board of Directors shall be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the indemnified party to repay such amount if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the indemnified party is not entitled to be indemnified as authorized in this Article VI.

6.4 Indemnity Not Exclusive.

The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, to the extent that such additional rights to indemnification are authorized in the certificate of incorporation

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6.5 Insurance.

The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of the General Corporation Law of Delaware.

6.6 Conflicts.

No indemnification or advance shall be made under this Article VI, except where such indemnification or advance is mandated by law or the order, judgment or decree of any court of competent jurisdiction, in any circumstance where it appears:

(a) That it would be inconsistent with a provision of the certificate of incorporation, these Bylaws, a resolution of the stockholders or an agreement in effect at the time of the accrual of the alleged cause of the action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

ARTICLE VII

RECORDS AND REPORTS

7.1 Maintenance And Inspection Of Records.

The corporation shall, either at its principal executive offices or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these Bylaws as amended to date, accounting books, and other records.

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business.

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A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in each such stockholder’s name, shall be open to the examination of any such stockholder for a period of at least ten (10) days prior to the meeting in the manner provided by law. The stock list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

7.2 Inspection By Directors.

Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

ARTICLE VIII

GENERAL MATTERS

8.1 Checks.

From time to time, the Board of Directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

8.2 Execution Of Corporate Contracts And Instruments.

The Board of Directors, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

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8.3 Stock Certificates; Partly Paid Shares.

The shares of a corporation shall be represented by certificates, provided that the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the Board of Directors, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

8.4 Special Designation On Certificates.

If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

8.5 Lost Certificates.

Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or

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uncertificated shares in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or the owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

8.6 Construction; Definitions.

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

8.7 Dividends.

The directors of the corporation, subject to any restrictions contained in (a) the General Corporation Law of Delaware or (b) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock.

The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies.

8.8 Fiscal Year.

The fiscal year of the corporation shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.

8.9 Seal.

The corporation may adopt a corporate seal, which may be altered at pleasure, and may use the same by causing it or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.

8.10 Transfer Of Stock.

Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

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8.11 Stock Transfer Agreements.

The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware.

8.12 Registered Stockholders.

The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

8.13 Facsimile Signature

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

ARTICLE IX

AMENDMENTS

The Bylaws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal Bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal Bylaws.

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EX-4.1

EXHIBIT 4.1

ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

April 16, 2012

TABLE OF CONTENTS

	Page
A. Amendments of Prior Rights Agreement; Waiver of Right of First Offer		2
1. Registration Rights		3
1.1 Definitions		3
1.2 Request for Registration		4
1.3 Company Registration		6
1.4 Form S-3 Registration		7
1.5 Obligations of the Company		8
1.6 Information from Holder		10
1.7 Expenses of Registration		10
1.8 Delay of Registration		11
1.9 Indemnification		11
1.10 Reports Under the 1934 Act		13
1.11 Assignment of Registration Rights		14
1.12 Limitations on Subsequent Registration Rights		14
1.13 ‘Market Stand-Off’ Agreement		14
1.14 Termination of Registration Rights		16
2. Covenants of the Company		16
2.1 Delivery of Financial Statements		16
2.2 Inspection		17
2.3 Assignment/Termination of Information and Inspection Covenants		17
2.4 Right of First Offer		17
2.5 Proprietary Information and Inventions Agreements		20
2.6 Employee Agreements		20
2.7 Drag Along Agreements		20
2.8 Director’s Liability and Indemnification		20
2.9 Reimbursement of Certain Expenses		20
2.10 Termination		20
3. Miscellaneous		23
3.1 Successors and Assigns		23
3.2 Governing Law		23
3.3 Counterparts		23
3.4 Titles and Subtitles		23
3.5 Notices		23
3.6 Expenses		24
3.7 Entire Agreement; Amendments and Waivers		24
3.8 Severability		24
3.9 Aggregation of Stock		24
3.10 Additional Investors		24
3.11 Severability		24

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

This AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made as of the 16th day of April, 2012, by and among Alder BioPharmaceuticals, Inc., a Delaware corporation (the “Company”), the holders of the Company’s Series A Preferred Stock listed on Schedule A attached hereto (the “Series A Holders”), the holders of the Company’s Series B Preferred Stock listed on Schedule A attached hereto (the “Series B Holders”), the holders of the Company’s Series C Preferred Stock listed on Schedule A attached hereto (the “Series C Holders”), the holders of Series D Preferred Stock listed on Schedule A attached hereto (the “Series D Holders,” and together with the Series A Holders, the Series B Holders and the Series C Holders, the “Investors” and each individually, an “Investor”), and Randall Schatzman, Mark Litton and John Latham, each of whom is herein referred to as a “Founder.”

RECITALS

WHEREAS, the Company, the Founders, the Series A Holders, the Series B Holders and the Series C Holders have previously entered into an Amended and Restated Investors’ Rights Agreement dated as of December 28, 2007 (the “Prior Rights Agreement”), pursuant to which the Company granted the Founders, the Series A Holders, the Series B Holders and the Series C Holders certain rights;

WHEREAS, the Company and certain of the Investors are parties to the Series D Preferred Stock Purchase Agreement of even date herewith (the “Series D Agreement”);

WHEREAS, in order to induce such Investors to purchase Series D Preferred Stock (the “Series D Preferred Stock” or together, with the Company’s Series A Preferred Stock, Company’s Series B Preferred Stock and the Company’s Series C Preferred Stock, the “Preferred Stock”) and invest funds in the Company pursuant to the Series D Agreement, the Investors and the Company hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock issued or issuable to them and certain other matters as set forth herein; and

WHEREAS, the Company, the Founders, the Series A Holders, the Series B Holders and the Series C Holders each desire to amend and restate the Prior Rights Agreement to add the Series D Holders as parties to this Agreement and make certain other changes.

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

A. Amendments of Prior Rights Agreement; Waiver of Right of First Offer. Effective and contingent upon execution of this Agreement by the Company and the holders of at least sixty percent (60%) of Common Stock issuable or issued upon conversion of the Series A

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Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, taken together as a single class, and upon closing of the transactions contemplated by the Series D Agreement, the Prior Rights Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and the Company, the Founders, and the Investors hereby agree to be bound by the provisions hereof as the sole agreement of the Company, the Founders and the Investors with respect to registration rights of the Company’s securities and certain other rights, as set forth herein. The Series A Holders, the Series B Holders and Series C Holders that are Major Investors (as that term is defined in the Prior Rights Agreement) hereby waive the Right of First Offer, including the notice requirements, set forth in the Prior Rights Agreement with respect to the issuance of Series D Preferred Stock.

1. Registration Rights. The Company covenants and agrees as follows:

1.1 Definitions. For purposes of this Section 1:

(a) The term “Act” means the Securities Act of 1933, as amended.

(b) The term “Form S-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

(c) The term “Founders’ Stock” means the shares of Common Stock issued to the Founders.

(d) The term “Holder” means any Investor or Founder owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.11 hereof.

(e) The term “Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock under the Act.

(f) The term “1934 Act” means the Securities Exchange Act of 1934, as amended.

(g) The term “Qualified Public Offering” means a sale of the Company’s Common Stock in a firm commitment underwritten public offering on the New York Stock Exchange or NASDAQ National Market pursuant to a registration statement on Form S-1 or Form SB-2 under the Securities Act of 1933, as amended, that results in aggregate proceeds to the Company, net of underwriting expenses, in excess of $40,000,000.

(h) The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.

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(i) The term “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock, (ii) the Founders’ Stock, provided, however, that for the purposes of Section 1.2, 1.4 or 1.12 the Founders’ Stock shall not be deemed Registrable Securities and the Founders shall not be deemed Holders, and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in (i) and (ii) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his, her or its rights under this Section 1 are not assigned and any shares of Common Stock (“Special Mandatory Conversion Shares”) issued upon conversion of Preferred Stock pursuant to Section 3 hereof.

(j) The number of shares of “Registrable Securities” outstanding shall be determined by the number of shares of Common Stock outstanding that are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities that are, Registrable Securities.

(k) The term “Rule 144” shall mean Rule 144 under the Act.

(l) The term “SEC” shall mean the Securities and Exchange Commission.

1.2 Request for Registration.

(a) Subject to the conditions of this Section 1.2, if the Company shall receive at any time after the earlier of (i) December 28, 2015 or (ii) twelve (12) months after the effective date of the Initial Offering, a written request from (A) in the case of the first registration to be effected pursuant to this Section 1.2, the Holders of at least fifty-one percent (51%) or more of the Registrable Securities then outstanding, or (B) in the case of any permitted subsequent request following the first registration effected pursuant to this Section 1.2, the holders of at least twenty-five percent (25%) of the Registrable Securities then outstanding (in any such case, for purposes of this Section 1.2, the “Initiating Holders”) that the Company file a registration statement under the Act covering the registration of at least twenty percent (20%) of the Registrable Securities and with an anticipated aggregate offering price of at least $7,500,000, then the Company shall, within twenty (20) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 1.2, use all commercially reasonable efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within twenty (20) days of the mailing of the Company’s notice pursuant to this Section 1.2(a).

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(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in Section 1.2(a). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company). Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Company that marketing factors require a limitation on the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities pro rata based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). In no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

(c) Notwithstanding the foregoing, the Company shall not be required to effect a registration pursuant to this Section 1.2:

(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or

(ii) after the Company has effected two (2) registrations pursuant to this Section 1.2, and such registrations have been declared or ordered effective; or

(iii) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of and ending on a date one hundred twenty (120) days following the effective date of a Company-initiated registration subject to Section 1.3 below, provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective; or

(iv) if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form S-3 pursuant to Section 1.4 hereof; or

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(v) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2 a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once and provided further that the Company shall not register any securities for the account of itself or any other stockholder during such one hundred twenty (120) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered).

1.3 Company Registration.

(a) If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 4.5, the Company shall, subject to the provisions of Section 1.3(c), use all commercially reasonable efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder requests to be registered.

(b) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration, and shall promptly notify any Holder that has elected to include shares in such registration of such termination or withdrawal. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 1.7 hereof.

(c) Underwriting Requirements. In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under this Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with such

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underwriters, and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In no event shall any Registrable Securities be excluded from such offering unless all other stockholders’ securities have been first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders. For purposes of the preceding sentence concerning apportionment, for any selling stockholder that is a Holder of Registrable Securities and that is a venture capital fund, partnership or corporation, the affiliated venture capital funds, partners, retired partners and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals.

1.4 Form S-3 Registration. In case the Company shall receive from any Holders of Registrable Securities (for purposes of this Section 1.4, the “Initiating Holders”) a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b) use all commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 1.4:

(i) if Form S-3 is not available for such offering by the Holders; or

(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriting discounts) of less than $500,000; or

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(iii) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.4 a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once and provided further that the Company shall not register any securities for the account of itself or any other stockholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered); or

(iv) if the Company has, within the six (6) month period preceding the date of such request, already effected one registration on Form S-3 for the Holders pursuant to this Section 1.4 or has already effected an aggregate of six (6) registrations on Form S-3 for the Holders pursuant to this Section 1.4; or

(v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

(c) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.4 and the Company shall include such information in the written notice referred to in Section 1.4(a). The provisions of Section 1.2(b) shall be applicable to such request (with the substitution of Section 1.4 for references to Section 1.2).

(d) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as requests for registration effected pursuant to Sections 1.2.

1.5 Obligations of the Company. Whenever required under this Section 1 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

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(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of at least one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

(b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement;

(c) furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(d) use all commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

(f) notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(g) cause all such Registrable Securities registered pursuant to this Section 1 to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then listed; and

(h) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

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Notwithstanding the provisions of this Section 1, the Company shall be entitled to postpone or suspend, for a period not to exceed sixty (60) days, the filing, effectiveness or use of, or trading under, any registration statement if the Company shall determine that any such filing or the sale of any securities pursuant to such registration statement would in the good faith judgment of the Board of Directors of the Company:

(i) materially impede, delay or interfere with any material pending or proposed financing, acquisition, corporate reorganization or other similar transaction involving the Company for which the Board of Directors of the Company has authorized negotiations;

(ii) materially adversely impair the consummation of any pending or proposed material offering or sale of any class of securities by the Company; or

(iii) require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to the interests of the Company and its stockholders;

provided, however, that during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of the Company’s subsidiaries or affiliates).

The Company may extend the suspension period for an additional consecutive sixty (60) days with the consent of the holders of a majority of the Registrable Securities registered under the applicable registration statement, which consent shall not be unreasonably withheld. No more than two (2) such suspension periods shall occur in any twelve (12) month period. In the event of the suspension of effectiveness of any registration statement pursuant to this Section 1.5, the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days the effectiveness of such registration statement was suspended.

1.6 Information from Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities.

1.7 Expenses of Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications under Sections 1.2, 1.3 and 1.4, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders shall be borne by the Company. All selling expenses incurred in connection with any registrations hereunder shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 or

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Section 1.4 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless, in the case of a registration requested under Section 1.2, the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 1.2 and provided, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain all of their rights pursuant to Section 1.2 and 1.4.

1.8 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.

1.9 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 1:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers, directors and stockholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act, any other federal or state laws or any rule or regulation promulgated under the Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state in such registration statement a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, and the Company will reimburse each such Holder, underwriter, controlling person or other aforementioned person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection l.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in

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conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter, controlling person or other aforementioned person; provided further, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter or other aforementioned person, or any person controlling such Holder or underwriter, from whom the person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the most current prospectus was not sent or given by or on behalf of such Holder or underwriter or other aforementioned person to such person, if required by law to have been so delivered, at or prior to the written confirmation of the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

(b) To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act, any other federal or state laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any person intended to be indemnified pursuant to this subsection l.9(b) for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection l.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any indemnity under this subsection l.9(b) exceed the net proceeds from the offering received by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 1.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate

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counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.9 to the extent of such prejudice, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.9.

(d) If the indemnification provided for in this Section 1.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided, however, that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 1.9(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f) The obligations of the Company and Holders under this Section 1.9 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1 and otherwise.

1.10 Reports Under the 1934 Act . With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date of the Initial Offering;

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(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and

(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to avail any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.

1.11 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities that (i) is a subsidiary, parent, partner, member, limited partner, retired partner or stockholder of a Holder, (ii) is a Holder’s family member or trust for the benefit of an individual Holder, or (iii) after such assignment or transfer, holds at least 1,500,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations or the like), provided: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 1.13 below; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act.

1.12 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to include any of such securities in any registration filed under Section 1.2, Section 1.3 or Section 1.4 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders that are included or (b) to demand registration of their securities.

1.13 “Market Stand-Off” Agreement.

(a) Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s Initial Offering and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (l80)

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days but subject to such extension or extensions, not to exceed 18 days after expiration of the initial 180-day period, as may be required by the underwriters in order to publish research reports while complying with NASD Rule 2711 or NYSE Member Rule 472 or any successor rule or regulation) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock held immediately prior to the effectiveness of the Registration Statement for such offering, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 1.13 shall apply only to the Company’s initial offering of equity securities, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the Holders if all officers, directors, Key Common Holders (as defined in the Company’s First Refusal and Co-Sale Agreement dated of even date herewith) and greater than one percent (1%) stockholders of the Company enter into similar agreements. The underwriters in connection with the Company’s Initial Offering are intended third-party beneficiaries of this Section 1.13 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in the Company’s Initial Offering that are consistent with this Section 1.13 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such agreements. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

(b) Each Holder agrees that a legend reading substantially as follows shall be placed on all certificates representing all Registrable Securities of each Holder (and the shares or securities of every other person subject to the restriction contained in this Section 1.13):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF UP TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES.

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1.14 Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in this Section 1 (i) after five (5) years following the consummation of the Initial Offering, or (ii) as to any Holder, such earlier time after the Initial Offering at which such Holder (A) can sell all shares held by it in compliance with Rule 144 or (B) holds one percent (1%) or less of the Company’s outstanding Common Stock and all Registrable Securities held by such Holder (together with any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold in any three (3)-month period without registration in compliance with Rule 144. Notwithstanding the foregoing, no Holder shall be entitled to exercise any right provided for in this Section 1 with respect to any Special Mandatory Conversion Shares.

2. Covenants of the Company.

2.1 Delivery of Financial Statements. The Company shall, upon request, deliver to each Investor (or transferee of an Investor) that holds at least 2,000,000 shares of Common Stock issuable or issued upon conversion of the Preferred Stock (subject to appropriate adjustment for stock splits, stock dividends, combinations or the like, but excluding any Special Mandatory Conversion Shares and including any shares held by any affiliate of a fund Investor) (a “Major Investor”):

(a) as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by independent public accountants of nationally recognized standing selected by the Company;

(b) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement, statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter;

(c) within thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows and balance sheet for and as of the end of such month, in reasonable detail;

(d) as soon as practicable, but in any event at least thirty (30) days prior to the end of each fiscal year, a budget and business plan for the next fiscal year and, prepared on a monthly basis, including balance sheets, income statements and statements of cash flows for such months and, as soon as prepared, any other budgets or revised budgets prepared by the Company;

(e) with respect to the financial statements called for in subsections (b) and (c) of this Section 2.1, an instrument executed by the Chief Financial Officer or President of the Company certifying that such financials were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment; and

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(f) such other information relating to the financial condition, business or corporate affairs of the Company as the Major Investor may from time to time request, provided, however, that the Company shall not be obligated under this subsection (f) or any other subsection of Section 2.1 to provide information that it deems in good faith to be a trade secret or similar confidential information.

2.2 Inspection. The Company shall permit each Major Investor, at such Major Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to any information that it reasonably considers, after consultation with legal counsel, to be a trade secret or similar confidential information.

2.3 Assignment/Termination of Information and Inspection Covenants. The rights to cause the Company to provide information pursuant to Sections 2.1 and 2.2 may be assigned (but only with all related obligations) by an Investor to a transferee or assignee of such securities that (i) is a subsidiary, parent, partner, limited partner, retired partner or stockholder of an Investor, (ii) is an Investor’s family member or trust for the benefit of an individual Investor, or (iii) after such assignment or transfer, holds at least 2,000,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations or the like and including any shares held by any affiliate of a fund Investor). The covenants set forth in Sections 2.1 and 2.2 shall terminate and be of no further force or effect upon the earlier to occur of (x) the consummation of the Qualified Public Offering, (y) when the Company first becomes subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall first occur, or (z) the consummation of a Liquidation Event, as that term is defined in the Company’s Certificate of Incorporation (as amended from time to time).

2.4 Right of First Offer. Subject to the terms and conditions specified in this Section 2.4, the Company hereby grants to each Major Investor a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Section 2.4, the term “Major Investor” includes (i) if the Major Investor is a partnership, corporation or other entity, any general partners and affiliates, including affiliated venture capital funds, of such Major Investor, or (ii) if the Major Investor is an individual, trusts for the benefit of such Major Investor or his or her immediate family members. A Major Investor shall be entitled to apportion the right of first offer hereby granted it among itself and its partners and affiliates, immediate family members or trusts in such proportions as it deems appropriate.

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Each time the Company proposes to offer any shares of, or securities convertible into or exchangeable or exercisable for any shares of, its capital stock (“Shares”), the Company shall first make an offering of such Shares to each Major Investor in accordance with the following provisions:

(a) The Company shall deliver a notice in accordance with Section 4.5 (“Notice”) to the Major Investors, and, in the case of a Down-Round Financing (as defined below), the former Major Investors stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered and (iii) the price and terms upon which it proposes to offer such Shares.

(b) By written notification received by the Company within fifteen (15) calendar days after the giving of Notice, each Major Investor may elect to purchase, at the price and on the terms specified in the Notice, up to that portion of such Shares that equals the proportion that the number of shares of Common Stock issuable or issued upon conversion of the Preferred Stock and held by such Major Investor (but excluding any Special Mandatory Conversion Shares) bears to the total number of shares of Common Stock of the Company then outstanding (assuming full conversion and exercise of all convertible and exercisable securities then outstanding and including any Special Mandatory Conversion Shares). The Company shall promptly, in writing, inform each Major Investor that elects to purchase all the shares available to it (a “Fully-Exercising Investor”) of any other Major Investor’s failure to do likewise. During the five (5) day period commencing after such information is given, each Fully-Exercising Investor may elect to purchase that portion of the Shares for which Major Investors were entitled to subscribe, but which were not subscribed for by the Major Investors, that is equal to the proportion that the number of shares of Common Stock issuable or issued upon conversion of the Preferred Stock and held by such Fully-Exercising Investor (but excluding any Special Mandatory Conversion Shares) bears to the total number of shares Common Stock issuable or issued upon conversion of the Preferred Stock and held by all Fully-Exercising Investors who wish to purchase some of the unsubscribed shares (but excluding any Special Mandatory Conversion Shares).

(c) If all Shares that Major Investors are entitled to obtain pursuant to subsection 2.4(b) are not elected to be obtained as provided in subsection 2.4(b) hereof, the Company may, during the ninety (90) day period following the expiration of the period provided in subsection 2.4(b) hereof, offer the remaining unsubscribed portion of such Shares to any person or persons at a price not less than that, and upon terms no more favorable to the Major Investor than those, specified in the Notice. If the Company does not enter into an agreement for the sale of the Shares within such period, or if such agreement is not consummated within sixty (60) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Major Investors in accordance herewith.

(d) The right of first offer in this Section 2.4 shall not be applicable to (i) the issuance or sale of Common Stock (or options or warrants therefor) to employees, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to written plans or agreements approved by the Company’s Board of Directors, (ii) securities issued pursuant to a stock dividend or distribution

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on Preferred Stock, stock split or similar reorganization, (iii) the issuance of securities in a Qualified Public Offering, (iv) the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities, (v) the issuance of securities in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise that is approved by the Company’s Board of Directors, (vi) the issuance and sale of Series D Preferred Stock pursuant to the Series D Agreement, (vii) the issuance of stock, warrants or other securities or rights to persons or entities pursuant to corporate partnering agreements, provided such issuances are primarily for other than equity financing purposes and are approved by the Board of Directors of the Company, or (viii) securities issued or issuable pursuant to equipment lease financings or bank credit arrangements, provided such issuances are primarily for other than equity financing purposes and are approved by the Board of Directors of the Company. In addition to the foregoing, the right of first offer in this Section 2.4 shall not be applicable with respect to any Major Investor in any subsequent offering of Shares if (i) at the time of such offering, the Major Investor is not an “accredited investor,” as that term is then defined in Rule 501(a) of the Act and (ii) such offering of Shares is otherwise being offered only to accredited investors.

(e) The rights provided in this Section 2.4 may not be assigned or transferred by any Major Investor; provided, however, that a Major Investor that is a venture capital fund may assign or transfer such rights to an affiliated venture capital fund or partners of such funds.

(f) Notwithstanding any of the foregoing in this Section 2.4, if the Company proposes to offer any Shares (excluding shares described in Section 2.4(d)) in an equity financing with a primary purpose of raising capital for the Company and at a price per share less than that received by the Company in any previous equity financing (as adjusted for stock splits, stock dividends, recapitalizations or the like) (such financing, a “Down-Round Financing”), then a right of first offer to participate in such Down-Round Financing shall apply with respect to any Special Mandatory Conversion Shares held by any Major Investor or former Major Investor. In such event, each such Major Investor or former Major Investor may elect to purchase, in addition to any other right of first offer with respect to the issuance of the Shares held by such Major Investor pursuant to Section 2.4(b), at the price and on the terms specified in the Notice, up to that portion of such Shares that equals the proportion that one-half (1/2) of the number of Special Mandatory Conversion Shares held by such Major Investor or former Major Investor bears to the total number of shares of Common Stock of the Company then outstanding (assuming full conversion and exercise of all convertible and exercisable securities then outstanding and including any Special Mandatory Conversion Shares). The limited right of first offer set forth in this Section 2.4(f) shall be exercised by any such Major Investor or former Major Investor that this subsection applies to by providing the Company with written notification within fifteen (15) calendar days after the Company has delivered the Notice.

(g) The covenants set forth in this Section 2.4 shall terminate and be of no further force or effect upon the earlier of the consummation of (i) the Qualified Public Offering or (ii) a Liquidation Event, as that term is defined in the Company’s Certificate of Incorporation (as amended from time to time).

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2.5 Proprietary Information and Inventions Agreements. The Company shall require all employees and consultants with access to confidential information to execute and deliver a Proprietary Information and Inventions Agreement or Consulting Agreement in substantially the form approved by the Company’s Board of Directors.

2.6 Employee Agreements. Unless approved by the Board of Directors of the Company, all future employees of the Company who shall purchase, or receive options to purchase, shares of the Company’s Common Stock following the date hereof shall be required to execute stock purchase or option agreements providing for (i) vesting of shares over a four-year period with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or services, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months thereafter, (ii) a 180-day lockup period in connection with the Company’s initial public offering and (iii) restrictions against transfer of non-vested stock (other than to a family trust). The Company shall retain a right of first refusal on transfers until the Company’s initial public offering and the right to repurchase unvested shares at cost. If the Company does not exercise such right of first refusal, the Company shall assign such right to the Investors on a pro-rata basis.

2.7 Drag Along Agreements. Any drag-along or equivalent agreement to which the Holders (and/or the Company) may become a party in the future shall provide that the liability for indemnification, if any, of such Holder in such sale is several, not joint, is pro rata in accordance with such Holder’s relative stock ownership of the Company, and will not exceed the consideration payable to such Holder, if any, in such sale of shares of capital stock of the Company (except in the case of potential liability for fraud or willful misconduct by such Holder).

2.8 Director’s Liability and Indemnification. Unless the Board of Directors of the Company approves otherwise, the Company shall maintain adequate directors and officers liability insurance with coverage limits customary for similarly situated companies, but in any event with coverage equal to at least $5,000,000.

2.9 Reimbursement of Certain Expenses. The Company will reimburse the members of the Board of Directors nominated by H.I.G. Venture Partners II, L.P., Delphi Ventures, TPG Biotechnology Partners II, L.P., Ventures West (or their affiliates) and Novo A/S pursuant to the Amended and Restated Voting Agreement for such member’s reasonable out-of-pocket expenses incurred in connection with his or her respective attendance at meetings of the Board of Directors of the Company.

2.10 Termination. The covenants set forth in Section 2.5 and Section 2.6 shall terminate and be of no further force or effect upon the consummation of (i) the Initial Offering or (ii) a Liquidation Event, as that term is defined in the Company’s Certificate of Incorporation (as amended from time to time).

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3. Special Mandatory Conversion.

3.1 In the event:

(a) the Company consummates a financing that results in the sale of any shares of, or securities convertible into or exchangeable or exercisable for any shares of, its capital stock at a price per share that is less than the Original Issue Price (as defined in the Company’s Certificate of Incorporation (as amended from time to time)) of the Series D Preferred Stock, as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations, or the like (an “Applicable Down Round Financing”);

(b) the Board of Directors of the Company (including at least one of the directors elected exclusively by the holders of each of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock) determines (with interested directors able to vote for purposes of this provision) in good faith that it is in the best interests of the Company for the holders of Preferred Stock of the Company to participate in such Applicable Down Round Financing (in which case such financing will be deemed a “Mandatory Offering”) and determines the aggregate dollar amount to be invested by all holders of Preferred Stock (the “Aggregate Investment Amount”), which amount may be more than or less than any particular holder’s right to participate in the financing pursuant to any contractual right of first offer or similar right;

(c) the Company delivers a notice (“Notice”) to the holders of Preferred Stock (1) stating the Company’s bona fide intention to consummate such financing, (2) indicating the number of securities to be offered, (3) indicating the price and terms upon which it proposes to offer such securities, (4) identifying the Pro Rata Share (as defined below) of each holder of Preferred Stock of the Aggregate Investment Amount, and (5) offering each holder of Preferred Stock the right to purchase such holder’s Pro Rata Share of the Aggregate Investment Amount within the time periods set forth in the Notice; and

(d) a holder and/or an affiliate of such holder (a “Non-Participating Holder”) does not acquire at least its Pro Rata Share of the Aggregate Investment Amount (whether or not such Aggregate Investment Amount is more than or less than the aggregate dollar amount actually received by the Company from the holders in connection with the Mandatory Offering, as may be the case, for example, if certain holders do not participate in the Mandatory Offering) within the time periods set forth in the Notice (provided that the time periods set forth in the Notice provide for the closing of such purchase and sale on a date that is no less than fifteen (15) business days from the delivery date of the Notice);

then that percentage of each Non-Participating Holder’s shares of Preferred Stock equal to the percentage of such Non-Participating Holder’s Pro Rata Share of the Aggregate Investment Amount not acquired by such Non-Participating Holder shall automatically and without further action on the part of such holder be converted, effective upon, subject to and concurrently with the consummation of the Mandatory Offering (the “Mandatory Offering Date”), into shares of

21

Common Stock of the Company at a Conversion Price equal to the Original Issue Price for such series (as adjusted for stock splits, stock dividends, recapitalizations or the like but without any adjustment by reason of consummation of the Mandatory Offering). For purposes of this Section 3, each holder’s Pro Rata Share of the Aggregate Investment Amount shall be an amount determined by multiplying the Aggregate Investment Amount by a fraction, the numerator of which shall be the number of shares of Common Stock issuable upon conversion of each share of Preferred Stock then held by such holder and the denominator of which shall be the total number of shares of Common Stock issuable upon conversion of the Preferred Stock then outstanding. For purposes of calculating a holder’s Pro Rata Share, the applicable number of shares of Common Stock issuable upon conversion of the shares of Preferred Stock shall be calculated based on the number of shares of Preferred Stock outstanding immediately following the closing of the Mandatory Offering, assuming full participation of all such holders of Preferred Stock in such Mandatory Offering; provided, however, a holder’s Pro Rata Share shall in no event exceed an amount equal to fifty percent (50%) of the aggregate amount that such holder has previously invested in the Company. For purposes of determining whether a holder has purchased its Pro Rata Share of the Aggregate Investment Amount, all shares held by affiliated holders shall be aggregated.

3.2 The holder of any shares of Preferred Stock converted pursuant to this Section 3 shall deliver to the Company during regular business hours at the office of any transfer agent of the Company for the Preferred Stock, or at such other place as may be designated by the Company, the certificate or certificates for the shares so converted, duly endorsed or assigned in blank or to the Company. As promptly as practicable thereafter, the Company shall issue and deliver to such holder, at the place designated by such holder, a certificate or certificates for the number of full shares of the Common Stock to be issued and such holder shall be deemed to have become a stockholder of record of Common Stock on the Mandatory Offering Date, unless the transfer books of the Company are closed on that date, in which event such holder shall be deemed to have become a stockholder of record of Common Stock on the next succeeding date on which the transfer books are open. From and after the Mandatory Offering Date, the certificate or certificates representing shares of Preferred Stock converted pursuant to this Section 3 shall represent the shares of Common Stock into which such shares of Preferred Stock were converted.

3.3 In the event that a holder of Preferred Stock converts any Preferred Stock into Common Stock pursuant to subsection 4(a) of the Company’s Certificate of Incorporation (as amended from time to time) within ninety (90) days prior to the date of closing of a Mandatory Offering, such holder shall be deemed to have converted such shares pursuant to this Section 3.

3.4 Notwithstanding any of the foregoing, this Section 3 shall not apply to a holder that, together with its affiliates, holds less than 500,000 shares of Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to the Preferred Stock).

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3.5 POWER OF ATTORNEY. SOLELY IN CONNECTION WITH THE EFFECTUATION OF THE SPECIAL MANDATORY CONVERSION CONTEMPLATED BY THIS SECTION 3 IN CONNECTION WITH WHICH AN INVESTOR HAS NOT PURCHASED ITS PRO RATA SHARE OF THE AGGREGATE INVESTMENT AMOUNT IN A MANDATORY OFFERING, EACH INVESTOR HEREBY EXPRESSLY AND IRREVOCABLY APPOINTS THE COMPANY’S PRESIDENT AS SUCH INVESTOR’S ATTORNEY-IN-FACT TO TAKE ANY AND ALL SUCH OTHER ACTION IN CONNECTION WITH A SPECIAL MANDATORY CONVERSION EFFECTED IN ACCORDANCE WITH THIS SECTION 3. SUCH APPOINTMENT OF THE COMPANY’S PRESIDENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND MAY NOT BE REVOKED DURING THE TERM OF THIS AGREEMENT.

4. Miscellaneous.

4.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

4.2 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

4.3 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

4.5 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 4.5).

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4.6 Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

4.7 Entire Agreement; Amendments and Waivers. This Agreement (including the Exhibits hereto, if any) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of at least sixty percent (60%) of Common Stock issuable or issued upon conversion of the Preferred Stock; provided, however, that if such amendment or waiver affects the Founders’ Stock (i) in a manner different than securities issued to the Investors and (ii) in a manner adverse to the interests of the holders of the Founders’ Stock, then such amendment shall require the consent of the holder or holders of a majority of the Founders’ Stock, provided further, that any amendment or waiver of Section 2.7 and Section 2.8 hereof shall require the written consent of Novo A/S and, provided further, that any amendment which is not generally applicable to all Investors that would adversely affect the rights of any Investor as compared to all other Investors shall only be effective with the written consent of such Investor. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Registrable Securities, each future holder of all such Registrable Securities, and the Company.

4.8 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

4.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by affiliated entities (including affiliated venture capital funds) or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

4.10 Additional Investors. Notwithstanding Section 4.7, no consent shall be necessary to add additional Investors as signatories to this Agreement, provided that such Investors have purchased Series D Preferred Stock pursuant to the subsequent closing provisions of Section 1.3 of the Series D Agreement, as the same may hereafter be modified or amended.

4.11 Clarification. For purposes of clarification and the avoidance of doubt, the phrases “Common Stock issuable or issued upon conversion of the Preferred Stock” shall not include Common Stock that did not or will not derive from the Preferred Stock.

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IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first above written.

ALDER BIOPHARMACEUTICALS, INC.
By:	/s/ Randall C. Schatzman
Name: Randall C. Schatzman, Ph.D.
Title: President and CEO
Address: 11804 North Creek Parkway South
Bothell, WA 98011

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

FOUNDERS

/s/ Randall Schatzman            

Randall Schatzman

Address: 11804 North Creek Parkway South

                Bothell, WA 98011

/s/ Mark Litton            

Mark Litton

Address: 11804 North Creek Parkway South

                Bothell, WA 98011

/s/ John Latham            

John Latham

Address: 11804 North Creek Parkway South

                Bothell, WA 98011

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
DELPHI VENTURES VII, L.P.
By:	Delphi Management Partners VII, LLC
	General Partner
By:	/s/ Deepika R. Pakianatham
Name: Deepika R. Pakianathan
Title: Managing Member
Address: 3000 Sand Hill Road
Bldg 1, Suite 135
Menlo Park, CA 94025
DELPHI BIOINVESTMENTS VII, L.P.
By:	Delphi Management Partners VII, LLC
	General Partner
By:	/s/ Deepika R. Pakianathan
Name: Deepika R. Pakianathan
Title: Managing Member
Address: 3000 Sand Hill Road
Bldg 1, Suite 135
Menlo Park, CA 94025

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
TPG BIOTECHNOLOGY PARTNERS II, L.P.
By:	TPG Biotechnology Genpar II, L.P.
By:	TPG Biotechnology Genpar Advisors
	II, LLC , Its Manager
By:	/s/ Ronald Cami
Name: Ronald Cami
Title: Vice President
Address: 301 Commerce Street, Suite 3300
Fort Worth, Texas 76102

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
H.I.G. VENTURE PARTNERS II, L.P.
By:	H.I.G. Venture Advisors II, L.L.C.
By:	H.I.G. – GPII, Inc. Its Manager
By:	/s/ Richard Siegel
	Richard Siegel
Name:	Authorized Signatory
Title:
Address: 1450 Brickell Avenue, 31st Floor
Miami, FL 33131
H.I.G. VENTURES - ALDER, LLC
By:	/s/ Richard Siegel
	Richard Siegel
Name:	Authorized Signatory
Title:
Address: 1450 Brickell Avenue, 31st Floor
Miami, FL 33131

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
SEVIN ROSEN FUND IX L.P.
By:	SRB Associates IX L.P.
	Its General Partner
By:	SRB Associates IX L.L.C.
	Its General Partner
By:	/s/ John V. Jaggers
	Member
	John V. Jaggers
	Print Name
SEVIN ROSEN IX AFFILIATES FUND L.P.
By:	SRB Associates IX L.P.
	Its General Partner
By:	SRB Associates IX L.L.C.
	Its General Partner
By:	/s/ John V. Jaggers
	Member
	John V. Jaggers
	Print Name
Address: c/o The Sevin Rosen Funds
13455 Noel Road, Suite 1670
Dallas, Texas 75240

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
The Dow Family Trust
By:	/s/ Stephen Dow
Name:	Stephen Dow
Title:	Trustee
	Address:

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
VENTURES WEST 8 LIMITED PARTNERSHIP
By:	its general partner,
	Ventures West 8 Management Ltd.
By:	/s/ Kenneth Galbraith	/s/ David Berkowitz
Name:	Kenneth Galbraith	David Berkowitz
Title:	Senior VP	Senior VP
Address: 999 West Hastings Street, Suite 400
Vancouver, British Columbia
Canada V6C 2W2

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:

WASHINGTON RESEARCH FOUNDATION

/s/ Jeff Eby            

Jeff Eby, CFO

Address: 2815 Eastlake Avenue East

Suite 300

Seattle, WA 98102-3086

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
NOVO A/S
By:	/s/ Peter Moldt
	Name: Peter Moldt
	Title: Partner
Address: Tuborg Havnevej 19
DK 2900 Hellerup
Denmark

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:

/s/ Paul Abrams            

Paul Abrams, MD, JD

Address:

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:

/s/ Alan Bruce Montgomery

Alan Bruce Montgomery

Address:

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

INVESTOR:

/s/ Clay B. Siegall

Clay B. Siegall

Address:

SIGNATURE PAGE TO ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

SCHEDULE A

Series A Holders

Sevin Rosen Bayless Management Company

Sevin Rosen IX Affiliates Fund L.P.

Sevin Rosen Fund IX L.P.

Ventures West 8 Limited Partnership

Washington Research Foundation

Paul Abrams, MD, JD

Karl Erik and Ingegerd Hellstrom, husband and wife

Jeffrey Howbert, Ph.D.

HEWM/VLG Investments LLC

Sonya Erickson

John Morrow

Chesterton Partners, LP

WS Investment Company, LLC (2005A)

WS Investment Company, LLC (2005C)

Series B Holders

H.I.G. Venture Partners II, L.P.

H.I.G. Ventures—Alder, LLC

Sevin Rosen Bayless Management Company

Sevin Rosen IX Affiliates Fund L.P.

Sevin Rosen Fund IX L.P.

Ventures West 8 Limited Partnership

Washington Research Foundation

Clay B. Siegall

VLG Investments 2006 LLC

John Robertson

Sonya F. Erickson

Series C Holders

Delphi Ventures VII, L.P.

Delphi BioInvestments VII, L.P.

TPG Biotechnology Partners II, L.P.

H.I.G. Venture Partners II, L.P.

H.I.G. Ventures—Alder, LLC

Sevin Rosen IX Affiliates Fund L.P.

Sevin Rosen Fund IX L.P.

Ventures West 8 Limited Partnership

Washington Research Foundation

Karl Erik and Ingegerd Hellstrom, husband and wife

Series D Holders

Delphi Ventures VII, L.P.

Delphi BioInvestments VII, L.P.

TPG Biotechnology Partners II, L.P.

H.I.G. Venture Partners II, L.P.

H.I.G. Ventures—Alder, LLC

Sevin Rosen IX Affiliates Fund L.P.

Sevin Rosen Fund IX L.P.

The Dow Family Trust

Ventures West 8 Limited Partnership

Washington Research Foundation

Clay B. Siegall

Alan Bruce Montgomery

Paul Abrams, MD, JD

Novo A/S

Schering Corporation and/or its affiliates or assignees

EX-10.2

EXHIBIT 10.2

ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED

2005 STOCK PLAN

Adopted by the Board of Directors and approved by the stockholders on July 19, 2005.

As amended by the Board of Directors and approved by the stockholders on July 26, 2006.

As amended by the Board of Directors and approved by the stockholders on December 28, 2007.

As amended and restated by the Board of Directors on March 7, 2012 and by the stockholders on April 16, 2012.

As amended and restated by the Board of Directors on April 16, 2012 and by the stockholders on April 16, 2012.

As amended and restated by the Board of Directors on July 18, 2012 and by the stockholders on August 13, 2012.

ALDER BIOPHARMACEUTICALS, INC.

AMENDED AND RESTATED

2005 STOCK PLAN

1. Purposes of the Plan. The purposes of this Amended and Restated 2005 Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code and the regulations and interpretations promulgated thereunder. Stock purchase rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or its Committee appointed pursuant to Section 4 of the Plan.

(b) “Affiliate” means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity.

(c) “Applicable Laws” means the legal requirements relating to the administration of stock option and restricted stock purchase plans, including under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the Code, any Stock Exchange rules or regulations and the applicable laws, rules and regulations of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time.

(d) “Board” means the Board of Directors of the Company.

(e) “Cause” shall have the meaning ascribed to such term in any written agreement between the Optionee and the Company defining such term and, in the absence of such agreement, shall mean with respect to an Optionee: (i) Optionee’s continued failure, in the reasonable opinion of the Board, to perform one or more assigned duties or responsibilities to the Company, such failure being evidenced by a written report submitted on behalf of the Company to the Board so indicating failure and including a remedy or remedies reasonably satisfactory to the Board for correcting the asserted failure(s); (ii) failure to follow the lawful directives of Optionee’s manager(s), such failure being evidenced by a written report submitted by such manager(s) to the Board so indicating failure and including a remedy or remedies reasonably satisfactory to the Board; (iii) material violation of any Company policy, as evidenced by Optionee’s signature on a then-current copy of the Company Policy Handbook; (iv) commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to the Company; (v) unauthorized use or

disclosure of any proprietary information or trade secrets of the Company or any other party to whom Optionee owes an obligation of nondisclosure as a result of the relationship with the Company; (vi) material breach by Optionee of any obligations under any written agreement or covenant with the Company; or (vii) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the Board approve as the basis for termination of employment.

(f) “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, a merger or other reorganization in which the Company is not the surviving entity or pursuant to which the shareholders of the Company immediately prior to the transaction own less than fifty percent (50%) of the combined voting power of the Company following the transaction, or the acquisition by one person or entity of more than fifty percent (50%) of the voting power of the Company in a single transaction or series of related transactions; provided that none of the following shall be considered a Change of Control transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Company or (ii) an equity financing in which the Company is the surviving corporation.

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below.

(i) “Common Stock” means the Common Stock of the Company.

(j) “Company” means Alder BioPharmaceuticals, Inc., a Delaware corporation.

(k) A “Constructive Termination” shall have the meaning ascribed to such term in any written agreement between the Optionee and the Company defining such term and, in the absence of such agreement, shall be deemed to occur with respect to an Optionee: if Optionee resigns within thirty (30) days following any of: (i) a reduction of Optionee’s then-current base salary; (ii) a material adverse change in Optionee’s position causing such position to be of materially reduced status or responsibility; or (iii) relocation of assigned work site more than fifty (50) miles from Optionee’s work site immediately prior to such relocation.

(l) “Consultant” means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and any director of the Company whether compensated for such services or not.

(m) “Continuous Service Status” means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors. A change in status from an Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of Continuous Service Status.

(n) “Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company.

(o) “Director” means a member of the Board.

(p) “Employee” means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Administrator in its discretion, subject to any requirements of the Code or the Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(r) “Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in the Wall Street Journal for the applicable date.

(s) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement.

(t) “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.

(u) “Named Executive” means any individual who, on the last day of the Company’s fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among the four most highly compensated officers of the Company (other than the chief executive officer). Such officer status shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act.

(v) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement.

(w) “Option” means a stock option granted pursuant to the Plan.

(x) “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

(y) “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options are exchanged for Options with a lower exercise price or are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

(z) “Optioned Stock” means the Common Stock subject to an Option.

(aa) “Optionee” means an Employee or Consultant who receives an Option.

(bb) “Parent” means a “parent corporation,”, whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

(cc) “Participant” means any holder of one or more Options or Stock Purchase Rights, or the Shares issuable or issued upon exercise of such awards, under the Plan.

(dd) “Plan” means this Amended and Restated 2005 Stock Plan.

(ee) “Reporting Person” means an officer, Director, or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

(ff) “Restricted Stock” means Shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 11 below.

(gg) “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Purchase Right granted under the Plan and includes any documents attached to such agreement.

(hh) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

(ii) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

(jj) “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

(kk) “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 below.

(ll) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

(mm) “Ten Percent Holder” means a person who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary.

3. Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is 14,640,000 Shares of Common Stock. The Shares may be authorized, but unissued, or reacquired Common Stock. If an award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares of Common Stock which are retained by the Company upon exercise of an award in order to satisfy the exercise or purchase price for such award or any withholding taxes due with respect to such exercise or purchase shall be treated as not issued and shall continue to be available under the Plan. Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have shall not be available for future grant under the Plan.

4. Administration of the Plan.

(a) General. The Plan shall be administered by the Board or a Committee, or a combination thereof, as determined by the Board. The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by the Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

(b) Committee Composition. If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and remove all members of a Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions. The Committee shall in all events conform to any requirements of the Applicable Laws.

(c) Powers of the Administrator. Subject to the provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

(i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(p) of the Plan, provided that such determination shall be applied consistently with respect to Participants under the Plan;

(ii) to select the Employees and Consultants to whom Plan awards may from time to time be granted;

(iii) to determine whether and to what extent Plan awards are granted;

(iv) to determine the number of Shares of Common Stock to be covered by each award granted;

(v) to approve the form(s) of agreement(s) used under the Plan;

(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, any pro rata adjustment to vesting as a result of a Participant’s transitioning from full- to part-time service (or vice versa), and any restriction or limitation regarding any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

(vii) to determine whether and under what circumstances an Option may be settled in cash under Section 10(c) instead of Common Stock;

(viii) to implement an Option Exchange Program on such terms and conditions as the Administrator in its discretion deems appropriate, provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Optionee shall be made without the prior written consent of the Optionee;

(ix) to adjust the vesting of an Option held by an Employee or Consultant as a result of a change in the terms or conditions under which such person is providing services to the Company;

(x) to construe and interpret the terms of the Plan and awards granted under the Plan, which constructions, interpretations and decisions shall be final and binding on all Participants; and

(xi) in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs.

5. Eligibility.

(a) Recipients of Grants. Nonstatutory Stock Options and Stock Purchase Rights may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.

(b) Type of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

(c) ISO $100,000 Limitation. Notwithstanding any designation under Section 5(b), to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(c), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such Option.

(d) No Employment Rights. The Plan shall not confer upon any Participant any right with respect to continuation of an employment or consulting relationship with the Company, nor shall it interfere in any way with such Participant’s right or the Company’s right to terminate the employment or consulting relationship at any time for any reason.

6. Term of Plan. The Plan shall become effective upon its adoption by the Board of Directors. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 16 of the Plan.

7. Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than ten years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be five years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

8. [Reserved.]

9. Option Exercise Price and Consideration.

(a) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

(i) In the case of an Incentive Stock Option

(A) granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant; or

(B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option, the per share Exercise Price shall be such price as determined by the Administrator provided that if such eligible person is, at the time of the grant of such Option, a Named Executive of the Company, the per share Exercise Price shall be no less than 100% of the Fair Market Value on the date of grant if such Option is intended to qualify as performance-based compensation under Section 162(m) of the Code.

(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.

(b) Permissible Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) subject to any requirements of the Applicable Laws (including without limitation Section 153 of the Delaware General Corporation Law), delivery of Optionee’s promissory note having such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate after taking into account the potential accounting consequences of permitting an Optionee to deliver a promissory note; (4) cancellation of indebtedness; (5) other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised, provided that in the case of Shares acquired, directly or indirectly, from the Company, such Shares must have been owned by the Optionee for more than six months on the date of surrender (or such other period as may be required to avoid the Company’s incurring an adverse accounting charge); (6) if, as of the date of exercise of an Option the Company then is permitting employees to engage in a “same-day sale” cashless brokered exercise program involving one or more brokers, through such a program that complies with the Applicable Laws (including without limitation the requirements of Regulation T and other applicable regulations promulgated by the Federal Reserve Board) and that ensures prompt delivery to the company of the amount required to pay the exercise price and any applicable withholding taxes; or (7) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.

10. Exercise of Option.

(a) General.

(i) Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the term of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company and/or the Optionee.

(ii) Leave of Absence. The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the event of military leave, vesting shall toll during any unpaid portion of

such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(iii) Minimum Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

(iv) Procedures for and Results of Exercise. An Option shall be deemed exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised. Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 9(b) of the Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form of consideration at the time of any Option exercise.

Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(v) Rights as Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 14 of the Plan.

(b) Termination of Employment or Consulting Relationship. Except as otherwise set forth in this Section 10(b), the Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time. Unless the Administrator otherwise provides in the Option Agreement, to the extent that the Optionee is not vested in Optioned Stock at the date of termination of his or her Continuous Service Status, or if the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Option Agreement or below (as applicable), the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to Section 7).

The following provisions (1) shall apply to the extent an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, and (2) establish the minimum post-termination exercise periods that may be set forth in an Option Agreement:

(i) Termination other than Upon Disability or Death. In the event of termination of Optionee’s Continuous Service Status other than under the circumstances set forth in subsections (ii) and (iii) below, such Optionee may exercise an Option for 30 days following such termination to the extent the Optionee was vested in the Optioned Stock as of the date of such termination. No termination shall be deemed to occur and this Section 10(b)(i) shall not apply if (i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an Employee who becomes a Consultant.

(ii) Disability of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result of his or her disability (including a disability within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at any time within twelve months following such termination to the extent the Optionee was vested in the Optioned Stock as of the date of such termination.

(iii) Death of Optionee. In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of the Option, or within thirty days following termination of Optionee’s Continuous Service Status, the Option may be exercised by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance at any time within twelve months following the date of death, but only to the extent the Optionee was vested in the Optioned Stock as of the date of death or, if earlier, the date the Optionee’s Continuous Service Status terminated.

(c) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

11. Stock Purchase Rights.

(a) Rights to Purchase. When the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

(b) Repurchase Option.

(i) General. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason (including death or disability). Subject to any requirements of the Applicable Laws, the terms of the Company’s repurchase option (including without limitation the price at

which, and the consideration for which, it may be exercised, and the events upon which it shall lapse) shall be as determined by the Administrator in its sole discretion and reflected in the Restricted Stock Purchase Agreement.

(ii) Leave of Absence. The Administrator shall have the discretion to determine whether and to what extent the lapsing of Company repurchase rights shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, such lapsing shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the event of military leave, the lapsing of Company repurchase rights shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given “vesting” credit with respect to Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

(d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the Plan.

12. Taxes.

(a) As a condition of the grant, vesting or exercise of an Option or Stock Purchase Right granted under the Plan, the Participant (or in the case of the Participant’s death, the person exercising the Option or Stock Purchase Right) shall make such arrangements as the Administrator may require for the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with such grant, vesting or exercise of the Option or Stock Purchase Right or the issuance of Shares. The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied. If the Administrator allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations under this Section 12 (whether pursuant to Section 12(c), (d) or (e), or otherwise), the Administrator shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

(b) In the case of an Employee and in the absence of any other arrangement, the Employee shall be deemed to have directed the Company to withhold or collect from his or her compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of an exercise of the Option or Stock Purchase Right.

(c) This Section 12(c) shall apply only after the date, if any, upon which the Common Stock becomes a Listed Security. In the case of Participant other than an Employee (or in the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations), in the absence of any other arrangement and to the extent permitted under the Applicable Laws, the Participant shall be deemed to have elected to have the Company withhold from the Shares to be issued upon exercise of the Option or Stock Purchase Right that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the amount required to be withheld. For purposes of this Section 12, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Laws (the “Tax Date”).

(d) If permitted by the Administrator, in its discretion, a Participant may satisfy his or her tax withholding obligations upon exercise of an Option or Stock Purchase Right by surrendering to the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld. In the case of shares previously acquired from the Company that are surrendered under this Section 12(d), such Shares must have been owned by the Participant for more than six (6) months on the date of surrender (or such other period of time as is required for the Company to avoid adverse accounting charges).

(e) Any election or deemed election by a Participant to have Shares withheld to satisfy tax withholding obligations under Section 12(c) or (d) above shall be irrevocable as to the particular Shares as to which the election is made and shall be subject to the consent or disapproval of the Administrator. Any election by a Participant under Section 12(d) above must be made on or prior to the applicable Tax Date.

(f) In the event an election to have Shares withheld is made by a Participant and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the Option or Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

13. Non-Transferability of Options and Stock Purchase Rights.

(a) General. Except as set forth in this Section 13, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a beneficiary by an Optionee will not constitute a transfer. An Option or Stock Purchase Right may be exercised, during the lifetime of the holder of an Option or Stock Purchase Right, only by such holder or a transferee permitted by this Section 13.

(b) Limited Transferability Rights. Notwithstanding anything else in this Section 13, the Administrator may in its discretion grant Nonstatutory Stock Options that may be transferred by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift or pursuant to domestic

relations orders to “Immediate Family Members” (as defined below) of the Optionee. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Optionee) control the management of assets, and any other entity in which these persons (or the Optionee) own more than fifty percent of the voting interests.

14. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

(a) Changes in Capitalization. Subject to any action required under Applicable Laws by the stockholders of the Company, the number of Shares of Common Stock covered by each outstanding award, and the number of Shares of Common Stock that have been authorized for issuance under the Plan but as to which no awards have yet been granted or that have been returned to the Plan upon cancellation or expiration of an award, as well as the price per Share of Common Stock covered by each such outstanding award, shall be proportionately adjusted for any increase or decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an award.

(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Option and Stock Purchase Right will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

(c) Corporate Transaction. In the event of a Corporate Transaction (including without limitation a Change of Control), each outstanding Option or Stock Purchase Right shall be assumed or an equivalent option or right shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the award or to substitute an equivalent option or right, in which case such Option or Stock Purchase Right shall terminate upon the consummation of the transaction.

For purposes of this Section 14(c), an Option or a Stock Purchase Right shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction or a Change of Control, as the case may be, each holder of an Option or Stock Purchase Right would be entitled to receive upon exercise of the award the same number and kind of shares of stock or the same amount of property, cash or

securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares of Common Stock covered by the award at such time (after giving effect to any adjustments in the number of Shares covered by the Option or Stock Purchase Right as provided for in this Section 14); provided that if such consideration received in the transaction is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon exercise of the award to be solely common stock of the Successor Corporation equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction.

Notwithstanding the above, in the event that (a) any Options that (i) do not remain in effect or (ii) are not assumed or substituted with a similarly equivalent option, restricted stock, stock appreciation rights, restricted stock units, or the like by the acquirer in connection with a Change of Control then, as of the date of the Change of Control, shall be deemed to accelerate and be fully vested as of the effective time of a Change of Control and/or (b) within one year following the closing of a Change of Control, Optionee’s employment is terminated by the Company or its successor other than for Cause or if Optionee resigns under circumstances that constitute a Constructive Termination, provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and Optionee executes a general release agreement prepared by the Company or its successor releasing any and all known and unknown claims Optionee may have against the Company or its successor upon such termination, then, as of the date of employment termination, any Options that remain in effect or are assumed by the acquirer or substituted with similarly equivalent options, restricted stock, stock appreciation rights, restricted stock units or the like by the acquirer in connection with such Change of Control shall accelerate and be deemed to have fully vested as of the date of employment termination.

An Option or Stock Purchase Right may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Option Agreement or Restricted Stock Purchase Agreement for such Option or Stock Purchase Right or as may be provided in any other written agreement between the Company or any Affiliate and Optionee.

(d) Certain Distributions. In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per Share of Common Stock covered by each outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

15. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship with the Company. Notice of the determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

16. Amendment and Termination of the Plan.

(a) Authority to Amend or Terminate. The Board may at any time amend, alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an adjustment pursuant to Section 14 above) shall be made that would materially and adversely affect the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without his or her consent. In addition, to the extent necessary and desirable to comply with the Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

(b) Effect of Amendment or Termination. Except as to amendments which the Administrator has the authority under the Plan to make unilaterally, no amendment or termination of the Plan shall materially and adversely affect Options or Stock Purchase Rights already granted, unless mutually agreed otherwise between the Optionee or holder of the Stock Purchase Rights and the Administrator, which agreement must be in writing and signed by the Optionee or holder and the Company.

17. Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising the award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by law. Shares issued upon exercise of awards granted prior to the date on which the Common Stock becomes a Listed Security shall be subject to a right of first refusal in favor of the Company pursuant to which the Participant will be required to offer Shares to the Company before selling or transferring them to any third party on such terms and subject to such conditions as is reflected in the applicable Option Agreement or Restricted Stock Purchase Agreement.

18. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

19. Agreements. Options and Stock Purchase Rights shall be evidenced by Option Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the Administrator shall from time to time approve.

20. Stockholder Approval. If required by the Applicable Laws, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under the Applicable Laws.

21. Information and Documents to Optionees and Purchasers. Prior to the date, if any, upon which the Common Stock becomes a Listed Security and if required by the Applicable Laws, the Company shall provide financial statements at least annually to each Optionee and to each individual who acquired Shares pursuant to the Plan, during the period such Optionee or purchaser has one or more Options or Stock Purchase Rights outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such individual owns such Shares. The Company shall not be required to provide such information if the issuance of Options or Stock Purchase Rights under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information.

22. Awards Granted to California Residents. Options or Stock Purchase Rights granted under the Plan on any date on which the Common Stock in not a Listed Security to persons resident in California shall be subject to the provisions set forth in Attachment A hereto. To the extent the provisions of the Plan conflict with the provisions set forth on Attachment A, the provisions on Attachment A shall govern the terms of such Options.

Attachment A

Provisions Applicable to Award Recipients

Resident in California

The following additional terms shall apply to (i) Options and Stock Purchase Rights granted on any date the Common Stock is not a Listed Security, and (ii) any Shares issued upon exercise of such awards on any date the Common Stock is not a Listed Security, which are granted or issued to persons resident in California as of the date of grant or issuance, as applicable (each such person, a “California recipient”):

1. In the case of an Option, whether an Incentive Stock Option or a Nonqualified Stock Option, that is granted to a California Recipient who, at the time of the grant of such Option, owns stock representing more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value on the grant date.

2. In the case of a Nonqualified Stock Option that is granted to any other California Recipient, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the grant date.

3. In the case of a Stock Purchase Right granted to a California Recipient, the purchase price applicable to stock purchased under such Stock Award shall not be less than 85% of the Fair Market Value of the Shares as of the Grant Date, or, in the case of a person owning stock representing more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the price shall not be less than 100% of the Fair Market Value of the Shares as of the grant date.

4. With respect to an Option or Stock Purchase Right issued to any California Recipient who is not an Officer, Director or Consultant, such Option or Stock Purchase Right shall become exercisable, or any repurchase option in favor of the Company shall lapse, at the rate of at least 20% per year over five years from the grant date.

5. The following rules shall apply to an Option issued to any California Recipient or to stock issued to a California Recipient upon exercise of a Stock Purchase Right, in the event of termination of the California Recipient’s employment or services with the Company:

(a) If such termination was for reasons other than death or disability, the California Recipient shall have at least 30 days after the date of such termination (but in no event later than the expiration of the term of such Option established by the Plan Administrator as of the grant date) to exercise such Option.

(b) If such termination was on account of the death or disability of the California Recipient, the holder of the Option may, but only within six months from the date of such termination (but in no event later than the expiration date of the term of such Option established by the Plan Administrator as of the grant date), exercise the Option to the extent the California Recipient was otherwise entitled to exercise it at the date of such termination. To the extent that the California Recipient was not entitled to exercise the Option at the date of termination, or if the holder does not exercise such Option to the extent so entitled within six months from the date of termination, the Option shall terminate and the Common Stock underlying the unexercised portion of the Option shall revert to the Plan.

6. The Company shall provide financial statements at least annually to each California Recipient during the period such person has one or more Options or Stock Awards outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such individual owns such Shares. The Company shall not be required to provide such information if the issuance of awards under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information.

7. Unless defined below or otherwise in this Attachment, Capitalized terms shall have the meanings set forth in the Plan. For purposes of this Attachment, “Officer” means a person who is an officer of the Company within the meaning of Section 16(a) of the Exchange Act and the rules and regulations promulgated thereunder.

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EX-10.3

EXHIBIT 10.3

ALDER BIOPHARMACEUTICALS, INC.

2005 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

«Optionee» (“Optionee”)

«Address»

Dear Optionee:

You have been granted an option to purchase Common Stock of Alder Biopharmaceuticals, Inc. (the “Company”) as follows:

Board Approval Date:	«BoardApprovalDate»
Date of Grant (Later of Board Approval Date or Commencement of Employment/Consulting):	«GrantDate»
Exercise Price per Share:	«ExercisePrice»
Total Number of Shares Granted:	«NoofShres»
Type of Option:	«OpType»
Expiration Date:	«ExpDate»
Vesting Commencement Date:	«VestComDate»
Vesting/Exercise Schedule:	So long as your employment or consulting relationship with the Company continues, the Shares underlying this Option shall vest and become exercisable in accordance with the following schedule: «VestSchedule»
Termination Period:	This Option may be exercised for 90 days after termination of employment or consulting relationship except as set out in Section 5 of the Stock Option Agreement (but in no event later than the Expiration Date). Optionee is responsible for keeping track of these exercise periods following termination for any reason of his or her service relationship with the Company. The Company will not provide further notice of such periods.
Transferability:	This Option may not be transferred.

By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the Alder Biopharmaceuticals, Inc. 2005 Stock Plan and the Stock Option Agreement, both of which are attached and made a part of this document.

Optionee acknowledges receipt of a copy of the 2005 Stock Plan and represents that he or she is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as set forth herein and in the 2005 Stock Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan Administrator regarding any questions relating to the Option. In the event of a conflict between the terms and provisions of the 2005 Stock Plan and the terms and provisions of the Notice of Stock Option Grant and the Stock Option Agreement, the 2005 Stock Plan terms and provisions shall prevail. The Option, including the 2005 Stock Plan, constitutes the entire agreement between Optionee and the Company on the subject matter hereof and supersedes all proposals, written or oral, and all other communications between the parties relating to such subject matter.

In addition, you agree and acknowledge that your rights to any Shares underlying the Option will be earned only as you provide services to the Company over time, that the grant of the Option is not as consideration for services you rendered to the Company prior to your Vesting Commencement Date, and that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship with the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that relationship at any time, for any reason, with or without cause.

This Notice of Stock Option Grant may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one document.

«Optionee»	ALDER BIOPHARMACEUTICALS, INC.
	By:
	Title:

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ALDER BIOPHARMACEUTICALS, INC.

2005 STOCK PLAN

STOCK OPTION AGREEMENT

1. Grant of Option. Alder Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants to Optionee, an option (the “Option”) to purchase the total number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and provisions of the 2005 Stock Plan (the “Plan”) adopted by the Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

2. Designation of Option. This Option is intended to be an Incentive Stock Option as defined in Section 422 of the Code only to the extent so designated in the Notice, and to the extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock Option, it is intended to be a Nonstatutory Stock Option.

Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the Company or any Parent or Subsidiary, including under other plans of the Company) that first become exercisable in any calendar year have an aggregate fair market value (determined for each Share as of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory Stock Option, in accordance with Section 5(c) of the Plan.

3. Exercise of Option. This Option shall be exercisable during its term in accordance with the Vesting/Exercise Schedule set out in the Notice and with the provisions of Section 10 of the Plan as follows:

(a) Right to Exercise.

(i) This Option may not be exercised for a fraction of a share.

(ii) In the event of Optionee’s death, disability or other termination of employment, the exercisability of the Option is governed by Section 5 below, subject to the limitations contained in this Section 3.

(iii) In no event may this Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(b) Method of Exercise.

(i) This Option shall be exercisable by execution and delivery of the Exercise Notice and Restricted Stock Purchase Agreement attached hereto as Exhibit A (the “Exercise Agreement”) or of any other form of written notice approved for such purpose by the Company which shall state Optionee’s election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such means as are determined by the Plan Administrator in its discretion to constitute adequate delivery. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

(ii) As a condition to the exercise of this Option and as further set forth in Section 11 of the Plan, Optionee agrees to make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the vesting or exercise of the Option, or disposition of Shares, whether by withholding, direct payment to the Company, or otherwise.

(iii) The Company is not obligated, and will have no liability for failure, to issue or deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 221 of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such Shares.

4. Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination of the following, at the election of Optionee:

(a) cash or check;

(b) cancellation of indebtedness;

(c) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being exercised. In the case of shares acquired directly or indirectly from the Company, such shares must have been owned by Optionee for more than six (6) months on the date of surrender (or such other period of time as is necessary to avoid the Company’s incurring adverse accounting charges); or

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(d) following the date, if any, upon which the Common Stock is a Listed Security, and if the Company is at such time permitting “same day sale” cashless brokered exercises, delivery of a properly executed exercise notice together with irrevocable instructions to a broker participating in such cashless brokered exercise program to deliver promptly to the Company the amount required to pay the exercise price (and applicable withholding taxes).

5. Termination of Relationship. Following the date of termination of Optionee’s Continuous Service Status for any reason (the “Termination Date”), Optionee may exercise the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this Option within the Termination Period set forth in the Notice or the termination periods set forth below, the Option shall terminate in its entirety. In no event, may any Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(a) Termination. In the event of termination of Optionee’s Continuous Service Status other than as a result of Optionee’s disability or death, Optionee may, to the extent Optionee is vested in the Option Shares at the date of such termination (the “Termination Date”), exercise this Option during the Termination Period set forth in the Notice.

(b) Other Terminations. In connection with any termination other than a termination covered by Section 5(a), «Optionee» may exercise the Option only as described below:

(i) Termination upon Disability of Optionee. In the event of termination of Optionee’s Continuous Service Status as a result of Optionee’s disability, Optionee may, but only within twelve months from the Termination Date, exercise this Option to the extent Optionee was vested in the Option Shares as of such Termination Date.

(ii) Death of Optionee. In the event of the death of Optionee (a) during the term of this Option and while an Employee or Consultant of the Company and having been in Continuous Service Status since the date of grant of the Option, or (b) within thirty (30) days after Optionee’s Termination Date, the Option may be exercised at any time within twelve months following the date of death by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent Optionee was vested in the Option as of the Termination Date.

6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him or her. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

7. Tax Consequences. Below is a brief summary as of the date of this Option of certain of the federal tax consequences of exercise of this Option and disposition of the Shares under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

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(a) Incentive Stock Option.

(i) Tax Treatment upon Exercise and Sale of Shares. If this Option qualifies as an Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax for federal tax purposes and may subject Optionee to the alternative minimum tax in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares.

(ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if «Optionee» sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee.

(b) Nonstatutory Stock Option. If this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) income tax liability upon the exercise of the Option. Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. If Shares issued upon exercise of a Nonstatutory Stock Option are held for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

8. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

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EXHIBIT A

ALDER BIOPHARMACEUTICALS, INC.

2005 STOCK PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of             , by and between Alder Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and «Optionee» (“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the 2005 Stock Plan.

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his or her option to purchase             shares of the Common Stock (the “Shares”) of the Company under and pursuant to the Company’s 2005 Stock Plan (the “Plan”) and the Stock Option Agreement granted             (the “Option Agreement”). The purchase price for the Shares shall be $            per Share for a total purchase price of $            . The term “Shares” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option Agreement. On such date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

3. Limitations on Transfer. In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(a) (the “Right of First Refusal”).

(i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(iv) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 60 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(vi) Exception for Certain Family Transfers. Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section 3(a). “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

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(b) Involuntary Transfer.

(i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time after the date of this Agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer. With respect to any stock to be transferred pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of the Company that will reflect the current value of the stock in terms of present earnings and future prospects of the Company. The Company shall notify Purchaser or his or her executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the valuation determined by an independent appraiser to be mutually agreed upon by the Company and the Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(c) Assignment. The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any shareholder or shareholders of the Company or other persons or organizations.

(e) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are satisfied.

(f) Termination of Rights. The right of first refusal granted the Company by Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”). Upon termination of the right of first refusal described in Section 3(a) above, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.

4. Investment and Taxation Representations. In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any person or entity.

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(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities. Purchaser understands that the certificate(s) evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he or she will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things, that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after the holder of the Shares has held the Shares for certain specified time periods, and under certain circumstances, that resales of securities be limited in volume and take place only pursuant to brokered transactions. Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth in paragraph (e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

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5. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

6. No Employment Rights. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

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8. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Washington, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

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(h) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

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The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of the date first set forth above.

COMPANY:

ALDER BIOPHARMACEUTICALS, INC.

By:

Name:

Title:

PURCHASER:

(Signature)

Address:

I,             , spouse of             , have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or other such interest shall hereby by similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

Spouse of

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EX-10.7

EXHIBIT 10.7

ALDER BIOPHARMACEUTICALS, INC.

EXECUTIVE CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

Section 1. INTRODUCTION.

The Alder Biopharmaceuticals, Inc. Executive Change in Control Severance Benefit Plan (the “Plan”) was established effective June 13, 2012. The purpose of the Plan is to provide for the payment of severance benefits to certain eligible executive employees of Alder Biopharmaceuticals, Inc. (the “Company”) in the event that such persons become subject to involuntary or constructive employment terminations in connection with an acquisition of the Company. This Plan document also is the Summary Plan Description for the Plan.

For purposes of the Plan, the following terms are defined as follows:

(a) “Affiliate” means any corporation (other than the Company) in an “unbroken chain of corporations” beginning with the Company, if each of the corporations other then the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

(b) “Base Salary” means base pay (excluding incentive pay, premium pay, commissions, overtime, bonuses and other forms of variable compensation).

(c) “Board” means the Board of Directors of the Company.

(d) “Cause” shall include, but not be limited to: (i) employee’s continued failure, in the reasonable opinion of the Board, to perform one or more assigned duties or responsibilities to the Company, such failure being evidenced by a written report submitted on behalf of the Company to the Board so indicating failure and including a remedy or remedies reasonably satisfactory to the Board for correcting the asserted failure(s); (ii) failure to follow the lawful directives of employee’s manager(s), such failure being evidenced by a written report submitted by such manager(s) to the Board so indicating failure and including a remedy or remedies reasonably satisfactory to the Board; (iii) material violation of any Company policy, as evidenced by employee’s signature on a then-current copy of the Company Policy Handbook; (iv) commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to the Company; (v) unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom employee owes an obligation of nondisclosure as a result of the relationship with the Company; (vi) material breach by employee of any obligations under any written agreement or covenant with the Company; or (vii) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the Board approve as the basis for termination of employment.

(e) “Change in Control” means a sale of all or substantially all of the Company’s assets, a merger or other reorganization in which the Company is not the surviving entity or pursuant to which the shareholders of the Company immediately prior to the transaction own less than fifty percent (50%) of the combined voting power of the Company following the transaction, or the acquisition by one person or entity of more than fifty percent (50%) of the voting power of the Company in a single transaction or series of related transactions; provided that none of the following shall be considered a Change of Control transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Company or (ii) an equity financing in which the Company is the surviving corporation.

(f) “Code” means the Internal Revenue Code of 1986, as amended.

(g) “Company” means Alder Biopharmaceuticals, Inc. or, following a Change in Control, the surviving entity resulting from such event.

(h) “Covered Period” means the period commencing thirty (30) days prior to a Change in Control and ending twelve (12) months following a Change in Control.

(i) “Covered Termination” means an Involuntary Termination that occurs within the Covered Period. For such purposes, if the events giving rise to an employee’s right to resign for Good Reason arise within the Covered Period, and the employee’s resignation occurs not later than thirty (30) days after the expiration of the Cure Period (as defined below), such termination shall be a Covered Termination.

(j) “Involuntary Termination” means a termination of employment that is due to: (1) a termination by the Company without Cause or (2) an employee’s resignation for Good Reason.

(k) “Eligible Employee” means an employee that has been selected to participate in the Plan and meets the requirements to be eligible to receive Plan benefits as set forth in Section 2.

(l) “Good Reason” for an employee’s resignation means resignation within thirty (30) days following the occurrence of one of the following events without employee’s consent: (1) a material reduction by the Company in the employee’s Base Salary as in effect immediately prior to such reduction; (2) a material adverse change in employee’s position causing such position to be of materially reduced status or responsibility; or (3) relocation of employee’s assigned work site more than fifty (50) miles from employee’s work site immediately prior to such relocation; provided, however, that in each case above, in order for the employee’s resignation to be deemed to have been for Good Reason, the employee must first give the Company written notice of the action or omission giving rise to “Good Reason” within thirty (30) days after the first occurrence thereof; the Company must fail to reasonably cure such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and the employee’s must resignation must be effective not later than thirty (30) days after the expiration of such Cure Period.

Section 2. ELIGIBILITY FOR BENEFITS.

(a) Eligible Employee. A person is eligible to participate in the Plan if (i) the Board has designated such person as eligible to participate in the Plan by providing such person with a Participation Agreement; and (ii) such person’s employment with the Company terminates due to a Covered Termination, and (iii) such person meets the other Plan eligibility requirements set forth in this Section 2. The determination of whether an employee is an Eligible Employee shall be made by the Company, in its sole discretion, and such determination shall be binding and conclusive on all persons.

(b) Release Requirement. In order to be eligible to receive benefits under the Plan, the employee also must execute a general waiver and release in a form reasonably acceptable to the Company (the “Release”), within the applicable time period set forth therein, but in no event more than fifty (50) days following the date of termination, and such Release must become effective in accordance with its terms.

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(c) Exceptions to Benefit Entitlement. An employee who otherwise is an Eligible Employee, will not receive benefits under the Plan (or will receive reduced benefits under the Plan) in the following circumstances, as determined by the Company in its sole discretion:

(1) The employee has executed an individually negotiated employment contract or agreement with the Company relating to severance benefits that is in effect on his or her termination date, in which case such employee’s severance benefit, if any, shall be governed by the terms of such individually negotiated employment contract or agreement and shall be governed by this Plan to the extent that the reduction pursuant to Section 3(c) below does not entirely eliminate benefits under this Plan.

(2) The employee voluntarily terminates employment with the Company, or terminates employment due to the employee’s death or disability. Voluntary terminations include, but are not limited to, resignation, retirement or failure to return from a leave of absence on the scheduled date.

(3) The employee voluntarily terminates employment with the Company in order to accept employment with another entity that is wholly or partly owned (directly or indirectly) by the Company or an Affiliate.

(4) The employee is offered immediate reemployment by a successor to the Company or an Affiliate or by a purchaser of the Company’s assets, as the case may be, following a change in ownership of the Company or a sale of substantially all of the assets of a division or business unit of the Company. For purposes of the foregoing, “immediate reemployment” means that the employee’s employment with the successor to the Company or an Affiliate or the purchaser of its assets, as the case may be, results in uninterrupted employment such that the employee does not incur a lapse in pay as a result of the change in ownership of the Company or the sale of its assets.

Section 3. AMOUNT OF BENEFIT.

(a) Severance Benefit. Benefits under the Plan shall be provided to an Eligible Employee as set forth in the Participation Agreement.

(b) Additional Benefits. Notwithstanding the foregoing, the Company may, in its sole discretion, provide benefits to employees who are not Eligible Employees (“Non-Eligible Employees”) chosen by the Company, in its sole discretion, and the provision of any such benefits to a Non-Eligible Employee shall in no way obligate the Company to provide such benefits to any other Non-Eligible Employee, even if similarly situated. If benefits under the Plan are provided to a Non-Eligible Employee, references in the Plan to “Eligible Employee” (with the exception of Section 3(a)) shall be deemed to refer to such Non-Eligible Employee.

(c) Certain Reductions. The Company, in its sole discretion, shall have the authority to reduce an Eligible Employee’s severance benefits, in whole or in part, by any other severance benefits, pay and benefits provided during a period following written notice of a plant closing or mass layoff, pay and benefits in lieu of such notice, or other similar benefits payable to the Eligible Employee by the Company or an Affiliate that become payable in connection with the Eligible Employee’s termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act (WARN Act), or any other similar state law, (ii) a written employment or severance agreement with the Company, or (iii) any Company policy or practice providing for the Eligible Employee to remain on the payroll for a limited period of time after being given notice of the termination of the Eligible Employee’s employment, and the Plan Administrator shall so

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construe and implement the terms of the Plan. Any such reductions that the Company determines to make pursuant to this Section 3(c) shall be made such that any benefit under the Plan shall be reduced solely by any similar type of benefit under such legal requirement, agreement, policy or practice (i.e., any cash severance benefits under the Plan shall be reduced solely by any cash payments or severance benefits under such legal requirement, agreement, policy or practice, and any continued insurance benefits under the Plan shall be reduced solely by any continued insurance benefits under such legal requirement, agreement, policy or practice). The Company’s decision to apply such reductions to the severance benefits of one Eligible Employee and the amount of such reductions shall in no way obligate the Company to apply the same reductions in the same amounts to the severance benefits of any other Eligible Employee, even if similarly situated. In the Company’s sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being re-characterized as payments pursuant to the Company’s statutory obligation.

Section 4. RETURN OF COMPANY PROPERTY.

An Eligible Employee will not be entitled to any severance benefit under the Plan unless and until the Eligible Employee returns all Company Property. For this purpose, “Company Property” means all Company documents (and all copies thereof) and other Company property which the Eligible Employee had in his or her possession at any time, including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, servers), credit cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part).

Section 5. TIME OF PAYMENT AND FORM OF BENEFIT.

The Participation Agreement shall specify the timing and form of cash severance payments under the Plan. All such payments under the Plan will be subject to applicable withholding for federal, state and local taxes. If an Eligible Employee is indebted to the Company on his or her termination date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness. All severance benefits provided under the Plan are intended to satisfy the requirements for an exemption from application of Section 409A of the Internal Revenue Code and any ambiguities herein shall be interpreted accordingly.

Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under the Plan that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with an Eligible Employee’s termination of employment unless and until the Eligible Employee has also incurred a “separation from service,” as such term is defined in Treasury Regulations Section 1.409A-1(h) (“Separation from Service”), unless the Company reasonably determines that such amounts may be provided to the Eligible Employee without causing the Eligible Employee to incur the adverse personal tax consequences under Section 409A.

It is intended that (i) each installment of any benefits payable under the Plan to an Eligible Employee be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i), (ii) all payments of any such benefits under the Plan satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations

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Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (iii) any such benefits consisting of COBRA premiums also satisfy, to the greatest extent possible, the exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v). However, if the Company determines that any such benefits payable under the Plan constitute “deferred compensation” under Section 409A and the Eligible Employee is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the imposition of the adverse personal tax consequences under Section 409A, (A) the timing of such benefit payments shall be delayed until the earlier of (1) the date that is six (6) months and one (1) day after the Eligible Employee’s Separation from Service and (2) the date of the Eligible Employee’s death (such applicable date, the “Delayed Initial Payment Date”), and (B) the Company shall (1) pay the Eligible Employee a lump sum amount equal to the sum of the benefit payments that the Eligible Employee would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the benefits had not been delayed pursuant to this paragraph and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.

In no event shall payment of any benefits under the Plan be made prior to an Eligible Employee’s termination date or prior to the effective date of the Release. If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, and the Eligible Employee’s Separation from Service occurs at a time during the calendar year when the Release could become effective in the calendar year following the calendar year in which the Eligible Employee’s Separation from Service occurs, then regardless of when the Release is returned to the Company and becomes effective, the Release will not be deemed effective any earlier than the latest permitted effective date (the “Release Deadline”). If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, then except to the extent that payments may be delayed until the Delayed Initial Payment Date pursuant to the preceding paragraph, on the first regular payroll date following the effective date of an Eligible Employee’s Release, the Company shall (1) pay the Eligible Employee a lump sum amount equal to the sum of the benefit payments that the Eligible Employee would otherwise have received through such payroll date but for the delay in payment related to the effectiveness of the Release and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.

All severance payments under the Plan shall be subject to applicable withholding for federal, state and local taxes. If an Eligible Employee is indebted to the Company at his or her termination date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness.

Section 6. RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

(a) Exclusive Discretion. The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons.

(b) Amendment or Termination. The Company reserves the right to amend or terminate this Plan at any time; provided, however, that any amendment or termination of the Plan will not be effective without the written consent of each employee that has an effective Participation Agreement and who is or may be adversely impacted by such amendment or termination.

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Section 7. NO IMPLIED EMPLOYMENT CONTRACT.

The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, which right is hereby reserved.

Section 8. ERISA; LEGAL CONSTRUCTION.

This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of Washington. A statement of ERISA rights, and other Plan information is set forth in Exhibit A attached hereto and incorporated by reference.

Section 9. EXECUTION.

To record the adoption of the Plan as set forth herein, effective as of June 13, 2012, Alder Biopharmaceuticals, Inc. has caused its duly authorized officer to execute the same this             day of                     , 2012.

ALDER BIOPHARMACEUTICALS, INC.
By:
	Randall C. Schatzman     Chief Executive Officer

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EXHIBIT A

MATTERS RELATED TO PLAN CLAIMS, ERISA RIGHTS AND OTHER INFORMATION

I. CLAIMS, INQUIRIES AND APPEALS.

(a) Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative). The Plan Administrator is:

Alder Biopharmaceuticals, Inc.

11804 North Creek Parkway South

Bothell, WA 98011

(b) Denial of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The notice of denial will be set forth in a manner designed to be understood by the applicant and will include the following:

(1) the specific reason or reasons for the denial;

(2) references to the specific Plan provisions upon which the denial is based;

(3) a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and

(4) an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described in Section 9(d) below.

This notice of denial will be given to the applicant within ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional ninety (90) days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.

This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application.

(c) Request for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within sixty (60) days after the application is denied. A request for a review shall be in writing and shall be addressed to:

Alder Biopharmaceuticals, Inc.

11804 North Creek Parkway South

Bothell, WA 98011

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A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The applicant (or his or her representative) shall have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records, and other information relating to his or her claim. The applicant (or his or her representative) shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim. The review shall take into account all comments, documents, records and other information submitted by the applicant (or his or her representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d) Decision on Review. The Plan Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the review. The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor. In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will set forth, in a manner calculated to be understood by the applicant, the following:

(1) the specific reason or reasons for the denial;

(2) references to the specific Plan provisions upon which the denial is based;

(3) a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim; and

(4) a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA.

(e) Rules and Procedures. The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

(f) Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the applicant (i) has submitted a written application for benefits in accordance with the procedures described by Section 9(a) above, (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section I(c) above, and (iv) has been notified that the Plan Administrator has denied the appeal. Notwithstanding the foregoing, if the Plan Administrator does not respond to a Eligible Employee’s claim or appeal within the relevant time limits specified in this Section 9, the Eligible Employee may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA.

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II. BASIS OF PAYMENTS TO AND FROM PLAN.

The Plan shall be unfunded, and all cash payments under the Plan shall be paid only from the general assets of the Company.

III. OTHER PLAN INFORMATION.

(a) Employer and Plan Identification Numbers. The Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal Revenue Service is                     . The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is             .

(b) Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year for the purpose of maintaining the Plan’s records is December 31.

(c) Agent for the Service of Legal Process. The agent for the service of legal process with respect to the Plan is:

Alder Biopharmaceuticals, Inc.

11804 North Creek Parkway South

Bothell, WA 98011

In addition, service of legal process may be made upon the Plan Administrator.

(d) Plan Sponsor and Administrator. The “Plan Sponsor” and the “Plan Administrator” of the Plan is:

Randall Schatzman

Alder Biopharmaceuticals, Inc.

11804 North Creek Parkway South

Bothell, WA 98011

The Plan Sponsor’s and Plan Administrator’s telephone number is (425) 205-2910. The Plan Administrator is the named fiduciary charged with the responsibility for administering the Plan.

IV. STATEMENT OF ERISA RIGHTS.

Eligible Employees in this Plan (which is a welfare benefit plan sponsored by Alder Biopharmaceuticals, Inc.) are entitled to certain rights and protections under ERISA. If you are an Eligible Employee, you are considered a participant in the Plan and, under ERISA, you are entitled to:

(e) Receive Information About Your Plan and Benefits

(1) Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series), if applicable, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration;

(2) Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series), if applicable, and an updated (as necessary) Summary Plan Description. The Administrator may make a reasonable charge for the copies; and

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(3) Receive a summary of the Plan’s annual financial report, if applicable. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

(f) Prudent Actions by Plan Fiduciaries. In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under ERISA.

(g) Enforce Your Rights. If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan, if applicable, and do not receive them within thirty (30) days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court.

If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

(h) Assistance with Your Questions. If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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EX-10.8

EXHIBIT 10.8

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

COLLABORATION AND LICENSE AGREEMENT

Among

ALDERBIO HOLDINGS LLC,

ALDER BIOPHARMACEUTICALS INC.

and

BRISTOL-MYERS SQUIBB COMPANY

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

TABLE OF CONTENTS

(CONTINUED)

		PAGE
1.	DEFINITIONS		1
2.	COLLABORATION; COMMITTEES		22
2.1	COLLABORATION OVERVIEW		22
2.2	JOINT EXECUTIVE COMMITTEE		23
2.3	JOINT DEVELOPMENT AND REGULATORY COMMITTEE		24
2.4	JOINT MANUFACTURING COMMITTEE		26
2.5	JOINT COMMERCIALIZATION COMMITTEE		27
2.6	COMMITTEE AND PARTY DECISION-MAKING; DISCONTINUATION		28
2.7	ALLIANCE MANAGERS		29
2.8	GENERAL COMMITTEE MEMBERSHIP AND PROCEDURES		29
2.9	COMPLIANCE WITH LAW		31
2.10	RECORDS		31
2.11	BACKUP PROGRAM		31
2.12	THIRD PARTY OBLIGATIONS		34
3.	DEVELOPMENT		34
3.1	BMS’ RESPONSIBILITY FOR DEVELOPMENT IN LICENSED FIELD		34
3.2	DEVELOPMENT IN LICENSED FIELD		34
3.3	TECHNOLOGY TRANSFER		35
3.4	RESPONSIBILITY FOR DEVELOPMENT IN CANCER FIELD		37
3.5	CONDUCT OF DEVELOPMENT IN CANCER FIELD		37
3.6	APPROVAL OF CLINICAL STUDIES FOR CO-DEVELOPED PRODUCT; SOLE-FUNDED CLINICAL STUDIES FOR CO-DEVELOPED PRODUCT		40
3.7	CANCER DEVELOPMENT COSTS		41
3.8	LIMITATIONS ON DEVELOPMENT		43
3.9	STANDARDS OF CONDUCT		43
3.10	LICENSED PRODUCT DEVELOPMENT EXPENSES		43
3.11	ADVERSE EVENT REPORTING		44
3.12	SUBCONTRACTORS		44
4.	REGULATORY MATTERS		44
4.1	REGULATORY MATTERS FOR LICENSED PRODUCT FOR LICENSED FIELD		44

-i-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

TABLE OF CONTENTS

(CONTINUED)

		PAGE
4.2	REGULATORY MATTERS FOR CANCER PRODUCT FOR CANCER FIELD WHERE BMS DOES NOT EXERCISE OPTION		45
4.3	REGULATORY MATTERS FOR CO-DEVELOPED PRODUCT		46
4.4	PRODUCT WITHDRAWALS AND RECALLS		47
4.5	NOTICE OF REGULATORY ACTION		48
4.6	ADVERSE EVENT REPORTING		48
4.7	SDEA; GLOBAL PHARMACOVIGILANCE DATABASE		48
5.	COMMERCIALIZATION		49
5.1	COMMERCIALIZATION OF LICENSED PRODUCT IN THE LICENSED FIELD		49
5.2	COMMERCIALIZATION OF CANCER PRODUCT IN THE CANCER FIELD		49
5.3	COMMERCIALIZATION PLANS		49
5.4	DILIGENT COMMERCIALIZATION		50
5.5	COMMERCIALIZATION REPORTS AND MEETINGS		50
5.6	STANDARDS OF CONDUCT		50
5.7	TRACKING OF SALES OF LICENSED PRODUCT AND CANCER PRODUCT		51
6.	MANUFACTURING		51
6.1	OVERVIEW		51
6.2	COORDINATION OF MANUFACTURING ACTIVITIES		52
6.3	TRANSFER OF MANUFACTURING TECHNOLOGY		52
6.4	CLINICAL SUPPLY OF LICENSED COMPOUND AND PRODUCT		56
6.5	THIRD PARTY MANUFACTURING		58
6.6	USE OF MANUFACTURING KNOW-HOW		59
6.7	JOINT MANUFACTURING PLAN		59
6.8	CHANGES TO PRODUCTION STRAINS		59
7.	OWNERSHIP OF TECHNOLOGY AND LICENSES		59
7.1	OWNERSHIP OF INFORMATION AND INVENTIONS		59
7.2	ASSIGNMENT OF EX-US CORE PATENTS		60
7.3	SECURITY INTEREST IN US CORE PATENTS		61
7.4	LICENSES TO BMS		62
7.5	SUBLICENSING BY BMS		63

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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7.6	RESTRICTION WITH RESPECT TO SELECTED BACKUP COMPOUNDS		63
7.7	ALDER RETAINED RIGHTS		63
7.8	LICENSES TO ALDER		63
7.9	BMS OPTION FOR CANCER FIELD		64
7.10	BMS RIGHTS OF NEGOTIATION FOR CANCER FIELD		65
7.11	LICENSE TO THIRD PARTY BY ALDER FOR CANCER FIELD		65
7.12	THIRD PARTY LICENSES		65
7.13	USE OF ALDER MATERIALS BY BMS		66
7.14	RESTRICTION ON LICENSING OF BMS IMPROVEMENT BY BMS		66
8.	PAYMENTS		67
8.1	UPFRONT PAYMENT AND OPTION PAYMENT		67
8.2	RECONCILIATION/REIMBURSEMENT OF CANCER DEVELOPMENT COSTS		67
8.3	DEVELOPMENT MILESTONE PAYMENTS FOR LICENSED PRODUCT IN THE LICENSED FIELD		67
8.4	DEVELOPMENT MILESTONE PAYMENTS FOR CANCER PRODUCT IN THE CANCER FIELD		69
8.5	SALES MILESTONE PAYMENTS		70
8.6	ROYALTY PAYMENTS TO ALDERHOLDINGS		71
8.7	ROYALTY TERM		73
8.8	ROYALTY PAYMENTS AND REPORTS		75
8.9	PAYMENT METHOD		75
8.10	TAXES. ALDERHOLDINGS WILL PAY ANY AND ALL TAXES LEVIED ON ACCOUNT OF ALL PAYMENTS IT RECEIVES UNDER THIS AGREEMENT		75
8.11	BLOCKED CURRENCY		75
8.12	ROYALTY ON SUBLICENSEE SALES		76
8.13	FOREIGN EXCHANGE		76
8.14	RECORDS		76
8.15	INSPECTION OF RECORDS		76
8.16	LATE PAYMENTS		76
8.17	PAYMENTS TO OR REPORTS BY AFFILIATES		76
8.18	EQUITY INVESTMENT OPTION		76
8.19	[***] SUBLICENSING REVENUES		77

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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9.	PATENT PROSECUTION AND ENFORCEMENT		78
9.1	PATENT CONTACTS		78
9.2	DISCLOSURE OF INVENTIONS		78
9.3	PROSECUTION OF PATENTS		78
9.4	INFRINGEMENT OF COLLABORATION PATENTS BY THIRD PARTIES		80
9.5	DEFENSE OF INFRINGEMENT ACTIONS		83
9.6	PERSONNEL OBLIGATIONS		83
9.7	FURTHER ACTIONS		84
10.	TRADEMARKS		84
10.1	LICENSED PRODUCT TRADEMARKS		84
10.2	CANCER PRODUCT TRADEMARKS		84
10.3	USE OF NAME		85
10.4	PATENT MARKING		85
10.5	FURTHER ACTIONS		85
10.6	ADVERTISING AND PROMOTIONAL MATERIALS		85
11.	EXCLUSIVITY		86
11.1	EXCLUSIVITY		86
12.	CONFIDENTIALITY		87
12.1	CONFIDENTIALITY		87
12.2	AUTHORIZED DISCLOSURE		88
12.3	PUBLICITY; TERMS OF AGREEMENT		88
12.4	PUBLICATIONS		89
12.5	PUBLICATION AND LISTING OF CLINICAL TRIALS AND COMPLIANCE WITH OTHER POLICIES, ORDERS AND AGREEMENTS		90
12.6	TERMINATION OF PRIOR CDA		90
13.	TERM AND TERMINATION		90
13.1	TERM		90
13.2	TERMINATION BY BMS AT WILL OR FOR SAFETY REASONS		91
13.3	TERMINATION BY EITHER PARTY FOR BREACH		92
13.4	TERMINATION BY ALDER FOR FAILURE OF BMS TO USE DILIGENT EFFORTS		94

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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13.5	EFFECTS OF TERMINATION OF THE AGREEMENT WITH RESPECT TO THE LICENSED FIELD		96
13.6	EFFECTS OF TERMINATION OF THE AGREEMENT WITH RESPECT TO THE CANCER FIELD		98
13.7	TERMINATION BY BMS FOR ALDER’S MATERIAL BREACH		99
13.8	TERMINATION AS TO ONE OR MORE REGIONS		100
13.9	ASSIGNMENT BACK TO ALDERHOLDINGS OF EX-US CORE PATENTS		100
13.10	EXCEPTION FOR TERMINATION FOR SAFETY REASONS		100
13.11	OTHER REMEDIES		101
13.12	SURVIVAL		101
13.13	EFFECT OF ALDER’S BREACH OF PAYMENT OBLIGATION FOR CANCER DEVELOPMENT COSTS		101
13.14	TERMINATION OF THE CANCER DEVELOPMENT PROGRAM		102
14.	REPRESENTATIONS AND WARRANTIES AND COVENANTS		102
14.1	MUTUAL REPRESENTATIONS AND WARRANTIES		102
14.2	REPRESENTATIONS AND WARRANTIES BY ALDER		103
14.3	REPRESENTATIONS AND WARRANTIES BY BMS		105
14.4	DISCLAIMER		105
14.5	NO OTHER REPRESENTATIONS OR WARRANTIES		105
15.	INDEMNIFICATION AND LIMITATION OF LIABILITY		105
15.1	INDEMNIFICATION BY ALDER		105
15.2	INDEMNIFICATION BY BMS		106
15.3	INDEMNIFICATION PROCEDURES		106
15.4	LIMITATION OF LIABILITY		107
15.5	COLLABORATION DISCLAIMER		107
15.6	LIABILITY IN CONNECTION WITH DEVELOPMENT OF CANCER PRODUCT		107
15.7	INSURANCE		107
16.	DISPUTE RESOLUTION		108
16.1	DISPUTE RESOLUTION.DISPUTES; RESOLUTION BY EXECUTIVE OFFICERS		108
16.2	ARBITRATION		109
16.3	EXPEDITED ARBITRATION		110

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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16.4	GOVERNING LAW		111
16.5	AWARD		111
16.6	COSTS		111
16.7	INJUNCTIVE RELIEF; REMEDY FOR BREACH OF EXCLUSIVITY		111
16.8	CONFIDENTIALITY		111
16.9	SURVIVABILITY		111
16.10	JURISDICTION		112
16.11	PATENT AND TRADEMARK DISPUTES		112
17.	MISCELLANEOUS		112
17.1	ENTIRE AGREEMENT; AMENDMENTS		112
17.2	EXPORT CONTROL		112
17.3	RIGHTS IN BANKRUPTCY		112
17.4	FORCE MAJEURE		113
17.5	NOTICES		113
17.6	INDEPENDENT CONTRACTORS		114
17.7	MAINTENANCE OF RECORDS		114
17.8	ASSIGNMENT		114
17.9	[***]		115
17.10	NON-SOLICITATION OF EMPLOYEES		115
17.11	FURTHER ACTIONS		115
17.12	COMPLIANCE WITH APPLICABLE LAW		115
17.13	SEVERABILITY		116
17.14	NO WAIVER		116
17.15	HSR FILING		116
17.16	INTERPRETATION		117
17.17	GUARANTEE OF PERFORMANCE BY ALDERBIO AND ALDERHOLDINGS		117
17.18	COUNTERPARTS		117

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

EXECUTION COPY

COLLABORATION AND LICENSE AGREEMENT

THIS COLLABORATION AND LICENSE AGREEMENT (the “Agreement”) is made and entered into as of November 6, 2009 (the “Signing Date”) by and among ALDERBIO HOLDINGS LLC (“AlderHoldings”), a Nevada limited liability company having its principal place of business at 101 Convention Center Drive, Suite 850, Las Vegas, Nevada 89109, ALDER BIOPHARMACEUTICALS INC., a Delaware corporation having its principal place of business at 11804 North Creek Parkway South, Bothell, Washington 98011 (“AlderBio”) and BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation having offices at 345 Park Avenue, New York, New York 10154 (“BMS”). AlderHoldings and AlderBio are referred to collectively as “Alder”. Alder and BMS are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

BMS is engaged in the research, development, manufacture and commercialization of human therapeutic products.

Alder is a biotechnology company that has technology and expertise relating to the discovery and development of certain therapeutic antibodies, including its product containing its proprietary antibody product candidate designated as ALD518, and which binds to the IL-6 target.

Alder is conducting human clinical trials with respect to such product containing ALD518, and has identified certain other back up antibodies which also bind to the IL-6 target.

BMS and Alder desire to enter into a collaboration for the continued development and, if successful, regulatory approval for and commercialization of products containing ALD518 and/or back up products thereto, in both the Licensed Field (as further defined below) and the Cancer Field (as defined below) all in accordance with the terms and conditions set forth herein below.

Now Therefore, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows.

1. DEFINITIONS

As used in this Agreement, the terms with initial letters capitalized, whether used in the singular or plural form, shall have the meanings set forth in this Article 1 or, if not listed below, the meaning designated in places throughout this Agreement.

1.1 “Acquiror” has the meaning set forth in Section 17.8.

1.2 “Adverse Event” means any untoward medical occurrence in a patient or human clinical investigation subject administered any Licensed Compound or Product, including occurrences which do not necessarily have a causal relationship with any Licensed Compound or Product.

1.3 “Adverse Impact” has the meaning set forth in Section 16.1.

1.4 “Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, or by contract or otherwise. For avoidance of doubt, AlderHoldings is an Affiliate of AlderBio, and AlderBio is an Affiliate of AlderHoldings.

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.5 “ALD518” means the Alder proprietary IL-6 Compound designated as “ALD518” and having the amino acid sequence set forth on Exhibit A, as well as any fragment, derivative or subunit thereof that is also an IL-6 Compound.

1.6 “ALD518 LF Product” means any Licensed Product containing ALD518.

1.7 “Alder ABS Technology” means Alder’s proprietary antibody identification process, as described in U.S. Patent Application Serial No. 11/802,235, for use in identifying potent and rare therapeutic antibodies directly from an immunized host using proprietary biological techniques, including any improvements thereto, where such process and techniques (and improvements thereto) apply generally to the identification of antibodies but not specifically to the identification of Licensed Compounds.

1.8 “Alder Background Technology” means, individually and collectively, Alder ABS Technology and Alder Mab Xpress Technology.

1.9 “Alder Cancer Supplier” has the meaning set forth in Section 6.4(c).

1.10 “Alder Cancer Territory” means (i) all countries of the world, in the case where BMS has not exercised the Option and (ii) in the case where BMS has exercised the Option, the U.S. plus any other country as to which BMS’ rights with respect to the Cancer Product have reverted to Alder pursuant to Section 11.1(c)(iii), or as to which the Agreement has been terminated, in accordance with Article 13.

1.11 “Alder Claims” has the meaning set forth in Section 15.2.

1.12 “Alder Collateral” has the meaning set forth in Section 7.3(a).

1.13 “Alder Damages” has the meaning set forth in Section 15.2.

1.14 “Alder Development Costs” has the meaning set forth in Section 8.1(c).

1.15 “Alder Event of Default” has the meaning set forth in Section 7.3(b).

1.16 “Alder Future Process Know-How” has the meaning set forth in Section 6.3(b)(ii).

1.17 “Alder Indemnitees” has the meaning set forth in Section 15.2.

1.18 “Alder Initial Payment” has the meaning set forth in Section 6.3(b)(iii).

1.19 “Alder Know-How” means all Information Controlled as of the Signing Date or thereafter during the Term by AlderHoldings and/or its Affiliate(s) and necessary or reasonably useful for the research, Development, manufacture, use, importation, exportation, sale or Commercialization of (a) Licensed Compounds and/or Licensed Products in the Licensed Field or (b) in the event BMS exercises the Option, any Cancer Product in the Cancer Field, but expressly excluding Information included in Alder Background Technology. Alder Know-How includes but is not limited to all chemical, structural, manufacturing process, biological, pharmacological, toxicological, clinical, assay and other methods of screening, structure activity relationship information or other information that relates to Licensed Compound or Licensed Product (including its composition, formulation, or method of use, manufacture, preparation or administration) and Controlled by AlderHoldings and/or its Affiliate(s), but is not Alder Background Technology. For clarity, the use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Party’s acquisition of AlderHoldings or any of its Affiliates, except as otherwise provided in Section 17.8. For additional clarity, Alder Know-How shall exclude rights under any Alder Patents. Notwithstanding the foregoing, Information licensed to AlderHoldings or any of its Affiliates by a Third Party pursuant to a license agreement entered into after the Effective Date shall not be Alder Know-How unless such Information is licensed pursuant to a Third Party License and meets the aforementioned criteria for Alder Know-How.

1.20 “Alder Mab Xpress^® Technology” means Alder’s proprietary yeast expression system that has the ability to make fully functional whole antibodies, including any improvements thereto, where such system (and improvements thereto) applies generally to the expression of antibodies but not specifically to the expression of Licensed Compounds.

1.21 “Alder Materials” means tangible materials that (a) are Controlled by AlderHoldings and/or its Affiliate(s), (b) are necessary or useful for the Development and/or Commercialization of (i) ALD518, ALD518 LF Product, a Selected LF Backup Compound and/or a Licensed Product containing a Selected LF Backup Compound or (ii) if BMS exercises the Option, Selected Cancer Backup Compound and/or Co-Developed Product, and (c) are not Bulk Substance, Licensed Compound or Product. Alder Materials shall include but not be limited to: (A) production strains and Master Cell Banks for ALD518 and Selected LF Backup Compounds and, if BMS exercises the Option, production strains and Master Cell Banks for Selected Cancer Backup Compounds, (B) a control antibody for ALD518 that provides a standard for testing manufactured Bulk Substance, (C) [***] that provides a standard for background protein expression, (D) [***] and (E) materials necessary or reasonably useful for performing an immunogenicity or host cell protein assay transferred by Alder to BMS. Other than the materials listed in the preceding sentence under clause (A) through (E), Alder Materials shall not include any of the following: plasmid constructs, vectors, [***], and any tangible material that incorporates or was created for use with the Alder ABS Technology.

1.22 “Alder Patents” means all Patents that are Controlled as of the Signing Date or thereafter during the Term by AlderHoldings and/or its Affiliate(s) and that claim any IL-6 Compound or any product comprising an IL-6 Compound (including in each case its composition, formulation, product by process, or method of use, manufacture, preparation or administration or that would otherwise be infringed, absent a license, by the Development, manufacture, use in the Licensed Field (or, if BMS exercises the Option, in the Cancer Field) or Commercialization of any Licensed Compound or Licensed Product (or, if BMS exercises the Option, Cancer Product)), but expressly excluding claims in Patents to the extent claiming Alder Background Technology. For clarity, the use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of AlderHoldings or any of its Affiliates except as otherwise provided in Section 17.8. Notwithstanding the foregoing, a Patent licensed to AlderHoldings or any of its Affiliates by a Third Party pursuant to a license agreement entered into after the Effective Date shall not be an Alder Patent unless such Patent is licensed pursuant to a Third Party License and meets the aforementioned criteria for an Alder Patent. As of the Signing Date, the Alder Patents include the Patents listed in Exhibit B.

1.23 “Alder Technology” means the Alder Patents and Alder Know-How.

1.24 “Alder Third Party Contractor Costs” has the meaning set forth in Section 6.3(b)(ii).

1.25 “Alliance Manager” has the meaning set forth in Section 2.7.

1.26 “[***]” means [***].

1.27 “[***]” means the [***]

by and between Alder and [***], effective [***], and any amendments thereto.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.28 “Applicable Law” means the applicable laws, rules and regulations that may be in effect from time to time in a country and that relate to a Party’s activities under this Agreement, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities.

1.29 “Approval” means, with respect to a Product in any regulatory jurisdiction, Regulatory Approval and, where applicable outside the U.S., receipt of pricing and reimbursement approvals. “Approved” as used with respect to a Product has the correlative meaning.

1.30 “Approved Study” has the meaning set forth in Section 3.5(a).

1.31 “Arbitrable Matter” means any dispute concerning the validity, interpretation or construction of, compliance with, or breach of (other than a breach of Sections 12.1, 12.2, 15.1, 15.2 and 15.3), this Agreement, including without limitation:

(i) any dispute with respect to whether either Party [***], pursuant to Section [***];

(ii) any dispute with respect to whether either Alder [***], pursuant to Section [***];

(iii) any dispute or determination regarding a possible [***] in accordance with Section [***];

(iv) any determination as to whether a product is [***] and/or whether [***]; and

(v) any determination as to whether [***];

provided, that Arbitrable Matters shall not include [***].

1.32 “Backup Compound” has the meaning set forth in Section 2.11(a).

1.33 “Backup Program” has the meaning set forth in Section 2.11.

1.34 “Bankrupt Party” has the meaning set forth in Section 17.3(a).

1.35 “Base Royalty Rate” has the meaning set forth in Section 8.6(b).

1.36 “Binding Agent” means any (a) (i) antibody, (ii) protein [***] (i), (ii) and (iii), whether [***] or (b) (x) [***] with respect to expression of one of the foregoing or (y) cells expressing or secreting one of the foregoing.

1.37 “Biologic” means a protein, peptide or nucleic acid, including without limitation a Binding Agent or any fragment, derivative or subunit thereof; provided that Biologic shall not include any [***] or any molecule having a molecular weight of less than [***].

1.38 “BLA” means a Biologics License Application, for which approval by the FDA is required to market a Product in the U.S.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.39 “BLA Approval” means the Approval of an BLA by the FDA for the applicable Product in the U.S.

1.40 “BLA Filing” means the acceptance by the FDA of the filing of an BLA for the applicable Product.

1.41 “BMS Claims” has the meaning set forth in Section 15.1.

1.42 “BMS Damages” has the meaning set forth in Section 15.1.

1.43 “BMS Future Process Know-How” has the meaning set forth in Section 6.3(b)(iii).

1.44 “BMS Improvement” means a Sole Invention (and any Patent claiming such Sole Invention) of BMS that is an improvement to the Alder ABS Technology and/or Alder Mab Xpress Technology provided or disclosed to BMS under the Agreement.

1.45 “BMS Indemnitees” has the meaning set forth in Section 15.1.

1.46 “BMS Initial Payment” has the meaning set forth in Section 6.3(b)(ii).

1.47 “BMS Know-How” means all Information Controlled as of the Effective Date or thereafter during the Term by BMS and/or its Affiliate(s) that is necessary or reasonably useful for the research, development, manufacture, use, importation or sale of Licensed Products or Cancer Products, to the extent such Information is disclosed or made available to Alder hereunder or otherwise used in the conduct of this Agreement. For clarity, the use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of BMS, except as provided in Section 17.8. For further clarity, BMS Know-How shall exclude rights under any BMS Patents and BMS’ interest in any Joint Patents.

1.48 “BMS Optimization Program” has the meaning set forth in Section 2.11(d).

1.49 “BMS Patents” means all patents and patent applications that are Controlled as of the Effective Date or thereafter during the Term by BMS and/or its Affiliate(s) that claim the composition of matter, manufacture or use of one or more Licensed Compounds, Licensed Products or Cancer Products or that would otherwise be infringed, absent a license, by the manufacture, use or sale of any Licensed Compound, Licensed Product or Cancer Product. For clarity, the use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of BMS, except as provided in Section 17.8. For further clarity, BMS Patents shall exclude BMS’ interest in any Joint Patents.

1.50 “BMS Technology” means the BMS Patents, BMS Know-How and BMS’ interest in Joint Patents and Joint Inventions. Upon any termination of this Agreement pursuant to Article 13, BMS Know-How included in the BMS Technology shall be limited to the extent that such BMS Know-How is then actually used or is reasonably expected to be used based on the then-current Licensed Field Development Plan or Cancer Development Plan as of the date of such termination, and BMS Patents included in BMS Technology shall be limited to claims under BMS Patents that are then being practiced or are reasonably expected to be practiced based on the then-current Licensed Field Development Plan or Cancer Development Plan as of the effective date of such termination, in each case in connection with the Development, manufacture, formulation or Commercialization of the terminated Product in the Territory.

1.51 “BMS Third Party Contractor Costs” has the meaning set forth in Section 6.3(b)(iii).

1.52 “[***] Sublicense Agreement” has the meaning set forth in Section 8.19.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.53 “[***] Sublicensing Revenues” has the meaning set forth in Section 8.19.

1.54 “Bulk Substance” means the bulk active Licensed Compound, manufactured in accordance with cGMP.

1.55 “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in New York, New York are required by Applicable Law to remain closed.

1.56 “Cancer Development Budget” means the budget associated with and included in the Cancer Development Plan for a Co-Developed Product, detailing the anticipated Cancer Development Costs for the applicable activities set forth in such Cancer Development Plan.

1.57 “Cancer Development Costs” means all Development costs [***] that are directly related and reasonably allocable to Development of Cancer Product [***] for the purposes of seeking Regulatory Approval of a Co-Developed Product [***] and incurred [***], and, to the extent meeting the foregoing criteria, including the following to the extent the activities described below were not previously conducted in connection with the Development of the Licensed Product:

(a) the FTE and direct out-of-pocket costs incurred in connection with the planning and conduct of Clinical Trials;

(b) [***];

(c) development of the manufacturing process for such Cancer Product and any components thereof ([***]), as well as, to the extent not included in the Manufacturing Cost of [***] Cancer Product used in Clinical Trials, [***], and [***] of permitted Third Party contract manufacturers;

(d) Manufacturing Costs for (i) Cancer Product for use in Clinical Trials and [***] in support thereof and (ii) the manufacture, purchase or packaging of comparators or placebo for use in Clinical Trials (with the manufacturing costs for comparators or placebo to be determined in the same manner as Manufacturing Costs are determined for such Cancer Product), as well as the direct costs and expenses of disposal of drugs and other supplies used in such Clinical Trials [***];

(e) [***] arising out of Development activities for the Cancer Product [***] and for which [***];

(f) recruitment initiatives for Clinical Trials; and

(g) conducting advisory board meetings or other consultant programs, the purpose of which is to obtain advice and feedback related to the Development of a Cancer Product [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

For clarity, Cancer Development Costs shall exclude: (i) [***] relating to Development activities for the purpose of [***] such Cancer Product [***] [***], which shall be borne by the Party incurring such expenses, (ii) any costs reasonably allocable to [***] of Cancer Product, (iii) income tax liabilities and corporate overhead costs of either Party, (iv) [***] and (v) any Excess Development Costs that are excluded as set forth in Section 3.7(f).

Cancer Development Costs shall not include any Development costs incurred by or for a Party [***] except for costs for the [***] in the case where the Parties [***].

1.58 “Cancer Development Plan” has the meaning set forth in Section 3.5(a).

1.59 “Cancer Development Program” means the Development program for Co-Developed Product [***] as described in the [***].

1.60 “Cancer Field” means the [***].

1.61 “Cancer Product” means a pharmaceutical product containing ALD518 or a Selected Cancer Backup Compound (alone or with any other pharmaceutically active ingredient which is not a Licensed Compound), in each case in form(s) intended for and developed [***] for use in the Cancer Field. For clarity, (i) Cancer Product shall in no event include a product intended for and/or developed for [***] and (ii) Cancer Product shall in no event include a product intended for and/or developed for use outside the Cancer Field.

1.62 “Cancer Product Mark” has the meaning set forth in Section 10.2(a).

1.63 “Cancer Supportive Care” means the [***] of (i) [***] and/or [***] in cancer patients or (ii) side effects that are associated generally with chemotherapy or other cancer therapies.

1.64 “Cancer Territory” means worldwide except for the United States, but excluding countries in which BMS’ right to the Cancer Product revert to Alder or in which the Agreement terminates in accordance with Article 13.

1.65 “Claim” has the meaning set forth in Section 15.3.

1.66 “Clinical Trial” means any human clinical trial of a Product.

1.67 “CMC” means chemistry, manufacturing and controls with respect to Licensed Compound and/or Product, including the chemistry, manufacturing and controls section of a Regulatory Material for the Product.

1.68 “Co-Developed Product” means any Cancer Product following the exercise of the Option by BMS.

1.69 “Collaboration” has the meaning set forth in Section 2.1.

1.70 “Collaboration Antibody” means ALD518, Selected LF Backup Compound and/or, as applicable if BMS exercises the Option, Selected Cancer Backup Compound.

1.71 “Collaboration Patents” means all Alder Patents, all BMS Patents and all Joint Patents to the extent not claiming any Alder Background Technology.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.72 “COM Patent” means the Alder Patent in the relevant country that contains a claim that specifically (i.e., not generically) covers ALD518 as a composition of matter and that corresponds to or claims priority to U.S. Patent Application No. [***] or international application [***].

1.73 “Combination Product” means a Product that (i) includes at least one additional active ingredient (whether coformulated or copackaged) which is not a Licensed Compound or (ii) is sold in a form that contains (or that is bundled with) a delivery device therefor. Pharmaceutical dosage form vehicles, adjuvants, and excipients shall not be deemed to be “active ingredients” or a “delivery device”, except in the case where such vehicle, adjuvant, or excipient is recognized by the FDA as an active ingredient in accordance with 21 CFR 210.3(b)(7).

1.74 “Commercialization” means the commercial manufacture, marketing, promotion, sale (and offer for sale or contract to sell), distribution or other commercial exploitation of Product in the Territory. Commercialization shall include commercial activities conducted in preparation for Product launch. “Commercialize” has a correlative meaning.

1.75 “Committee” means the Joint Executive Committee, Joint Development Committee, Joint Manufacturing Committee or Joint Commercialization Committee, or any other subcommittee established under Article 2, as applicable.

1.76 “Competing Product” means any product for use in the Licensed Field (and/or, in the case where BMS has exercised the Option, the Cancer Field) containing a Biologic that [***] and [***] to [***] and [***]. For clarity, the Biologic in such product may also [***] in addition to [***] and such additional [***] shall not prevent such product from being a Competing Product.

1.77 “Confidential Information” means, with respect to a Party, and subject to Section 12.1, all non-public Information of such Party that is disclosed to the other Party under this Agreement, which may include, without limitation, specifications, know-how, trade secrets, technical information, models, business information, inventions, discoveries, methods, procedures, formulae, protocols, techniques, data, and unpublished patent applications, whether disclosed in oral, written, graphic, or electronic form. All Information disclosed by a Party pursuant to the Prior CDA shall be deemed to be the Confidential Information of such Party pursuant to this Agreement (with the mutual understanding and agreement that any use or disclosure thereof that is authorized under Article 12 shall not be restricted by, or be deemed a violation of, such Prior CDA).

1.78 “Control” means, with respect to any material, Information, or intellectual property right, that a Party (a) owns such material, Information, or intellectual property right, or (b) has a license or right to use to such material, Information, or intellectual property right, in each case with the ability to grant to the other Party access, a right to use, or a license, or a sublicense (as applicable) to such material, Information, or intellectual property right on the terms and conditions set forth herein, without violating the terms of any agreement or other arrangement with any Third Party.

1.79 “Core Data Sheet” means a document setting forth material relating to safety, indications, dosing, pharmacology, and other information concerning a product, as such document is described in ICH guidance E2C Clinical Safety Data Management: Periodic Safety Update Reports for Marketed Drugs, November 1996 (published by the FDA in May 1997), as amended from time to time.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.80 “Core Patent” means (a) any Alder Patent that contains a Valid Claim specifically covering the composition or formulation or method of use in the Licensed Field of ALD518, ALD518 LF Product, Selected LF Backup Compound or Product containing a Selected LF Backup Compound and (b) in the case where BMS exercises the Option, any Alder Patent that contains a Valid Claim specifically covering the composition or formulation or method of use in the Cancer Field of Co-Developed Product and Licensed Compound contained in such Co-Developed Product. As of the Signing Date, the Core Patents include the Alder Patents listed in Exhibit B.

1.81 “Cover”, “Covered” or “Covering” means, with respect to a Patent, that, but for rights granted to a Person under such Patent, the practice by such Person of an invention claimed in such Patent would infringe a Valid Claim included in such Patent, or in the case of a Patent that is a patent application, would infringe a Valid Claim in such patent application if it were to issue as a patent.

1.82 “Development” means all activities that relate to (a) obtaining, maintaining or expanding Regulatory Approval of a Product and to support appropriate usage for such Product, for one or more indications, or (b) developing the process for the manufacture of clinical and commercial quantities of Product. This includes: (i) research, preclinical testing, toxicology, and Clinical Trials; (ii) preparation, submission, review, and development of data or information and Regulatory Materials for the purpose of submission to a governmental authority to obtain, maintain and/or expand Regulatory Approval of a Product (including contacts with Regulatory Authorities), and outside counsel regulatory legal services related thereto; and (iii) manufacturing process development and scale-up, bulk production and fill/finish work associated with the supply of Product for preclinical and clinical studies, and related quality assurance technical support activities; provided, however, that Development shall exclude Commercialization, the construction, validation and qualification of commercial manufacturing facilities, the building of commercial inventory of Product, and the negotiation of pricing/reimbursement for a Product. For clarity, Development shall include Phase 4 Clinical Trials that are required, requested or advised by a Regulatory Authority as a condition of, or in connection with, obtaining or maintaining an Approval (whether the trial is commenced prior to or after receipt of such Approval). “Develop” has a correlative meaning.

1.83 “Diligent Efforts” means, with respect to a Party’s obligations under this Agreement to research, Develop or Commercialize a Licensed Product or Cancer Product, the carrying out of such obligations or tasks as an active and ongoing program with a level of effort and resources consistent with the commercially reasonable practices normally devoted by BMS (in the case of BMS) or a biotechnology company (in the case of AlderBio) in connection with the research, development, manufacture or commercialization of a similarly situated pharmaceutical compound or product owned by it or to which it has rights, which is at a similar stage of development or commercialization, using the efforts that BMS (in the case of BMS) or a biotechnology company (in the case of AlderBio) would reasonably devote to a compound or product of similar market potential, sales potential and strategic value, based on conditions then prevailing and taking into account, without limitation, issues of safety and efficacy, regulatory authority-approved labeling, product profile, the competitiveness of alternative products in the marketplace, the likely timing of the product’s entry into the market, the patent and other proprietary position, the likelihood of regulatory approval and other relevant scientific, technical and commercial factors. Diligent Efforts shall require a Party, at a minimum, to: (a) assign obligations for the research, Development and/or Commercialization of Licensed Product or Cancer Product to qualified employees, (b) set annual goals and objectives for carrying out such obligations and (c) allocate resources designed to meet such goals and objectives. Diligent Efforts shall be determined on a country-by-country basis.

1.84 “[***]” means [***].

1.85 “[***]” means the [***] by and between Alder and [***], effective [***], and any amendments thereto.

1.86 “Disclosing Party” has the meaning set forth in Section 12.1.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.87 “Discovery Backup Program” has the meaning set forth in Section 2.11(a).

1.88 “DMF” means a drug master file and all equivalents, and related proprietary dossiers, in any country or jurisdiction in the Territory (including without limitation any active substance master file in the EMEA) for the Bulk Substance submitted or to be submitted by a Party to Regulatory Authorities.

1.89 “Dollar” or “$” means the lawful currency of the United States.

1.90 “Effective Date” has the meaning set forth in Section 17.15.

1.91 “EMEA” means the European Regulatory Authority known as the European Medicines Agency and any successor agency thereto.

1.92 “End of Phase 2 Meeting” means the end-of-Phase 2 meeting with FDA as described in 21 CFR 312.47(b).

1.93 “Europe” means the countries comprising the European Union as it may be constituted from time to time, together with those additional countries comprising the European Economic Area as it may be constituted from time to time (as of the Signing Date, Iceland, Liechtenstein and Norway) and Switzerland.

1.94 “EU” or “European Union” means the European Union, as its membership may be altered from time to time, and any successor thereto, and which, as of the Effective Date, consists of Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, and that certain portion of Cyprus included in such organization.

1.95 “Europe Region” has the meaning set forth in Section 13.2(c).

1.96 “Excess Development Cost” has the meaning set forth in Section 3.7(f).

1.97 “Executive Officer” means, in the case of BMS, any senior executive who reports directly to the Chief Executive Officer of BMS, and in the case of Alder, AlderBio’s Chief Executive Officer.

1.98 “Existing IL-6 Compounds” has the meaning set forth in Section 2.11(a).

1.99 “Existing Process” has the meaning set forth in Section 6.3(a).

1.100 “Expert” means a mutually acceptable, disinterested, conflict-of-interest-free individual not affiliated with either Party or its Affiliates who, with respect to a dispute concerning a financial, commercial, scientific or regulatory matter possesses appropriate expertise to resolve such dispute. The Expert (or any of the Expert’s former employers) shall not be or have been at any time an Affiliate, employee, consultant (during the previous five years), officer or director of either Party or any of its Affiliates.

1.101 “Ex-US Core Patents” means those Core Patents that are not Joint Patents and that are issued or pending in any country or region other than the U.S.

1.102 “FDA” means the United States Food and Drug Administration or its successor.

1.103 “FD&C Act” or “Act” means the United States Federal Food, Drug and Cosmetic Act, as amended.

1.104 “Financial Contact” has the meaning set forth in Section 8.2.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.105 “First Cancer Indication” means, with respect to a particular milestone event triggering a milestone payment under Section 8.4, an indication in the Cancer Field for which such event occurs first among all indications in the Cancer Field.

1.106 “First Commercial Sale” means, with respect to a Product and country, the first sale to a Third Party of such Product in such country after Approval has been obtained in such country.

1.107 “FTE” means the equivalent of a full time individual’s work for a 12 month period (consisting of at least a total of [***] hours per year of dedicated effort). In the case that any personnel of a Party works partially on the Development of Cancer Product and partially on other work in a 12 month period, then the work to be attributed to such individual’s contribution to a FTE hereunder shall be equal to the percentage of such individual’s total work time in such 12 month period that such individual spent working on the Development of Cancer Product. No additional payment shall be made with respect to any person who works more than [***] hours per year, and any person who devotes less than [***] hours per year shall be treated as an FTE on a pro-rata basis, based upon the actual number of hours worked by such person on the Development of Cancer Product, divided by [***]. FTE efforts shall not include the work of general corporate or administrative personnel.

1.108 “FTE Rate” means (a) with respect to FTE personnel costs in connection with the Development of Cancer Product, an initial rate of [***] Dollars ([***]) per FTE per year and (b) with respect to FTE personnel costs in connection with a Backup Program, a BMS Optimization Program or Production Strain Work, an initial rate per FTE per year to be reasonably agreed to by the Parties at the time of commencement of such Backup Program, BMS Optimization Program or Production Strain Work (which rate shall be within the range that is customary in the biopharmaceutical industry for comparable work to be performed by one entity for another entity). [***].

1.109 “Future Process” has the meaning set forth in Section 6.3(b).

1.110 “GAAP” means generally accepted accounting principles of the United States consistently applied.

1.111 “Generic Product” means, with respect to a Licensed Product or a Co-Developed Product, any pharmaceutical product that (i) contains as an active ingredient an agent that is the same or substantially the same as the Licensed Compound contained in such Licensed Product or Co-Developed Product, (ii) obtained regulatory approval (for an indication for which the Licensed Product or Co-Developed Product, as applicable, obtained Regulatory Approval from the applicable Regulatory Authority) on an expedited or abbreviated basis in a manner that relied on or incorporated data submitted by BMS or any of its Affiliates or Sublicensees in connection with the Regulatory Approval for such Licensed Product or Co-Developed Product and (iii) is sold in the same country as such Licensed Product or Co-Developed Product by any Third Party that is not a Sublicensee of BMS or its Affiliates and did not purchase such product in a chain of distribution that included any of BMS or any of its Affiliates or its Sublicensees. Generic Product, with respect to a Licensed Product, shall also include any pharmaceutical product that (x) contains as an active ingredient an agent that is the same or substantially the same as the Licensed Compound contained in such Licensed Product, (y) obtained regulatory approval in the Cancer Field from the applicable Regulatory Authority on an expedited or abbreviated basis that relied on data submitted by Alder or any of its Affiliates or licensees in connection with the Regulatory Approval for such Cancer Product and (z) is sold and used off-label in the Licensed Field in the same country as such Licensed Product by any Third Party that is not a licensee of Alder or its Affiliates and did not purchase such product in a chain of distribution that included any of Alder or any of its Affiliates or its licensees.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.112 “cGMP” or “GMP” means current Good Manufacturing Practices as specified in the United States Code of Federal Regulations, MHLW regulations, ICH Guideline Q7A, or equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture.

1.113 “Governmental Authority” means any multi-national, federal, state, local, municipal or other government authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

1.114 “Grant Request” has the meaning set forth in Section 12.5(b).

1.115 “HSR Conditions” has the meaning set forth in Section 17.15.

1.116 “ICH” means International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use.

1.117 “IL-6” means the expression product of the human interleukin-6 gene (including any mutant or polymorphic forms thereof).

1.118 “IL-6 Compound” means any Binding Agent that was raised or engineered to bind to [***] directly and specifically and in a manner that interferes with the normal function [***], as applicable, and [***] that retains such characteristics.

1.119 “[***]” means the protein known, as of the Effective Date, as [***].

1.120 “IND” means (a) an Investigational New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA, or (b) the equivalent application to the applicable Regulatory Authority in any other regulatory jurisdiction, the filing of which is necessary to initiate or conduct clinical testing of a pharmaceutical product in humans in such jurisdiction.

1.121 “Indemnified Party” has the meaning set forth in Section 15.3.

1.122 “Indemnifying Party” has the meaning set forth in Section 15.3.

1.123 “Information” means any data, results, and information of any type whatsoever, in any tangible or intangible form, including, without limitation, know-how, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports, expertise, stability, technology, test data including pharmacological, biological, chemical, biochemical, toxicological, and clinical test data, analytical and quality control data, stability data, studies and procedures.

1.124 “Infringement” has the meaning set forth in Section 9.4(a).

1.125 “Initial Cancer Development Plan” means the Cancer Development Plan in effect from the Effective Date until its update in accordance with Section 3.5. A copy of the Initial Cancer Development Plan is attached hereto as Exhibit C.

1.126 “Initial Licensed Field Development Plan” means the Licensed Field Development Plan in effect from the Effective Date until its update in accordance with Section 3.2. A copy of the Initial Licensed Field Development Plan is attached hereto as Exhibit D.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.127 “Initiated” has the meaning set forth in Section 13.2(a) with respect to all uses of such term in Article 13; such definition is not applicable in any way to the term “Initiation” as used in Section 8.3 or 8.4.

1.128 “Inspected Party” has the meaning set forth in Section 8.15.

1.129 “Inspecting Party” has the meaning set forth in Section 8.15.

1.130 “JNDA” means a New Drug Application filed with the MHLW required for marketing approval for the applicable Product in Japan.

1.131 “JNDA Approval” means the Approval of a JNDA by the MHLW for the applicable Product in Japan.

1.132 “JNDA Filing” means the acceptance by the MHLW of the filing of a JNDA for the applicable Product in Japan.

1.133 “Joint Cancer Development Plan” means the Cancer Development Plan for the Co-Developed Product.

1.134 “Joint Commercialization Committee” or “JCC” means the committee formed by the Parties as described in Section 2.5(a).

1.135 “Joint Development and Regulatory Committee” or “JDC” means the committee formed by the Parties as described in Section 2.3(a).

1.136 “Joint Executive Committee” or “JEC” means the committee formed by the Parties as described in Section 2.2(a).

1.137 “Joint Inventions” has the meaning set forth in Section 7.1.

1.138 “Joint Manufacturing Plan” has the meaning set forth in Section 6.7.

1.139 “Joint Manufacturing Committee” or “JMC” means the committee formed by the Parties as described in Section 2.4(a).

1.140 “Joint Patent” means a Patent that claims a Joint Invention.

1.141 “License” means an agreement for (including in each case an option for) [***], Development or Commercialization of, or solely the Commercialization of, the Cancer Product in the Cancer Field in the [***], but [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.142 “Licensed Compound” means: (a) ALD518; (b) any Backup Compound discovered, identified or optimized under a Backup Program or BMS Optimization Program and selected by BMS as a Selected LF Backup Compound or by Alder as a Selected Cancer Backup Compound; and/or (c) any IL-6 Compound that is within the scope of a Valid Claim of any of the Alder Patents, Joint Patents and/or BMS Patents (to the extent such BMS Patents claim any Sole Invention).

1.143 “Licensed Field” means [***], including the [***] and/or [***], but excluding the Cancer Field.

1.144 “Licensed Field Development Plan” has the meaning set forth in Section 3.2(a).

1.145 “Licensed Product” means any pharmaceutical product containing a Licensed Compound other than a Selected Cancer Backup Compound (alone or with any other pharmaceutically active ingredient which is not a Licensed Compound), in all forms, presentations, formulations and dosage forms, in each case solely for use outside the Cancer Field. For clarity, Licensed Product shall in no event include a product intended for and/or developed for administration or use outside the Licensed Field.

1.146 “Licensed Territory” means all countries of the world.

1.147 “Litigable Matter” means any dispute between the Parties concerning the validity, scope, enforceability, inventorship, or ownership of intellectual property rights, or any breach or alleged breach by a Party of any of Sections 12.1, 12.2, 15.1, 15.2 and 15.3 by a Party.

1.148 “MAA” or “Marketing Authorization Application” means an application for Regulatory Approval for a Product in a country or region of the Territory.

1.149 “MAA Approval” shall be achieved upon receiving Approval for the applicable Product in a Major European Country.

1.150 “MAA Filing” means validation by the EMEA of the filing of a Marketing Authorization Application for the applicable Product under the centralized European procedure, as demonstrated by the start of the procedure under the timetable adopted by the Committee for Medicinal Products for Human Use (CHMP). If the centralized EMEA filing procedure is not used, MAA Filing will be achieved upon the first filing of an MAA for the applicable Product in any Major European Country.

1.151 “Major European Country” means [***].

1.152 “Major Market” means each of the [***].

1.153 “Managed Care Organizations” or “MCOs” means pharmacies, managed health care organizations, group purchasing organizations, large employers, long-term care organizations, formularies, insurers, government agencies and programs (e.g., Medicare and the VHA and other federal, state and local agencies), or similar organizations.

1.154 “Manufacturing Costs” means costs of manufacturing a Licensed Compound or Product, as applicable, that is supplied by or on behalf of a supplying Party to the other Party ([***]), which is either (a) manufactured and supplied by a Third Party for such supplying Party; or (b) manufactured directly by such supplying Party or its Affiliate; in each case to the extent such costs are reasonably allocable to the Licensed Compound or Product supplied ([***]), and [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

For costs under clause (a) above, Manufacturing Costs means: (i) the amount paid by a Party or its Affiliates to such a Third Party in connection with the manufacture and supply of such Licensed Compound or Product ([***]), plus (ii) [***].

For costs in clause (b) above, Manufacturing Costs means the standard cost of goods sold and product variances. For purposes of this definition, “standard costs of goods sold” include [***]. All components of Manufacturing Costs shall be allocated on a basis consistent with its customary cost accounting practices applied by the Party to the other products it produces, provided that with respect to [***], the allocation shall be made based on [***], and such allocation [***]. Costs that [***] shall not be included in the determination of Manufacturing Costs. [***].

1.155 “Master Cell Bank” means a validated master cell bank that (a) is supplied by Alder to BMS under this Agreement for the expression of ALD518 or a Selected LF Backup Compound (or, if BMS exercises the Option, a Selected Cancer Backup Compound) through the use of Alder Mab Xpress Technology or (b) results from BMS’ validation of a production strain for the expression of ALD518 or a Selected LF Backup Compound supplied by Alder to BMS (such production strain being developed by Alder through the use of Alder Mab Xpress Technology).

1.156 “Medical Education Activities” means, compliant with Applicable Law, activities designed to ensure or improve appropriate medical use of, conduct medical education of, or further research regarding, a Product sold in the Territory, including by way of example: (a) activities of Medical Liaisons; (b) grants to support continuing medical education, symposia, or third party research related to a Product in the Territory; (c) development, publication and dissemination of publications relating to a Product in the Territory, as well as medical information services provided in response to inquiries communicated via sales representatives or received by letter, phone call or email; and (d) conducting advisory board meetings, meetings with key opinion leaders or other programs, the purpose of which is to obtain advice and feedback related to the Development of, or medical activities concerning, a Product in the Territory.

1.157 “Medical Liaisons” means those health care professionals, in the United States, employed or engaged by a Party with sufficient health care experience (including at least a four-year degree and (i) clinical, residency or fellowship experience or (ii) other highly specialized training relevant to Medical Education

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Activities, including any such professional with a Ph.D. or Pharm.D. degree) to engage in in-depth dialogues with physicians regarding medical issues associated with a Product, and are not Sales Representatives or otherwise engaged in direct selling or promotion of a Product.

1.158 “MHLW” means the Japanese Ministry of Health, Labour and Welfare, or any successor agency thereto.

1.159 “Negligently Incurred Development Cost” has the meaning set forth in Section 3.7(f).

1.160 “Net Sales” means, with respect to any Product, the gross amount invoiced or otherwise billed by BMS, any Affiliate or Sublicensee for sales of such Product to a Third Party, less deductions for the following, to the extent included in such billing or otherwise actually allowed or incurred with respect to such sales:

(i) [***],

(ii) [***],

(iii) [***],

(iv) [***],

(v) [***], and

(vi) [***].

In the event that BMS, its Affiliates or Sublicensees make any adjustments to such deductions after the associated Net Sales have been reported pursuant to this Agreement, the adjustments shall be reported and reconciled with the next report and payment of any royalties due. Sales between BMS and its Affiliates and Sublicensees [***]. For clarity, sales by BMS to a Third Party distributor, wholesaler, group purchasing organization, pharmacy benefit manager, or retail chain customer shall be considered sales to a Third Party.

In the case of any Combination Product sold in the Licensed Territory, the Net Sales of such Combination Product for the purpose of calculating royalties owed under this Agreement for sales of such Product, shall be determined as follows: first, [***] and then such amount shall be [***], if sold separately, and [***] if sold separately. If either the Product or any other active pharmaceutical molecule or delivery device in the Combination Product is not sold separately, the adjustment to Net Sales shall be determined by [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

With respect to any sale of any Product in a given country for any substantial consideration other than monetary consideration on arm’s length terms (which has the effect of reducing the invoiced amount below what it would have been in the absence of such non-monetary consideration), for purposes of calculating the Net Sales under this Agreement, [***]; provided that, notwithstanding the foregoing, Net Sales shall not include [***].

Net Sales shall be determined in accordance with those generally accepted accounting principles (in accordance with GAAP) consistently employed by BMS, its Affiliate(s), and/or Sublicensees (as applicable) with respect to external reporting.

1.161 “New Indication Sole-Funded Study” has the meaning set forth in Section 3.6(e).

1.162 “New Material Data” has the meaning set forth in Section 7.10(c).

1.163 “Off-label Use of Cancer Product” has the meaning set forth in Section 5.7(a).

1.164 “Off-label Use of Licensed Product” has the meaning set forth in Section 5.7(a).

1.165 “Optimization Backup Program” has the meaning set forth in Section 2.11(a).

1.166 “Option” has the meaning set forth in Section 7.9.

1.167 “Other Alder Patents” has the meaning set forth in Section 9.3(b).

1.168 “Other Indication” means an indication for the prevention, treatment and/or control of a disease or condition in humans in the Licensed Field that is separate and distinct from rheumatoid arthritis (i.e., an indication separate and distinct from the RA Indication). Examples of the Other Indication include without limitation inflammatory bowel disease (includes both Crohn’s disease and ulcerative colitis), psoriasis, lupus and ankylosing spondylitis. For avoidance of doubt, for purposes of this definition, different stages of rheumatoid arthritis and psoriatic arthritis would not be considered to be indications “separate and distinct” from the RA Indication.

1.169 “Party Written Consent” has the meaning set forth in Section 2.6(c).

1.170 “Patent” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including adjustments, revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patents of addition to any of such foregoing patent applications and patents.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.171 “Patent Contact” has the meaning set forth in Section 9.1.

1.172 “Patent Prosecution Costs” means the direct out-of-pocket costs ([***]) recorded as an expense by a Party or any of its Affiliates (in accordance with its customary accounting practices) after the Effective Date and during the Term and pursuant to this Agreement, in connection with the preparation, filing, prosecution, maintenance and extension of Patents, including costs of Patent interference, appeal, opposition, reissue, reexamination, revocation or other administrative proceedings with respect to Patents and filing and registration fees.

1.173 “Person” means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture company, governmental authority, association or other entity.

1.174 “Phase 1 Clinical Trial” means a Clinical Trial of a Product on sufficient numbers of normal volunteers and/or patients that is designed to establish that such Product is safe for its intended use, can be delivered in a dose(s) that is therapeutically useful, and to support its continued testing in Phase 2 Clinical Trials.

1.175 “Phase 2 Clinical Trial” means a Phase 2a Clinical Trial or a Phase 2b Clinical Trial. For purposes of this Agreement, ‘initiation’ of a Phase 2 Clinical Trial for a Product means the first dosing of such Product in a human subject in a Phase 2 Clinical Trial.

1.176 “Phase 2a Clinical Trial” means a controlled Clinical Trial of a Product that utilizes the pharmacokinetic and pharmacodynamic information obtained from one or more previously conducted Phase 1 Clinical Trial(s) and/or other Phase 2a Clinical Trial(s) in order to confirm the optimal manner of use of such Product (dose and dose regimens) and to better determine safety and efficacy.

1.177 “Phase 2b Clinical Trial” means a Clinical Trial of a Product, designed to support and immediately precede the initiation of a Phase 3 Clinical Trial program without any further Phase 2 Clinical Trials, on sufficient numbers of patients that is designed to provide a preliminary determination of safety and efficacy of such Product in the target patient population over a range of doses and dose regimens. For purposes of this Agreement, ‘initiation’ of a Phase 2b Clinical Trial for a Product means the first dosing of such Product in a human subject in a Phase 2b Clinical Trial. For clarity, the Clinical Trial identified in Exhibit D as “Phase 2b Clinical Trial—(dose ranging MTX IR; [***]; SC)” is a Phase 2b Clinical Trial as defined herein.

1.178 “Phase 3 Clinical Trial” means a clinical trial of a Product on sufficient numbers of patients that is designed to establish that such Product is safe and efficacious for its intended use, and to define warnings, precautions and adverse reactions that are associated with such Product in the dosage range to be prescribed, and to support Regulatory Approval of such Product or label expansion of such Product. For purposes of this Agreement, ‘initiation’ of a Phase 3 Clinical Trial for a Product means the first dosing of such Product in a human subject in a Phase 3 Clinical Trial.

1.179 “Phase 4 Clinical Trial” means a Clinical Trial of a Product that (a) is not required for receipt of Approval for a country but which may be useful in providing additional drug profile data in support of such Approval (whether the trial is commenced prior to or after receipt of such Approval), or (b) is required, requested or advised by a Regulatory Authority as a condition of, or in connection with, obtaining or maintaining an Approval (whether the trial is commenced prior to or after receipt of such Approval). Phase 4 Clinical Trials may include, without limitation, trials or studies conducted in support of pricing/reimbursement for an Approval, epidemiological studies, modeling and pharmacoeconomic studies, post-marketing surveillance studies, investigator sponsored clinical trials and health economics studies.

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1.180 “Prior CDA” means the Mutual Nondisclosure Agreement entered into by BMS and Alder effective February 10, 2009.

1.181 “Product” means (i) as applied to BMS, Licensed Product for use in the Licensed Field and/or the Co-Developed Product for use in the Cancer Field and (ii) as applied to Alder, Cancer Product for use in the Cancer Field.

1.182 “Profit” has the meaning set forth in Section 5.7(a).

1.183 “Promotional Materials” means all sales representative training materials and all written, printed, graphic, electronic, audio or video matter, including, without limitation, journal advertisements, sales visual aids, leave items, formulary binders, reprints, direct mail, direct-to-consumer advertising, internet postings, and broadcast advertisements intended for use or used by either Party or its Affiliates or (sub)licensees in connection with any promotion of a Cancer Product.

1.184 “Proposed Study” has the meaning set forth in Section 3.6(a).

1.185 “Proposed Terms” has the meaning set forth in Section 16.2(b).

1.186 “Prosecuting Party” has the meaning set forth in Section 9.3(c).

1.187 “Publication” has the meaning set forth in Section 12.4.

1.188 “RA Indication” means an indication for the prevention, treatment and/or control of rheumatoid arthritis in humans.

1.189 “Receiving Party” has the meaning set forth in Section 12.1.

1.190 “Region” has the meaning set forth in Section 13.2(c).

1.191 “Regulatory Approval” means all approvals necessary for the manufacture, marketing, importation, exportation and sale of a Product for one or more indications and in a country or regulatory jurisdiction, which may include, without limitation, satisfaction of all applicable regulatory and notification requirements, but which shall exclude any pricing and reimbursement approvals.

1.192 “Regulatory Authority” means, in a particular country or regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval and/or, to the extent required in such country or regulatory jurisdiction, pricing or reimbursement approval of a Product in such country or regulatory jurisdiction, including without limitation the FDA, the EMEA, the European Commission and MHLW, and in each case including any successor thereto.

1.193 “Regulatory Expenses” means, with respect to Licensed Compound or Product, applicable FTE costs and direct out-of-pocket costs (including filing, user, maintenance and other fees incurred to Regulatory Authorities) that are incurred by a Party or any of its Affiliates on or after the Effective Date and during the Term that are directly attributable or reasonably allocable to the preparation of regulatory submissions for, and the obtaining and maintaining of Approval in any country in the Licensed Territory, compliance with Approvals and requirements of such Regulatory Authorities (including post-Approval requirements), Adverse Event recordation and reporting, regulatory affairs activities, and recalls and withdrawals of any Product.

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1.194 “Regulatory Materials” means regulatory applications, submissions, dossiers, notifications, registrations, Regulatory Approvals and/or other filings made to or with, or other approvals granted by, a Regulatory Authority that are necessary or reasonably desirable in order to Develop, manufacture, market, sell or otherwise Commercialize a Product in a particular country or regulatory jurisdiction. Regulatory Materials include, without limitation, INDs, MAAs and BLAs.

1.195 “Rejected Study” has the meaning set forth in Section 3.6(b).

1.196 “Research Costs” has the meaning set forth in Section 2.11(b).

1.197 “Research Plan” has the meaning set forth in Section 2.11(b).

1.198 “Restricted Product” has the meaning set forth in Section 11.1(c).

1.199 “Royalty Term” has the meaning set forth in Section 8.7.

1.200 “Safety Data Exchange Agreement” or “SDEA” has the meaning set forth in Section 4.7.

1.201 “Safety Reason” has the meaning set forth in Section 13.10.

1.202 “Samples” means Product packaged and distributed as a complimentary trial for use with patients in the United States and in accordance with the Prescription Drug Marketing Act of 1987, as amended, and free goods provided for this purpose through coupons or other mechanisms.

1.203 “[***]” means [***].

1.204 “[***]” means that certain [***] between Alder and [***] having an effective date of [***] concerning the manufacture and supply of ALD518 by [***] for Alder, and any amendments thereto, and any other related agreement between Alder and [***] concerning the manufacture and supply of ALD518 by [***] for Alder.

1.205 “SEC” means the U.S. Securities and Exchange Commission.

1.206 “Second Cancer Indication” means an indication in the Cancer Field that is separate and distinct from the First Cancer Indication. For purposes of this definition, (i) a Cancer Supportive Care indication and the treatment of a tumor type shall be considered “separate and distinct” from one another, (ii) different Cancer Supportive Care indications (for example, cancer associated cachexia and cancer associated anemia) shall not be considered “separate and distinct” from one another, (iii) treatment of one tumor type (for example, breast or colon or brain) shall be considered “separate and distinct” from treatment of another tumor type and (iv) different stages or subtypes of a tumor type (such as stages or subtypes of colon cancer) or line of treatment of a tumor shall not be considered “separate and distinct”.

1.207 “Selected Cancer Backup Compound” means a Backup Compound which is not a Selected LF Backup Compound, but which is selected by Alder in accordance with Section 2.11(c) for the generation of a yeast production strain, for use in manufacturing sufficient quantities of such Backup Compound for use in GLP toxicology studies.

1.208 “Selected LF Backup Compound” means a Backup Compound which is selected by BMS in accordance with Section 2.11(c) for the generation of a yeast production strain (by Alder through use of the Alder Mab Xpress^® Technology), for use in manufacturing sufficient quantities of such Backup Compound for use in GLP toxicology studies.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1.209 “Shared Trademark Costs” has the meaning set forth in Section 10.2(b).

1.210 “Sole-Funded Study” has the meaning set forth in Section 3.6(d).

1.211 “Sole Inventions” has the meaning set forth in Section 7.1.

1.212 “Study Information” has the meaning set forth in Section 3.6(a).

1.213 “Sublicensee” means any Third Party granted a sublicense by BMS to the rights licensed to BMS under Section 7.4 or 7.9 hereof, but shall not include any wholesaler or distributor based on a wholesaler or distributor arrangement for the sale of Product.

1.214 “Subsequent Indication” means the prevention, treatment and/or control of a disease or condition in humans in the Licensed Field that is separate and distinct from both the RA Indication and the Other Indication for which the applicable milestone event was previously achieved. For example, inflammatory bowel disease (includes both Crohn’s disease and ulcerative colitis), psoriasis and ankylosing spondylitis would each be “separate and distinct” indications for one another for purposes of this definition. For clarity, Crohn’s disease and ulcerative colitis would not be considered to be “separate and distinct” indications for one another for purposes of this definition (i.e., both be considered to be included in the inflammatory bowel disease indication). Also, for clarity, different types or stages of a disease (such as lupus) would not be considered “separate and distinct” indications for purposes of this definition. Accordingly, by way of example if the Other Indication is inflammatory bowel disease (for example, Crohn’s disease or ulcerative colitis) the Subsequent Indication could be psoriasis or ankylosing spondylitis.

1.215 “Supply Chain Management” means the planning, management and execution of internal activities and activities of Third Party suppliers that (a) provide raw materials used in the manufacture of Licensed Compound and/or Product; (b) manufacture, fill and finish, package and label any Product or any component thereof; or (c) test, assist in the release of, hold or distribute any Product or any component thereof. Supply Chain Management also includes management of forecasting activities.

1.216 “Support Memorandum” has the meaning set forth in Section 16.2(b).

1.217 “Tactical Matters” has the meaning set forth in Section 2.6(b).

1.218 “Term” has the meaning set forth in Section 13.1.

1.219 “Territory” means (i) as applied to BMS with respect to the Licensed Product in the Licensed Field, the Licensed Territory, (ii) as applied to BMS with respect to the Cancer Product in the Cancer Field where BMS has exercised the Option, the Cancer Territory, and (iii) as applied to Alder with respect to the Cancer Product in the Cancer Field, the Alder Cancer Territory.

1.220 “Third Party” means any Person other than Alder or BMS or an Affiliate of either of them.

1.221 “Third Party License” shall mean any agreement that is deemed to be a Third Party License in accordance with the terms of Section 7.12.

1.222 “Triggering Event” means the date on which all of the following have occurred: (i) [***].

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[***].

1.223 “U.S.” means the United States of America and its territories, districts and possessions.

1.224 “U.S. Co-Developed Product Development” means the Development activities conducted and Regulatory Filings prepared and submitted pursuant to the Joint Development Plan, in each case for the purpose of obtaining Regulatory Approval of the Co-Developed Product in the U.S., whether or not the data obtained from such Development activities and the content of such Regulatory Filings are used or incorporated in any submission of Regulatory Filings to Regulatory Authorities in any jurisdiction outside the U.S. for the purpose of obtaining Regulatory Approval of the Co-Developed Product in such jurisdiction. For clarity, in the event the Joint Cancer Development Plan calls for a combined dossier for submission to the U.S. and EU regulatory authorities, the U.S. Co-Developed Product Development shall include the Development activities conducted and Regulatory Filings prepared and submitted for such combined dossier. For further clarity, the U.S. Co-Developed Product Development shall not include any Sole-Funded Study.

1.225 “US Core Patents” means those Core Patents that are not Joint Patents and that are issued or pending in the U.S.

1.226 “US Region” has the meaning set forth in Section 13.2(c).

1.227 “Valid Claim” means either (a) [***] or (b) [***], provided however, that (x) Valid Claim will exclude [***] in [***] and (y) Valid Claim will exclude [***], in either case of (x) or (y), unless and until such claim is granted.

2. COLLABORATION; COMMITTEES

2.1 Collaboration Overview. The Parties shall collaborate with respect to the Development and Commercialization of Products in the Territory, as and to the extent set forth in this Agreement (the “Collaboration”). In accordance with the terms and conditions of this Agreement, BMS shall be responsible for the Development and Commercialization of Licensed Products in the Licensed Field in the Licensed Territory. Until and unless BMS exercises the Option, Alder shall, in accordance with the terms and conditions of this Agreement, be responsible for any Development and Commercialization of Cancer Product in the Cancer Field in the Alder Cancer Territory. In the case where BMS exercises the Option, then, in accordance with the terms and conditions of this Agreement, (i) the Parties shall thereafter share responsibility for the Development of the Cancer Product in accordance with the Joint Cancer Development Plan and shall share the Cancer Development Costs as set forth in Sections 3.7, (ii) Alder shall be responsible for any other Development and Commercialization for Cancer Product in the Cancer Field in the Alder Cancer Territory and (iii) BMS shall be responsible for any other Development activities and

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Commercialization for Cancer Product in the Cancer Field in the Cancer Territory. The Parties desire to establish the Committees having certain responsibilities in connection with the Collaboration as set forth below in this Article 2. The Parties intend that their respective organizations will work together to assure success of the Collaboration in accordance with the terms and conditions of this Agreement.

2.2 Joint Executive Committee.

(a) Establishment. Within thirty (30) days after the Effective date, the Parties shall establish a joint executive committee (the “Joint Executive Committee” or “JEC”) having the responsibilities as set forth below in this Section 2.2. From time to time, the JEC may establish subcommittees to oversee particular projects, activities or aspects thereof, as the JEC deems necessary or advisable. Each Party shall initially appoint [***] representatives to the JEC. The JEC may change its size from time to time by mutual consent of its members, provided [***]. The JEC membership and procedures are further described in Section 2.8.

(b) Specific Responsibilities of the JEC. The JEC shall in particular, in accordance with the decision-making principles set forth in Section 2.2(c):

(i) coordinate the Collaboration activities of the Parties under this Agreement, including facilitating communications between the Parties with respect to the Development and Commercialization of Licensed Compounds and Products;

(ii) provide a forum for discussion of the Development of Licensed Compounds and Products;

(iii) review and approve the annual Joint Cancer Development Plan (including the Cancer Development Budget), and any interim amendments to the Joint Cancer Development Plan;

(iv) in the case where BMS exercises the Option, oversee the overall conduct of the Cancer Development Program;

(v) direct and oversee the other Committees on all significant issues that fall within the purview of the other Committees;

(vi) discuss, review and attempt to resolve any matter concerning a potential Adverse Impact;

(vii) review, resolve, and/or approve such matters as are referred to it by the Alliance Managers, JDC, JMC or JCC;

(viii) provide a forum for dispute resolution and attempt to resolve issues presented to it by, and disputes within, the JDC, JMC, JCC or any subcommittee thereof, in accordance with Section 2.6; and

(ix) perform such other duties as are expressly assigned to the JEC in this Agreement, and perform such other functions as appropriate to further the purposes of this Agreement as may be allocated to it by written agreement of the Parties.

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(c) Decision-Making. In addition to resolving issues specifically delegated to it, the JEC shall have the authority to resolve any disputes within the decision-making authority of any Committee other than the JEC that has not been resolved by such Committee, subject to and as set forth in Sections 2.6 and 16.1. All decision-making by the JEC shall be by consensus, with the representatives [***] having [***] vote [***], subject to and as set forth in Sections 2.6 and 16.1. If the JEC is unable to reach consensus on any issue within its decision-making authority, then such issue shall be resolved as set forth in Section 2.6. For avoidance of doubt, the JEC shall have no decision-making authority with respect to a matter within the final decision-making authority of a Party (including without limitation as set forth in Sections 3.2(e), 3.5, 4.1(c), 4.2, 5.1, 5.2 and 6.1) and the JEC’s role shall be limited accordingly with respect to such matters.

2.3 Joint Development and Regulatory Committee.

(a) Establishment. Within thirty (30) days after the Effective Date, the Parties shall establish a joint development and regulatory committee having the responsibilities as set forth below under this Section 2.3 with respect to the Development activities of the Parties (including regulatory and manufacturing activities directed to the non-clinical and clinical development of Licensed Compound and Product) (the “Joint Development and Regulatory Committee” or “JDC”). Each Party shall initially appoint [***] representatives to the JDC. The JDC may change its size from time to time by mutual consent of its members, provided [***]. Each Party may replace its JDC representatives at any time upon written notice to the other Party. The JDC membership and procedures are further described in Section 2.8.

(b) Specific Responsibilities of the JDC. The JDC shall in particular, in accordance with the decision-making principles set forth in Section 2.3(c):

(i) review Development activities for Licensed Product and Co-Developed Product;

(ii) provide a forum for and facilitate communications between the Parties with respect to the Development of Licensed Product and Cancer Product;

(iii) facilitate the transfer of Information and materials between the Parties with respect to the Development of Licensed Product and Co-Developed Product (and as needed establish subcommittees to coordinate such transfer);

(iv) discuss updates to and progress against the Licensed Field Development Plan;

(v) discuss updates to the Cancer Development Plan in the case where BMS has not exercised and in the case where BMS does not exercise the Option, in each case to the extent required in Section 3.5;

(vi) review proposed Clinical Trials and non-clinical studies in accordance with Section 3.5 and 3.6, and recommend for discussion by the JEC any proposed Clinical Trials and non-clinical studies that may have an Adverse Impact;

(vii) review, discuss and coordinate the Parties’ scientific presentation and publication plans relating to Licensed Compound and Product, and review any proposed publications pursuant to Section 12.4;

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(viii) in the case where BMS exercises the Option, with respect to the Co-Developed Product:

(1) oversee and monitor the Development of Co-Developed Product in accordance with the Joint Cancer Development Plan;

(2) discuss, prepare and recommend for approval by the JEC the annual Joint Cancer Development Plan (and the associated Cancer Development Budget) and any interim amendments thereto;

(3) discuss and approve any cost overruns incurred for Clinical Trials in excess of the Cancer Development Budget as described in Section 3.7(f);

(4) discuss and recommend for JEC approval decision as to whether and when to initiate or discontinue any Clinical Trial and any nonclinical study under the Joint Cancer Development Plan;

(5) discuss the regulatory strategy for Regulatory Approval and oversee regulatory matters in [***] for the Co-Developed Product;

(6) establish a regulatory subcommittee to review all material regulatory aspects of Development of the Co-Developed Product for [***];

(7) review and approve the scientific integrity, statistical analysis plans and protocols (and any investigators’ brochure(s) and revisions thereto) for all Clinical Trials under Joint Cancer Development Plan (it being understood that the JDC may delegate to a working group established by the JDC the review of such matters to avoid inappropriate delay), and reviewing and approving expedited safety reports;

(8) review the content, strategies for, and other aspects for [***]: product labeling and package insert (including any proposed changes thereto); early access and compassionate use programs; the content of, or any change to the then existing content of, any material regulatory filings; the content of any pharmacovigilance reports; any patient risk management and risk minimization strategies and plans; investigator sponsored clinical studies; and significant post–Approval filings and submissions (including supplements and amendments to Approvals);

(9) discuss and develop a regulatory strategy plan for obtaining Approvals in [***] and publication strategies for data arising out of co-funded Clinical Trials;

(10) make recommendations to the JEC concerning whether to seek new indications for Co-Developed Product;

(11) review, coordinate and align Medical Education Activities for the Co-Developed Product; and

(12) review, for JCC approval, packaging designs and trademarks (in accordance with Article 10) for the Co-Developed Product;

(ix) facilitate the exchange of information in accordance with Section 4.6 in order to ensure that significant issues concerning Adverse Event information and safety issues are addressed consistently and in a timely manner; and

(x) perform such other duties as are expressly assigned to the JDC in this Agreement or as may be properly assigned to it by the JEC.

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(c) Decision-Making. Subject to Sections 2.6 and 16.1, the JDC shall act by consensus, with the representatives [***] having [***] vote [***]. If the JDC cannot reach consensus on an issue that comes before the JDC and over which the JDC has oversight, then, subject to and as set forth in Sections 2.6 and 16.1, the Parties shall refer such matter to the JEC for resolution. For avoidance of doubt, the JDC shall have no decision-making authority with respect to a matter within the final decision-making authority of a Party (including without limitation as set forth in Sections 3.2(e), 3.5, 4.1(c), 4.2, 5.1, 5.2 and 6.1) and the JDC’s role shall be limited accordingly with respect to such matters.

2.4 Joint Manufacturing Committee.

(a) Establishment. Within thirty (30) days after the Effective Date, the Parties shall establish a committee having the responsibilities as set forth below in this Section 2.4 with respect to the manufacturing of clinical and commercial supplies of Licensed Compound and Product (the “Joint Manufacturing Committee” or “JMC”). Each Party shall initially appoint [***] representatives to the JMC. The JMC may change its size from time to time by mutual consent of its members, provided [***]. Each Party may replace its JMC representatives at any time upon written notice to the other Party. The JMC membership and procedures are further described in Section 2.8.

(b) Specific Responsibilities of the JMC. The JMC shall in particular, in accordance with the decision-making principles set forth in Section 2.4(c):

(i) coordinate and facilitate the transfer from Alder to BMS of the manufacturing technology and transition of manufacturing responsibilities from Alder to BMS in accordance with Article 6;

(ii) coordinate and facilitate cooperation between the Parties with respect to the manufacture by Alder and supply to BMS of Licensed Compound for use in Clinical Trials in accordance with Article 6;

(iii) in the case where the Joint Manufacturing Plan is prepared in accordance with Section 6.7, discuss and prepare the Joint Manufacturing Plan and amendments thereto and oversee implementation of the Joint Manufacturing Plan;

(iv) provide updates on the JMC’s activities to the JEC, JDC or JCC, as applicable; and

(v) perform such other duties as are expressly assigned to the JMC in this Agreement or as may be properly assigned to it by the JEC.

(c) Decision-Making. Subject to Sections 2.6 and 16.1, the JMC shall act by consensus, with the representatives [***] having [***] vote [***]. If the JMC cannot reach consensus on an issue that comes before the JMC and over which the JMC has oversight, then, subject to and as set forth in Sections 2.6 and 16.1, the Parties shall refer such matter to the JEC for resolution. For avoidance of doubt, the JMC shall have no decision-making authority with respect to a matter within the final decision-making authority of a Party (including without limitation as set forth in Sections 3.2(e), 3.5, 4.1(c), 4.2, 5.1, 5.2 and 6.1) and the JMC’s role shall be limited accordingly with respect to such matters.

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2.5 Joint Commercialization Committee.

(a) Establishment. As of commencement of a Phase 3 Clinical Trial for the Co-Developed Product, the Parties shall establish a joint commercialization committee having the responsibilities set forth below with respect to the Commercialization of the Co-Developed Product (the “Joint Commercialization Committee” or “JCC”). The JCC shall be terminated if the Cancer Development Program or Commercialization of the Co-Developed Product is discontinued. Each Party shall initially appoint [***] representatives to the JCC. The JCC may change its size from time to time by mutual consent of its members, provided [***]. Each Party may replace its JCC representatives at any time upon written notice to the other Party. The JCC membership and procedures are further described in Section 2.8.

(b) Specific Responsibilities of the JCC. The JCC shall, in particular, in accordance with the decision-making principles set forth in Section 2.5(c):

(i) discuss the Commercialization activities of the Parties with respect to the Co-Developed Product in the Major Markets;

(ii) with input and in consultation with the JDC, make recommendations to the JEC concerning whether to seek new indications for the Co-Developed Product;

(iii) make recommendations to the JDC concerning scientific publication plans relating to the Co-Developed Product, and review and discuss scientific presentation and publication plans related to the Co-Developed Product;

(iv) discuss a global commercialization strategy for the Co-Developed Product, including (A) brand positioning, messaging and branding strategies, (B) a global pricing band, and (C) advertising, marketing and promotional strategies;

(v) review and coordinate activities of the Parties with respect to key opinion leaders and global meetings in connection with the Co-Developed Product;

(vi) review packaging designs and trademarks (in accordance with Article 10) for the Co-Developed Product;

(vii) review on an annual basis Medical Education Activities for Co-Developed Product in the U.S. and Major European Countries;

(viii) review on an annual basis, through a subcommittee of the JCC (A) content of any messages to be provided by Medical Liaisons or medical information to be provided in response to medical inquiries relating to a Co-Developed Product communicated via sales representatives or received by letter, phone call or email, and (B) grants to support continuing medical education, symposia or Third Party clinical research related to Co-Developed Product;

(ix) perform such other duties as are expressly assigned to the JCC in this Agreement or as may be properly assigned to it by the JEC; and

(x) provide quarterly updates on its activities to the JEC.

(c) Decision-Making. Subject to Sections 2.6 and 16.1, the JCC shall act by consensus, with the representatives [***] having [***] vote [***]. If the JCC cannot reach consensus on an issue that comes before the JCC and over which the JCC has oversight, then, subject to and as set forth in Sections 2.6 and 16.1, the Parties shall refer such matter to the JEC for resolution. For avoidance of doubt, the JCC shall have no decision-making authority with respect to a matter within the final decision-making authority of a Party (including without limitation as set forth in Sections 3.2(e), 3.5, 4.1(c), 4.2, 5.1, 5.2 and 6.1) and the JCC’s role shall be limited accordingly with respect to such matters.

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2.6 Committee and Party Decision-Making; Discontinuation.

(a) Within Committees. All decisions within the decision-making authority of a Committee shall be made by consensus, and if a dispute arises within the decision-making authority of any such Committee which cannot be resolved within such Committee, then the representatives of either Party may cause such matter to be addressed first with the Alliance Managers, and if the dispute is not resolved within fifteen (15) Business Days after such referral to the Alliance Managers, then it shall be referred to the JEC for resolution. If the JEC is unable to resolve any dispute regarding a decision within its decision-making authority, then such dispute shall, at the election of either Party upon written notice to the other Party, be referred for resolution by the Executive Officers in accordance with Article 16 hereof. If the Executive Officers are unable to resolve such dispute, the matter shall be subject to the dispute resolution process set forth in Article 16, provided that, to the extent such matter is within the final decision-making authority of a Party pursuant to the express terms of this Agreement, the Executive Officer of such Party with such final decision-making authority shall make the final decision on such matter, and such final decision within the scope of such final decision-making authority shall be final and shall not be subject to any other dispute resolution procedures, provided further that such Executive Officer shall exercise such final decision-making authority in good faith and consistent with the terms of this Agreement.

(b) Tactical Matters. Each Party shall have the right to exercise final decision-making authority with respect to day-to-day operational decisions in connection with the Development, manufacture and/or Commercialization of the Product for which it is responsible, including without limitation the implementation of the tasks assigned to it pursuant to the Licensed Field Development Plan (in the case of the Licensed Product) or the Initial Cancer Development Plan or Joint Cancer Development Plan (in the case of the Cancer Product, as applicable) (“Tactical Matters”). For clarity, Tactical Matters shall not include [***] and/or [***] of [***], and/or the [***]. As applicable, Tactical Matters may be discussed by the applicable Committee, but Tactical Matters shall not be subject to the Committee decision-making or dispute resolution processes described in this Agreement, except to the extent they involve disputes relating to whether such decisions involve an Arbitrable Matter or a Litigable Matter.

(c) Limitations on the Authority of Committees. Each Committee shall have solely the powers expressly assigned to it in this Article 2 and elsewhere in this Agreement or as otherwise agreed to by Party Written Consent. A Committee shall not have any power to amend, modify, or waive compliance with this Agreement. Neither Alder nor BMS shall have any right to unilaterally modify or amend or waive its own compliance with the terms of this Agreement. The Parties further agree that (i) no Committee shall have any authority with respect to the amendment or modification of, or waiver of compliance with, this Agreement, which matters may be approved only by the Party Written Consent of both Parties, (ii) any matter that otherwise would be within the jurisdiction of a Committee may be agreed or resolved by mutual Party Written Consent, and (iii) all determinations made by a Committee shall comply with the terms of this Agreement. For purposes of this Agreement, “Party Written Consent” means, with respect to a matter that this Agreement states shall be expressly agreed to by a Party or by the Parties, the written agreement of the Party or Parties or the consent of the Party or Parties in writing, as the case may be, in each case executed on behalf of such Party or Parties by authorized representatives of such Party or Parties, provided that the approval of a Party’s representatives on an applicable Committee, in such capacities shall not constitute a Party Written Consent, and provided further, that membership on a Committee shall not prevent the representative of a Party from giving a Party Written Consent on behalf of such Party if such person otherwise is authorized to execute or give such Party Written Consent.

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(d) Discontinuation of Participation on a Committee. Each Committee shall continue to exist until the first to occur of (i) the Parties mutually agreeing to disband the Committee or (ii) Alder providing to BMS written notice of its intention to disband and no longer participate in such Committee. Once Alder has provided written notice as referred to in subclause (ii) above, such Committee shall have no further obligations under this Agreement and BMS shall have the right to solely decide, without consultation, any matters previously before such Committee, subject to the other terms of this Agreement. In the case that a Committee is disbanded, then all discussions and sharing of Information required under this Agreement that would otherwise occur through the disbanded Committee shall continue to be carried out between the Parties, including without limitation the discussions and sharing of information under Section 2.11 and Articles 3, 4, 5 and 6.

2.7 Alliance Managers. Each of the Parties shall appoint [***] who possesses a general understanding of Development and Commercialization issues to act as its Alliance Manager (each, an “Alliance Manager”). The role of the Alliance Manager is to act as a single point of contact between the Parties to assure a successful Collaboration. The Alliance Managers shall attend all meetings of the JDC, JCC and JEC as non-voting participants and support the co-chairpersons of each Committee in the discharge of their responsibilities. Alliance Managers [***]. An Alliance Manager may bring any matter to the attention of any Committee if such Alliance Manager reasonably believes that such matter warrants such attention. Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party. Any Alliance Manager may designate a substitute to temporarily perform the functions of such Alliance Manager upon written notice to the other Party’s Alliance Manager. Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment within and among the Committees. Each Alliance Manager also shall:

(i) identify and bring disputes to the attention of the appropriate Committee in a timely manner and be the point of first referral in all matters of conflict resolution;

(ii) provide a single point of communication for seeking consensus both internally within the Parties’ respective organizations and between the Parties regarding key issues;

(iii) plan and coordinate cooperative efforts and internal and external communications; and

(iv) take responsibility for ensuring that Committee activities, such as the conduct of required Committee meetings and production and approval of meeting minutes, occur as set forth in this Agreement and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.

2.8 General Committee Membership and Procedures.

(a) Membership. Each of Alder and BMS shall designate representatives with appropriate expertise to serve as members of each Committee. Each Party may replace its Committee representatives at any time upon written notice to the other Party. Each Committee shall have co-chairpersons. Alder and BMS shall each select from their representatives a co-chairperson for each Committee, and each Party may change its designated co-chairperson from time to time upon written notice to the other Party. The co-chairpersons of each Committee, with assistance and guidance from the Alliance Managers, shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting, and preparing and issuing minutes of each meeting within [***] thereafter, provided that the co-chairpersons shall call a meeting of the applicable Committee promptly upon the written request of either co-chairperson to convene such a meeting.

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(b) Committee Meetings. Each Committee shall hold meetings at such times as it elects to do so, provided that unless the Parties otherwise mutually agree in writing to a different frequency for such meetings (i) the JDC and JEC shall meet at least twice each calendar year in the case [***] and the JDC and JEC shall meet at least once each calendar quarter in the case [***], (ii) in the case where the JCC is established, the JCC shall meet at least once each calendar quarter so long as the JCC is maintained (the JCC shall be terminated if the Cancer Development Program or Commercialization of the Co-Developed Product is discontinued), (iii) the JMC shall meet at least once each calendar quarter during the first 9 months following the Effective Date ([***]) and so long as one Party is supplying Licensed Compound and/or Product to the other Party under the Agreement and (iv) after the first 9 months following the Effective Date, the JMC shall meet at least once each calendar year in the case [***], but where neither Party is supplying Licensed Compound and/or Product to the other Party under the Agreement. Either Party may also call a special meeting of a Committee (by videoconference or teleconference) by at least ten (10) Business Days (or sooner if the Parties mutually agree) prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting, and such Party shall provide the applicable Committee no later than ten (10) Business Days (unless Parties otherwise agree) prior to the special meeting with materials reasonably adequate to enable an informed decision. No later than ten (10) Business Days (unless the Parties otherwise agree) prior to any meeting of the Committee, the chairpersons of such Committee shall be responsible for assuring the preparation and circulation of an agenda for such meeting by the Alliance Managers; provided that either Party may propose additional topics for discussion at the meeting, either prior to or in the course of such meeting, which the other Party in its discretion may agree to discuss at that meeting or defer discussion until the next meeting. Each Committee may meet in person, by videoconference or by teleconference, provided that at least one (1) meeting of the JDC and JEC per calendar year shall be in person unless the Parties mutually agree in writing to waive such requirement in lieu of a videoconference or teleconference. In-person committee meetings will be held at locations in the U.S. alternately selected by Alder and by BMS. The Alliance Managers shall, and as appropriate other employee representatives as needed may, attend meetings of the applicable Committee (as non-voting participants, unless they are members of such Committee). Each Party will bear the expense of its respective representatives’ participation in Committee meetings. At least one (1) representative of each Party shall be required for a quorum at any Committee meeting. The chairpersons of a Committee will be responsible for assuring the preparation of reasonably detailed written minutes (which shall be prepared by the Alliance Managers) of all committee meetings that reflect, without limitation, material decisions made at such meetings. The chairpersons of a Committee shall be responsible for sending (and the Alliance Managers shall send) draft meeting minutes to each member of such Committee for review and approval within ten (10) Business Days after each committee meeting. Such minutes will not be finalized until a co-chairperson from each Party reviews and confirms in writing the accuracy of such minutes. The minutes of each meeting shall, among other things, record all matters acted upon and approved or disapproved by such Committee, and any matters such Committee failed to resolve.

(c) Meeting Agendas. Each Party will disclose to the other proposed agenda items along with appropriate information at least ten (10) Business Days in advance of each regularly scheduled meeting of the applicable Committee and as soon as possible for any special meeting, provided that under exigent circumstances requiring Committee input, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the representatives of such other Party on the Committee consent to such later addition of such agenda items or the absence of a specific agenda for such Committee meeting, which consent shall not be unreasonably withheld.

(d) Interactions Between Committees and Internal Teams. The Parties recognize that each Party possesses an internal structure (including various committees, teams and review boards) that will be involved in administering such Party’s activities under this Agreement. Each Committee shall establish procedures to facilitate communications between such Committee and the relevant internal committee, team or

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review board of each Party in order to maximize the efficiency of the Collaboration, including by requiring appropriate members of the Committee to be available at reasonable times and places and upon reasonable prior notice for making appropriate oral reports to, and responding to reasonable inquiries from, the relevant internal committee, team or review board.

2.9 Compliance with Law. Each Party hereby covenants and agrees to comply with Applicable Law in performing its activities connected with the Development, manufacture and Commercialization (as applicable) of Licensed Compound and Product.

2.10 Records. Each Party shall maintain complete and accurate records of all work conducted under the Collaboration and all results, data and developments made pursuant to its efforts under the Collaboration. Such records shall be complete and accurate and shall fully and properly reflect all work done and results achieved in the performance of the Collaboration in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes. Each Party shall maintain such records for a period of [***] years after such records are created; provided that the following records may be maintained for an appropriate longer period (beyond the expected expiration date of the applicable patents), in accordance with each Party’s internal policies on record retention in order to ensure the preservation, prosecution, maintenance or enforcement of intellectual property rights. Either Party shall have the right to review and copy such records of the other Party at reasonable times to the extent necessary or useful for it to conduct its obligations or enforce its rights under this Agreement.

2.11 Backup Program.

(a) Optimization and Discovery Backup Programs. The Parties recognize that BMS and/or Alder may desire, following the Effective Date, to commence a program to identify and/or optimize IL-6 Compound(s) suitable as backup(s) or follow-on(s) to ALD518 (each such IL-6 Compound being a “Backup Compound”), by: (i) optimizing certain IL-6 Compounds Controlled by Alder that have been identified as of and through the conduct of screening activities performed prior to the Signing Date in the course of a screening program directed to [***] (as opposed a screening program directed to another target in which [***] is used as a counterscreen) (such IL-6 Compounds, the “Existing IL-6 Compounds”), through activities such as modifying such Existing IL-6 Compounds to achieve a more desirable safety and/or efficacy profile and humanizing such Existing IL-6 Compounds, conducting certain early pre-clinical testing of such Existing IL-6 Compounds for the purpose of generating potential Backup Compound(s) and generating yeast production strains (through the use of the Alder Mab Xpress Technology) for such Existing IL-6 Compounds (the “Optimization Backup Program”); and/or (ii) conducting screening activities (through the use of the Alder ABS Technology or other technology Controlled by Alder) to identify new IL-6 Compounds that bind to [***] ([***] as requested by BMS or Alder) directly and specifically and conducting optimization and early pre-clinical testing (in the same manner as set forth above in this sentence for the Optimization Backup Program) of such newly identified IL-6 Compounds for the purpose of generating potential Backup Compound(s) and generating yeast production strains (through the use of the Alder Mab Xpress Technology) for such Backup Compounds (the “Discovery Backup Program”); and/or (iii) as set forth in Section 2.11(e). The mechanism for initiating and conducting the Optimization Backup Program and the Discovery Backup Program, and the Parties’ respective rights to the potential Backup Compound(s) generated thereunder, are described in more detail below. The Optimization Backup Program and Discovery Backup Program, to the extent actually initiated and conducted under this Agreement, shall be referred to individually as a “Backup Program” and collectively as the “Backup Programs.”

(b) BMS Commenced Backup Programs; Research Plans; Costs for the Backup Programs. At any time during the Term BMS shall have the right to request that Alder commence an Optimization Backup Program. At any time prior to [***] the Effective Date BMS shall have the right to request that Alder commence a Discovery Backup Program. BMS shall make such request by notifying Alder in writing. As soon as practicable after Alder receives such notification with respect to a

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Backup Program, the Parties shall agree through the JDC (or a subcommittee of the JEC formed for the purpose of overseeing the Backup Program) upon a research plan setting forth the activities, timelines and budget [***] for such Backup Program (the “Research Plan”). As between the Parties, Alder shall be the Party responsible for the conduct of the Backup Program through the [***] for Backup Compounds being considered for selection as Selected LF Backup Compounds, provided that in the performance of any Backup Program, upon request by BMS, Alder shall provide to BMS the amino acid sequence for IL-6 Compounds being evaluated as potential Backup Compounds for purposes of BMS synthesizing the coding sequence and expressing such IL-6 Compounds (using cell lines and expression vectors available to BMS that have been obtained independently of this Agreement, unless the Parties otherwise agree in writing) in order for BMS to further evaluate the IL-6 Compounds to determine which IL-6 Compounds to select for humanization (or other modification) and/or to be selected for the generation by Alder of yeast production strains using the Alder Mab Xpress^® Technology. The Research Plan for the Optimization Backup Program is expected to require a minimum of [***] FTEs, and shall not require Alder to commit more than [***] FTEs, per year [***]. The Research Plan for the Discovery Backup Program is expected to require a minimum of [***] FTEs, and shall not require Alder to commit more than [***] FTEs, per year [***]. BMS shall reimburse Alder by submitting payments to AlderHoldings [***] basis for Alder’s [***] incurred in the performance of the Backup Program(s) in accordance with the Research Plan(s), provided that such [***] shall be in accordance with the approved Research Plan(s) (or an amendment to the Research Plan(s)) or otherwise approved in writing by BMS in advance of being incurred (such reimbursable costs of Alder being the “Research Costs”). Such Backup Program(s) shall be overseen by the JDC or a subcommittee of the JEC formed for such purpose.

(c) Rights to Backup Compounds. Alder shall keep the JDC informed of its progress under the Backup Program(s) being conducted by Alder pursuant to Section 2.11(b), including by delivering to the JDC (or a subcommittee) the amino acid sequence of particular Backup Compounds, together with the data showing the affinity and activity of such Backup Compounds with respect to [***] ([***] as applicable) and any other data as may be specified in the Research Plan. For any such Backup Program, BMS shall have the first right to select, out of all Backup Compounds identified, discovered and/or optimized under such Backup Program, up to [***] Backup Compounds as Selected LF Backup Compounds. Upon request by BMS, Alder shall transfer to BMS the yeast production strain for each of the Selected LF Backup Compounds. For clarity, the production strains transferred by Alder to BMS under this Section 2.11(c) shall be Alder Materials and shall only be used as permitted under Sections 7.13 and 6.8. After BMS’ selection of no more than [***] Selected LF Backup Compounds, it shall notify Alder and Alder shall have the right to select up to [***] Backup Compounds out of the remaining Backup Compounds identified, discovered and/or optimized under such Backup Program as Selected Cancer Backup Compounds; provided that in order to exercise such right, Alder shall [***] pursuant to which such Selected Cancer Backup Compounds were generated and for which BMS has reimbursed Alder in accordance with Section 2.11(b). To the extent there are any remaining Backup Compounds that are not selected as Selected LF Backup Compounds or Selected Cancer Backup Compounds, they shall be available for selection, first by BMS, then by Alder in groups of no more than [***] at a time, as Selected LF Backup Compounds and Selected Cancer Backup Compounds, in the same manner as set forth in the preceding sentence, until no such Backup Compounds remain.

(d) No Rights to Backup Compounds in the Other Party’s Field. BMS shall have the right to Develop and Commercialize Licensed Products comprising each Selected LF Backup Compound solely in the Licensed Field and in the Licensed Territory, subject to the terms and conditions of this Agreement. For clarity, Alder’s retained rights in the Cancer Field and BMS’ Option shall not apply to any such Selected LF Backup Compound. Alder shall have the right to develop and commercialize each Selected Cancer Backup Compound solely as a Cancer Product in the Cancer Field in the Alder Cancer Territory, and BMS shall not have the right to develop and/or commercialize pharmaceutical products comprising such

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Selected Cancer Backup Compound (i) in the Licensed Field under any circumstances or (ii) in the Cancer Field unless and until BMS exercises the Option, in which case BMS shall have the right to Develop and Commercialize, in accordance with Articles 3 and 5, such Selected Cancer Backup Compound as part of a Cancer Product in the Cancer Field in the Cancer Territory.

(e) Alder Backup Programs. If Alder desires to conduct a research program for the discovery, identification and/or optimization of IL-6 Compounds for further development and/or commercialization (in conformance with its rights under this Agreement), Alder shall notify BMS in writing. BMS shall notify Alder in writing within [***] of receiving Alder’s notification whether BMS desires to participate in such research program, and if so, BMS shall be deemed to have requested Alder to initiate a Backup Program under Section 2.11(b), and the provisions of Sections 2.11(a) through (c) above shall apply to such program and to the Backup Compounds discovered, identified and optimized thereunder. If BMS notifies Alder that it is not interested in participating in such research program, or BMS does not provide Alder with any written notification within such [***] period, then Alder shall have the right to conduct such research program independently, at its sole cost and expense. In such case, Alder shall have the first right to select up to [***] Backup Compounds as Selected Cancer Backup Compounds. For clarity, such Selected Cancer Backup Compounds shall be subject to the rights, limitations and obligations set forth in Sections 2.11(c) and 2.11(d) above. After Alder’s first selection of up to [***] Selected Cancer Backup Compounds, BMS shall have the right to select up to [***] Backup Compounds (i.e., which are not Selected Cancer Backup Compounds) as Selected LF Backup Compounds; provided that in order to exercise such right, BMS shall first pay to AlderHoldings an amount equal to [***] of the [***] that Alder has incurred with respect to the program conducted by Alder under this Section 2.11(e) after the initial notification of BMS by Alder as set forth in the first sentence of this Section 2.11(e). To the extent there are any remaining Backup Compounds that are not selected as Selected Cancer Backup Compounds or Selected LF Backup Compounds, they shall be available for selection, first by Alder, then by BMS in groups of no more than [***] at a time, as Selected Cancer Backup Compounds and Selected LF Backup Compounds, in the same manner as set forth in the preceding sentences, until no such Backup Compounds remain.

(f) BMS Optimization Program. As an alternative or complement to the Optimization Backup Program conducted under Section 2.11(a) through (c), BMS shall have the right to conduct its own optimization program with respect to the Existing IL-6 Compounds or IL-6 Compounds identified by Alder through the screening performed under a Discovery Backup Program (i.e., a program to [***] and [***] the amino acid sequence of such IL-6 Compounds) at its sole cost and expense by providing Alder with written notification thereof (the “BMS Optimization Program”). As soon as practicable after Alder receives such notification, the Parties shall agree through the JDC upon a research plan setting forth the activities and timelines for BMS to conduct such optimization program. For the purposes of the conduct of such BMS Optimization Program, Alder shall provide to BMS the amino acid sequences for the Existing IL-6 Compounds (or as applicable, the IL-6 Compounds identified by Alder through the screening performed under a Discovery Backup Program) as requested by BMS, and all available testing data for such IL-6 Compounds. Following its optimization activities, BMS shall provide Alder with the amino acid sequence for the optimized IL-6 Compounds selected by BMS as Selected LF Backup Compounds. BMS shall have the right to select up to [***] such optimized IL-6 Compounds as Selected LF Backup Compounds, for which Alder shall transfer to BMS the yeast production strains that Alder generates. For clarity, the production strains transferred by Alder to BMS under this Section 2.11(f) shall be Alder Materials and shall only be used as permitted under Sections 7.13 and 6.8. BMS shall provide to the JDC the amino acid sequence for all Backup Compounds optimized under such BMS Optimization Program, and Alder shall have the right to select up to [***] Backup Compounds out of the remaining Backup Compounds identified, discovered and/or optimized under such BMS Optimization Program as Selected Cancer Backup Compounds; provided that in order to exercise such right, Alder shall first pay to BMS an amount equal to[***] of [***] incurred by BMS in the performance of the BMS Optimization Program. To the extent there are any remaining Backup Compounds that are not selected as Selected LF Backup Compounds or Selected Cancer Backup Compounds, they shall be available

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for selection, first by BMS, then by Alder in groups of no more than [***] at a time, as Selected LF Backup Compounds and Selected Cancer Backup Compounds, in the same manner as set forth in the preceding sentences, until no such Backup Compounds remain. The Parties’ rights, limitations and obligations with respect to such Backup Compounds for further development and commercialization in their respective fields shall be the same as set forth in Section 2.11(d) above.

2.12 Third Party Obligations. Except as provided under Sections 3.10, 8.6(d)(i) or otherwise expressly provided for under this Agreement, (i) BMS shall be responsible for any and all obligations it may have under any agreements between BMS (or its Affiliates) and any Third Party and (ii) Alder shall be responsible for any and all obligations it may have under any agreements between Alder (or its Affiliates) and any Third Party.

3. DEVELOPMENT

3.1 BMS’ Responsibility for Development in Licensed Field. From and after the Effective Date, BMS shall assume sole responsibility for the Development of Licensed Product in the Licensed Field at its own cost and expense (including responsibility for all funding, resourcing and decision-making) in the Licensed Territory during the Term, except as otherwise agreed upon by the Parties. BMS, by itself or through its Affiliates and Sublicensees, shall use Diligent Efforts to Develop at least one Licensed Product in the Licensed Field in the Licensed Territory. In particular, BMS shall, either by itself or through its Affiliates or Sublicensees, pursue an active and ongoing program to Develop at least one Licensed Product for the purpose of obtaining Regulatory Approval in each of the Major Markets. BMS , by itself or through its Affiliates and Sublicensees, shall use Diligent Efforts to pursue an active and ongoing Development program for the ALD518 LF Product for the RA Indication in the Licensed Territory for the purpose of obtaining Regulatory Approval in each of the Major Markets in accordance with the Licensed Field Development Plan. If in the exercise of such Diligent Efforts, BMS discontinues Development ALD518 LF Product for the RA Indication, then BMS shall use Diligent Efforts (a) to pursue an active and ongoing Development program for the ALD518 LF Product for at least one other indication in the Licensed Field and/or (b) to pursue an active and ongoing Development program for a different Licensed Product in the Licensed Field. BMS and its Affiliate and Sublicensees shall perform the Development of Licensed Products in the Licensed Field in accordance with the Licensed Field Development Plan, which shall identify the Clinical Trials and non-clinical studies to be performed by BMS and its Affiliate and Sublicensees with respect to the Licensed Products in the Licensed Field.

3.2 Development in Licensed Field.

(a) Licensed Field Development Plan. The Development of Licensed Product in the Licensed Field by BMS including its Affiliates and Sublicensees shall be conducted pursuant to a development plan (the “Licensed Field Development Plan”). The Licensed Field Development Plan, prepared as set forth below, shall provide an overview of key activities projected for the Development of the applicable Licensed Product in the Licensed Field from the then-current date through Regulatory Approval(s) of such Product in the Major Markets, [***] in [***] in [***]. The Licensed Field Development Plan shall be discussed by the Parties through the JDC.

(b) Initial Licensed Field Development Plan. An Initial Licensed Field Development Plan has been agreed upon by the Parties and is attached to this Agreement as Exhibit D. Within [***] after the Effective Date, BMS shall prepare and submit to the JDC for review and discussion an updated Licensed Field Development Plan consistent with the Initial Licensed Field Development Plan.

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(c) Updates to the Licensed Field Development Plan. During the Term, BMS shall provide Alder through the JDC with [***] updates to the Licensed Field Development Plan. Such [***] updated Licensed Field Development Plan shall take into account completion or cessation of Development activities or commencement of new Development activities not contemplated by the then-current Licensed Field Development Plan. In addition, BMS shall provide Alder through the JDC updates to the Licensed Field Development Plan on a more frequent basis if significant changes are made to the then-current Licensed Field Development Plan outside the regular [***] updating process set forth above (for example, to add a new Clinical Trial or substantial changes to a Clinical Trial in the then-current Licensed Field Development Plan). Such updates and changes described in this Section 3.2(c) to the Licensed Field Development Plan shall be presented by BMS to the JDC sufficiently in advance of being implemented so as to provide Alder with a reasonable opportunity to review and comment on such changes. Upon request by Alder in connection with such review, BMS shall provide to Alder through the JDC (or a subcommittee thereof) a copy of the protocol and investigator’s brochure for any proposed Clinical Trial for the Licensed Product. BMS will consider in good faith any suggestions by Alder with respect to the Licensed Field Development Plan that are provided by Alder within [***] after receiving (i) the Licensed Field Development Plan from BMS or (ii) the protocol and investigator’s brochure, if requested by Alder promptly after Alder’s receipt of the Licensed Field Development Plan.

(d) Licensed Field Development Reports. BMS shall provide to Alder a written report which summarizes the status and progress in the Development of Licensed Product in the Licensed Field under the Licensed Field Development Plan every [***], in sufficient detail for Alder to determine whether BMS has met its obligations under Section 3.1. For such purpose, BMS shall provide Alder with additional information relating to the Development of Licensed Product in the Licensed Field as reasonably requested by Alder.

(e) Licensed Field Decision-Making. BMS shall have final decision-making authority with respect to all Development activities for Licensed Product in the Licensed Field in the Licensed Territory, and such final decision shall be consistent with the terms and conditions of this Agreement. The role of the JDC and JEC with respect to all Development activities for Licensed Product in the Licensed Field in the Licensed Territory shall be limited to discussion and transfer of information in accordance with the responsibilities assigned to the JDC and JEC as set forth in Article 2. Notwithstanding the foregoing, BMS shall not assign any obligation to Alder or materially change any obligation of Alder in the Licensed Field Development Plan, without Alder’s prior written consent.

(f) Potential Adverse Impact of Study in Licensed Field Development Plan. Notwithstanding BMS’ final decision-making authority as set out in Section 3.2(e), if a Clinical Trial or non-clinical study [***] proposed by BMS for a Licensed Product is one which Alder reasonably believes is likely to have a material adverse impact on the target product profile for the Cancer Product containing ALD518 in the Cancer Field, Alder shall so inform BMS, and provide BMS in writing an explanation and basis for such belief. If BMS, in its sole discretion, agrees with Alder then BMS shall not conduct such proposed study or trial; but if BMS does not agree with Alder, BMS shall so inform Alder through the JDC, and upon Alder’s request, such matter shall be referred to the Alliance Managers and JEC as provided in Section 16.1.

3.3 Technology Transfer.

(a) Technology Transfer to BMS. Without limiting the licenses and other rights and obligations under this Agreement (including without limitation the rights granted to BMS under Article 7, and Alder’s obligation to transfer manufacturing technology to BMS under Article 6), Alder shall, [***], and provided that (i) [***] and (ii) Alder shall [***], deliver, and cause its Affiliates to deliver, to BMS promptly

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following the Effective Date and from time to time during the Term (to the extent new Alder Know-How comes into the Control of AlderHoldings and has not been delivered previously to or is otherwise known by BMS, in which case no less frequently than [***] and more frequently upon reasonable request by BMS) all tangible embodiments of Alder Know-How within AlderHoldings’ or its Affiliates’ possession or Control which is reasonably necessary or useful for the Development, Regulatory Approval and/or Commercialization of Licensed Product in the Licensed Field (and as applicable for the Co-Developed Product in the Cancer Field) (including without limitation, [***] (including without limitation [***] data), assays, protocols, procedures, reports, and Regulatory Materials); provided however, that the foregoing obligation shall not apply to any Alder Know-How that is reasonably necessary or useful for the manufacture of any Licensed Compound or Licensed Product (or, as applicable in the case where BMS exercises the Option, any Selected Cancer Backup Compound or Co-Developed Product) because Alder’s obligations with respect thereto are solely as set forth in Section 6.3. In addition, Alder shall disclose to BMS’ Patent Contact any additional Alder Patents then Controlled by AlderHoldings that are licensed and/or assigned to BMS pursuant to Article 7. In order for BMS to use such Alder Know-How upon reasonable request by BMS, Alder shall provide BMS with [***] of [***] information for purposes of supporting or maintaining the Regulatory Approval for the Licensed Product in the Licensed Field (and as applicable for the Co-Developed Product in the Cancer Field), as necessary. Upon reasonable request by BMS, Alder shall transfer to BMS samples of Alder Materials (to the extent available to Alder) that are necessary for the Development of ALD518, ALD518 LF Product, Selected LF Backup Compound and/or Licensed Product containing Selected LF Backup Compound (and, as applicable in the case where BMS exercises the Option, any Selected Cancer Backup Compound and/or Co-Developed Product); provided however, that the foregoing obligation shall not apply to any Alder Material that is necessary or useful for the manufacture of any Licensed Compound or Licensed Product (or, as applicable in the case where BMS exercises the Option, any Selected Cancer Backup Compound or Co-Developed Product) because Alder’s obligations with respect thereto are solely as set forth in Section 6.3. The Alder Materials shall be used solely in accordance with Section 7.13. In addition, Alder shall [***] provide reasonable consultation and assistance for the purpose of transferring to BMS all such Alder Know-How to the extent reasonably necessary or useful for BMS to Develop and Commercialize Licensed Product in the Licensed Field (and as applicable for the Co-Developed Product in the Cancer Field); provided however, that the foregoing obligation shall not apply to any Alder Know-How that is reasonably necessary or useful for the manufacture of any Licensed Compound or Licensed Product (or, as applicable in the case where BMS exercises the Option, any Selected Cancer Backup Compound or Co-Developed Product) because Alder’s obligations with respect thereto are solely as set forth in Section 6.3. For clarity, this Section 3.3(a) shall not apply to any transfer of Alder Know-How or Alder Materials that is reasonably necessary or useful for the manufacture of any Licensed Compound or Licensed Product (or, as applicable in the case where BMS exercises the Option, any Selected Cancer Backup Compound and/or Co-Developed Product); Alder’s obligations with respect thereto are solely as set forth in Section 6.3. For further clarity, nothing in this Section 3.3(a) shall be construed as requiring Alder or its Affiliates to transfer to BMS any of the Alder Background Technology or to provide any assistance to BMS therefor.

(b) Technology Transfer to Alder. Without limiting the licenses and other rights granted to AlderHoldings under Article 7 and subject to Section 6.3(b) with respect to a Future Process developed by BMS, BMS shall, at no charge to Alder, deliver, and cause its Affiliates to deliver, to Alder from time to time during the Term (to the extent new BMS Know-How comes into the Control of BMS and has not previously been delivered to or is otherwise known by Alder, in which case no less frequently than [***] and more frequently upon reasonable request by Alder) all tangible embodiments of BMS Know-How within BMS’ or its Affiliates’ possession or Control which is reasonably necessary or useful for the Development, Regulatory Approval and/or Commercialization of Cancer Product in the Cancer Field (including without limitation, [***] (including without limitation [***] data), assays, protocols, procedures, reports, manufacturing and [***]). In order for Alder to use such BMS Know-How upon reasonable request by Alder, BMS shall provide Alder with copies and/or

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

[***] and information for purposes of supporting or maintaining the Regulatory Approval for the Cancer Product for the Cancer Field. In addition, BMS shall [***] provide reasonable consultation and assistance for the purpose of transferring to Alder all such BMS Know-How, to the extent reasonably necessary or useful for Alder to Develop, manufacture and Commercialize Cancer Product for the Cancer Field in the Alder Cancer Territory.

(c) For clarity, the technology transfer obligations of the applicable Party under Section 3.3(a) and (b) above shall encompass only the delivery of the applicable Know-How by such Party to the other Party and the assistance provided by such Party to the other Party in an advisory role, and such technology transfer obligations shall not be construed as to require the Party performing such technology transfer to carry out substantive Development activities after the Effective Date on behalf of the other Party.

3.4 Responsibility for Development in Cancer Field. Subject to the terms and conditions of this Agreement (including without limitation BMS’ rights and obligations if BMS exercises the Option), Alder shall retain sole responsibility for the Development of Cancer Product in the Cancer Field [***], except as otherwise agreed upon by the Parties. In the case where BMS exercises the Option, the Parties shall share the Cancer Development Costs as set forth in Section 3.7 and, unless the Parties agree otherwise, Alder shall have operational responsibility for [***] in accordance with [***] (imcluding [***] and [***]). BMS shall otherwise be responsible for [***]. Alder shall otherwise be responsible for [***]. Each Party (including its Affiliates and (sub)licensees as applicable) shall [***]. For clarity, each Party shall be solely responsible for each Sole-Funded Study that it undertakes.

3.5 Conduct of Development in Cancer Field.

(a) Cancer Development Plan. The Development of Cancer Product in the Cancer Field shall be conducted pursuant to a development plan (the “Cancer Development Plan”). The Cancer Development Plan, prepared as set forth below, shall provide an overview of key activities projected for the Development of the applicable Cancer Product in the Cancer Field from the then-current date through Regulatory Approval(s) of such Product in [***], including an outline of significant [***] and [***] in the Cancer Field in [***]. In the case of the Co-Developed Product, the Cancer Development Plan (i.e., the Joint Cancer Development Plan) will also specify for each activity in the Joint Cancer Development Plan the Party responsible for carrying out the activity (or that the Parties are jointly responsible) consistent with the principles set forth in Section 3.4 and the Development Costs the Parties expect to incur for each activity in the Joint Cancer Development Plan (which is referred to herein as the “Cancer Development Budget”). Accordingly, in the case of the Co-Developed Product, the Joint Cancer Development Plan will also include the Cancer Development Budget. In addition, the Joint Cancer Development Plan shall clearly indicate whether a Clinical Trial in the plan (i) is approved in accordance with Section 3.6 to be conducted without any contingencies or success criteria needing to be previously met (such approved Clinical Trial being an “Approved Study”), (ii) is approved to be conducted subject to certain contingencies or success criteria previously being met or (iii) is proposed or projected but not yet approved to be conducted. For clarity, a Clinical Trial for the Co-Developed Product which is not an Approved Study would not be undertaken, and the Cancer Development Costs would not include the costs for any Clinical Trial which is not an Approved Study, except in accordance with Section 3.6 or unless the Parties otherwise agree in writing.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(b) Initial Cancer Development Plan. From the Effective Date [***], [***] shall conduct any Development of the Cancer Product in accordance with the Initial Cancer Development Plan or the Cancer Development Plan. An Initial Cancer Development Plan is attached to this Agreement as Exhibit C. Within [***] after the Effective Date, Alder shall prepare and submit to the JDC for review and discussion an updated Cancer Development Plan consistent with such Initial Cancer Development Plan. The studies set forth in the Initial Cancer Development Plan shall be reviewed by BMS after the Effective Date in accordance with the timelines and procedures set forth in Section 3.5(e) for the purpose of assessing whether they are likely to have an Adverse Impact.

(c) Preparation of Initial Joint Cancer Development Plan for Co-Developed Product. Alder shall inform the JDC as to the [***] and shall [***]. In addition, Alder shall notify the JDC (i) as to the [***] within [***] of such [***] and (ii) at least [***] in advance of [***]. BMS shall have the right to [***] on the [***] document (such document containing [***] and [***]) for [***] such [***], provided that Alder shall be the Party [***]. Upon BMS’ request [***], the Parties shall work cooperatively through the JDC to prepare the initial Joint Cancer Development Plan and Cancer Development Budget for the first indication for the Co-Developed Product. Such plan for Phase 3 Clinical Trials to support BLA Approval for the first indication for the Cancer Product, as reviewed by the JDC, will be the proposed plan [***]. The initial Joint Cancer Development Plan for the Co-Developed Product shall be revised as needed such that the Approved Studies conform to the Phase 3 Clinical Trials supporting BLA Approval for the first indication of the Co-Developed Product [***].

(d) Updates to the Cancer Development Plan for the Co-Developed Product. This Section 3.5(d) [***]. Prior to the commencement of each Calendar Year following such exercise and at such other times as the Parties deem appropriate, the JDC shall prepare and submit to the JEC for review and approval a draft of an updated Joint Cancer Development Plan for Co-Developed Product, with the first of such update being an update to the Initial Joint Cancer Development Plan prepared by the Parties pursuant to Section 3.5(c) above. Such annual updated Joint Cancer Development Plan shall take into account completion or cessation of Development activities or commencement of new Development activities not contemplated by the then-current Joint Cancer Development Plan. Such proposed update to the Joint Cancer Development Plan, including the Cancer Development Budget, shall be submitted for approval by the JEC no later than [***] prior to the start of the next Calendar Year.The Parties acknowledge and agree that if there is any need to change the then-current Joint Cancer Development Plan outside the regular annual updating process set forth above (for example, to add a new Clinical Trial or to make substantial changes to a Clinical Trial in the then-current Joint Cancer Development Plan, or other changes that change the projected and budgeted Development Costs in the then-current Cancer Development Budget), such change to the Joint Cancer Development Plan will be submitted by the JDC for approval by the JEC on an accelerated basis as follows: [***], with the proposed changes being reviewed and, in the case where either Party desires to hold a JEC meeting to discuss such changes, a JEC meeting will be held within [***] following such submission (such [***] period may be extended upon reasonable request by a JEC representative of either Party). All changes to the Joint Development Plan shall be subject to Section 3.5(i).

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(e) Updates to the Cancer Development Plan [***] [***]. This Section 3.5(e) shall [***]. During the Term, Alder shall provide BMS through the JDC with annual updates to the Cancer Development Plan. Such annual updated Cancer Development Plan shall take into account completion or cessation of Development activities or commencement of new Development activities not contemplated by the then-current Cancer Development Plan. In addition, Alder shall provide BMS through the JDC updates to the Cancer Development Plan on a more frequent basis if significant changes are made to the then-current Cancer Development Plan outside the regular annual updating process set forth above (for example, to add a new Clinical Trial or significant changes to a Clinical Trial in the then-current Cancer Development Plan). Such changes to the Cancer Development Plan shall be presented by Alder to the JDC sufficiently in advance of being implemented so as to provide BMS with a reasonable opportunity to review and comment on such changes. With respect to each Clinical Trial or non-clinical study [***] proposed to be conducted by Alder for the Cancer Product, in advance of undertaking such Clinical Trial or non-clinical study Alder shall provide to BMS the same information as set forth in Section 3.6(a) [***] with respect to the proposed Clinical Trial or non-clinical study to assess whether the proposed Clinical Trial or non-clinical study is likely to have an Adverse Impact. Such assessment shall be performed by BMS in good faith and shall be completed within [***] with respect to any Clinical Trial or within [***] with respect to any non-clinical study, in each case subject to Section 16.1(f), following BMS’ receipt of such information and shall be BMS’ sole opportunity to raise any concerns regarding Adverse Impact with respect to such Clinical Trial or non-clinical study. If there are any significant changes to the proposed Clinical Trial or non-clinical study reviewed by BMS as set forth above, then such revised proposed Clinical Trial or non-clinical study shall be subject to the same review by BMS as set forth above. Upon request by BMS within [***] of an updated Cancer Development Plan, Alder shall provide to BMS through the JDC (or a subcommittee thereof) a copy of the protocol and investigator’s brochure for any proposed Clinical Trial for the Cancer Product. Alder will consider in good faith any suggestions by BMS with respect to the Cancer Development Plan to the extent that such suggestions are provided by BMS within [***] after the later of (a) BMS’ receipt of the Cancer Development Plan and (b) BMS receipt of the protocol and investigator’s brochure.

(f) Cancer Development Reports. Alder shall provide to BMS a report which summarizes the status and progress in the Development of Cancer Product in the Cancer Field under the Cancer Development Plan every [***] and from time to time as reasonably requested by BMS not more than [***]; provided that in the case of Co-Developed Product, the Parties shall jointly prepare a report which summarizes the status and progress in the Development of Co-Developed Product in the Cancer Field under the Cancer Development Plan every Calendar Quarter. In addition, in the case of the Co-Developed Product, the Parties shall prepare and provide reports for purposes of the sharing of Cancer Development Costs as set forth in Section 3.7.

(g) Cancer Development Decision-Making [***]. [***], subject to Section 16.1(f), (i) [***] shall have [***] with respect to all Development activities for Cancer Product [***], provided that such [***] shall be consistent with the terms and conditions of this Agreement and (ii) [***] with respect to all Development activities for Cancer Product [***] shall be limited to [***] in accordance with the responsibilities assigned to [***] as set forth in [***].

(h) Cancer Development Decision-Making [***]. [***], subject to Section 16.1(f), (i) [***] shall have [***] with respect to all Development activities for Cancer Product [***], provided that such [***] shall be consistent with the terms and conditions of this Agreement and (ii) [***] with respect to all Development activities for Cancer Product [***] shall be limited to [***] in accordance with the responsibilities assigned to [***] as set forth in [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(i) Cancer Development Decision-Making [***]. [***], except as otherwise expressly provided in this Agreement (and at all times subject to Section 16.1(f)), all matters regarding the Development of the Cancer Product [***], and all [***], shall be decided by [***]. [***], subject to the Joint Cancer Development Plan, (i) Alder would have final decision-making authority with respect to Tactical Matters for Development activities for the Co-Developed Product for which Alder is responsible and (ii) BMS would have final decision-making authority with respect to Tactical Matters for Development activities for the Co-Developed Product for which BMS is responsible. For clarity, neither Party would have the right unilaterally to amend or modify the Joint Cancer Development Plan (including the Initial Joint Development Plan) for the Co-Developed Product and any such amendment or modification would require JEC approval. Disputes with respect to the Joint Cancer Development Plan would be resolved as set forth in Section 16.1, with neither Party having final decision-making authority.

3.6 Approval of Clinical Studies for Co-Developed Product; Sole-Funded Clinical Studies for Co-Developed Product.

(a) The Parties will through the procedures set forth in Section 3.5(d) review any Clinical Trials and any non-clinical studies [***] for the Co-Developed Product proposed by either Party for inclusion in the Joint Cancer Development Plan (in each case, a “Proposed Study”). Each Proposed Study (including the Study Information) shall be presented to the JEC. “Study Information” means with respect to a Clinical Trial for the Co-Developed Product, the Clinical Trial protocol, the primary and secondary endpoints, comparators or combination therapy, estimated number of patients, and statistical power, the responsibility for the conduct of the Clinical Trial (i.e., will specify whether co-op groups or CROs will be used, whether the study will be handled as an investigator-sponsored study, or whether it will be managed and sponsored by a Party), the estimated out-of-pocket costs for the Clinical Trial, and any other material matters pertaining to the Clinical Trial (e.g., data analysis plan) that can reasonably be ascertained at such time, and with respect to a non-clinical study [***] for the Co-Developed Product, means the study protocol including the study design, procedures, comparators (if any) and objectives.

(b) The JEC shall review such Study Information and the proposed rationale for such Proposed Study, and if the JEC representatives of the non-proposing Party (i) reasonably believe that the conduct of such Proposed Study is likely to have a material adverse impact on the product profile, label, safety or efficacy and/or commercial value of the Cancer Product in such non-proposing Party’s territory (subject to Sections 16.1(f) and 16.1(g)), or (ii) where Alder is the proposing Party, where BMS reasonably believes that the conduct of such Proposed Study is likely to have an Adverse Impact (subject to Section 16.1(f)), then the proposing Party shall not have the right to carry out the Proposed Study (in either case, a “Rejected Study”).

(c) If, however, the JEC approves the Proposed Study as a joint study, and no objection is raised at such time pursuant to Section 3.6(b), then such Clinical Trial or non-clinical study ([***]) will be included in the Joint Cancer Development Plan and the costs for the Clinical Trial or study would be shared as Cancer Development Costs and the Cancer Development Budget would be amended to include such costs. In such event, BMS shall have no right thereafter to claim that it believes that the conduct of such Clinical Trial or non-clinical study ([***]) is likely to have an Adverse Impact.

(d) In the case where the JEC does not approve such Proposed Study as one to be included in the Joint Cancer Development Plan, but where no objection is raised at such time pursuant to Section 3.6(b), then the proposing Party may proceed independently with the Proposed Study (i.e., in

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

accordance with the Study Information reviewed by the JEC) at its sole risk and expense (including sole responsibility and liability for any claims made by patients participating in such Clinical Trial) (such Clinical Trial being a “Sole-Funded Study”). In such event, BMS shall have no right thereafter to claim that it believes that the conduct of such Sole-Funded Study is likely to have an Adverse Impact. For clarity, a Party may only proceed with a Sole-Funded Study as set forth above in accordance with the Study Information reviewed by the JEC, and if there are any significant modifications or revisions with respect to the Study Information for a Proposed Study, then such revised Proposed Study shall be subject to the same review by the JEC as set forth above.

(e) In the case where the Sole-Funded Study is a study designed for and having the objective of supporting approval for labeling changes for a new indication or expanded indications for the Co-Developed Product (such clinical trial being a “New Indication Sole-Funded Study”), the non-funding Party may not use the results of such New Indication Sole-Funded Study to support a filing for Regulatory Approval for a change in the labeling for such new indication or expanded indication for the Co-Developed Product in its Territory (the Cancer Territory in the case of BMS and the Alder Cancer Territory in the case of Alder) unless the non-funding Party [***], it being understood, however, that the non-funding Party would have all rights to submit such data to the applicable Regulatory Authority where required by Regulatory Authorities in its Territory for safety purposes. If such Sole-Funded Study is not a New Indication Sole-Funded Study, the non-funding Party shall have all access to the results of such study, through the JEC or JDC, as the case may be, and shall have the right to file such results where required by the Regulatory Authorities in its Territory (the Cancer Territory in the case of BMS and the Alder Cancer Territory in the case of Alder) for safety purposes, but shall have no right to file any data resulting from such study in support of initial Regulatory Approval or Regulatory Approval for labeling changes for a new indication or expanded indications for the Co-Developed Product in its Territory unless and until it [***].

3.7 Cancer Development Costs.

(a) Sharing of Cancer Development Costs. Subject to the rest of this Section 3.7 and the other terms and conditions of the Agreement, the Cancer Development Costs for the Co-Developed Product shall be shared by the Parties as follows: Alder shall bear [***] of all such Cancer Development Costs, and BMS shall bear [***] of all such Cancer Development Costs. For clarity, [***]. Subject to Section 13.2 and 13.14, it is understood that once a given study or trial is set forth in an approved Joint Cancer Development Plan, and its associated costs are included in the Cancer Development Budget, each Party is obligated to conduct and fund such study or trial, on the timetable set forth in the Joint Cancer Development Plan, unless mutually agreed upon by the Parties to the contrary. For clarity, each Party shall have the right to use all results of the activities conducted under the Joint Cancer Development Plan in support of the Development and Commercialization of the Co-Developed Product in its respective Territory.

Subject to Section 3.7(f), BMS and Alder shall share Cancer Development Costs incurred in excess of the amount budgeted therefor for a given year under the Cancer Development Budget for those Clinical Trials that are part of the then-approved Joint Cancer Development Plan, without the approval of the JDC or JEC (such as, for example, cost overruns as a result of faster patient recruitment or a need to contract with more sites to ensure timely completion of a Clinical Trial). The Parties shall reconcile the Cancer Development Costs they have incurred to reflect the allocation of Cancer Development Costs set forth in Section 3.7(a) according to the procedure in Section 8.2.

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(b) FTE Records and Calculations; Adjustments to FTE Rate. Each Party shall record and account for its FTE efforts that are included in Cancer Development Costs shared under this Agreement, and shall report such FTE effort to the JDC on a quarterly basis.

(c) Other Expenses. Any costs and expenses incurred by a Party for Development activities for the Co-Developed Product that do not fall within the definition of Cancer Development Costs shall be borne [***] unless the Parties agree in writing otherwise. For clarity: (i) all costs relating to Development activities undertaken by or for Alder for the Co-Developed Product which are not Cancer Development Costs shall be [***], and (ii) all costs relating to Development activities undertaken by or for BMS for the Co-Developed Product which are not Cancer Development Costs shall be [***], including all costs relating to Development activities conducted solely for the purposes of seeking Regulatory Approval(s) of a Co-Developed Product in Japan.

(d) Determination and Charging of Cancer Development Costs. As part of the process of producing each annual Joint Cancer Development Plan and Cancer Development Budget, and any updates thereto, the Parties shall determine the internal personnel and other resources and out-of-pocket expenditures ([***]) required for the Development of the Co-Developed Product in [***] for the applicable year and for each quarter within such year. All such internal personnel and resources will be expressed in terms of FTEs and the budgeted cost calculated using the FTE Rate (with such budgets to be based on the expected actual FTE work performed on a pure efforts basis (i.e., on the basis of the actual hours worked on the project)). For purposes of sharing of Cancer Development Costs, each Party shall record, account and charge to Cancer Development Costs only its actual FTE effort for the Development of Co-Developed Product on such pure efforts basis, provided that such efforts relate to budgetary line item activities to which it has been assigned under the Cancer Development Plan or are otherwise approved by the JDC.

(e) Reporting and Audit of Development Costs.

(i) FTEs shall be charged to Cancer Development Costs at the applicable FTE Rates. Each Party shall calculate, and maintain records of, actual Development FTE hours worked and Cancer Development Costs incurred by it in the same manner as used by it for other products which it has developed or which are under development by it. Out-of-pocket costs will be charged based on actual expenses incurred. Each Party will be responsible for accounting for the costs associated with the Clinical Trials conducted by it pursuant to the Cancer Development Plan.

(ii) Each Party shall report to the other Party within [***] after the end of each [***] with regard to the Cancer Development Costs incurred by it during such [***]. Such report shall specify in reasonable detail all FTE hours and actual out-of-pocket cost on a line item basis consistent with the budgetary line items set forth in the applicable Joint Cancer Development Plan and Cancer Development Budget. For the purposes of this Section 3.7(e)(ii), out-of-pocket costs shall be deemed to be incurred by a Party upon the earlier of (1) such Party’s receipt of an invoice for the applicable amount from the applicable Third Party with respect to such costs for goods and services received and (2) such Party’s payment of the applicable Third Party; provided that with respect to out-of-pocket costs deemed incurred pursuant to (1), if such Party does not pay to such Third Party the full amount of such invoice, then such Party shall promptly notify the other Party and reflect in its next report pursuant to this Section 3.7(e) an appropriate adjustment to its Cancer Development Costs.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(iii) Each Party shall have the right, at reasonable times and upon reasonable prior notice, to audit the other Party’s records as provided in Section 8.15 to confirm the accuracy of the other Party’s costs and reports with respect to Cancer Development Costs that are shared under this Agreement. Each Party shall, to the extent the result of such audit reveals that any reconciliatory payment is due from such Party to the other Party, promptly make such reconciliatory payment to the other Party after receiving the result of such audit. In the case where BMS is required to make a reconciliatory payment, BMS shall make such payment to AlderHoldings.

(f) Overruns with Respect to Cancer Development Costs. If the actual total Cancer Development Costs (which, for clarity, include Manufacturing Costs included in such Cancer Development Costs) for a Clinical Trial (over the life of such trial) provided for in the Joint Cancer Development Plan (as amended in accordance with Section 3.5(d)) exceed, or during the course of the Clinical Trial information becomes known such that such Clinical Trial’s Development Costs are reasonably expected to exceed, those set forth in the Cancer Development Budget for such Clinical Trial in such plan, then (i) the Parties (through the JDC) shall discuss and address such overrun and (ii) unless otherwise agreed by mutual Party Written Consent or approval of the JEC each Party shall, notwithstanding such overrun, continue to bear its share of such Cancer Development Costs attributable to such Clinical Trial in excess of such budget (“Excess Development Costs”) as set forth in Section 3.7(a), except that to the extent such Excess Development Costs are Negligently Incurred Development Costs (as defined below) in which event the Party conducting such Clinical Trial shall be solely responsible for, and shall bear, all of such Negligently Incurred Development Costs. As used herein, “Negligently Incurred Development Costs” means with respect to a Clinical Trial any portion of Excess Development Costs in respect of such Clinical Trial that (A) [***], (B) is attributable to the negligence with respect to the conduct or oversight of such Clinical Trial of the Party responsible for the conduct of such Clinical Trial and (C) is not approved by mutual Party Written Consent or approval of the JEC. For sake of clarity, [***] shall not be considered negligence by such Party in the conduct of any Clinical Trial or other Development activity. The Parties shall use Diligent Efforts, as appropriate, to mitigate any cost overrun.

3.8 Limitations on Development.

(a) During the Term, [***], neither [***] nor any of its Affiliates shall, directly or through any Third Party, sponsor, conduct or cause to be conducted, otherwise assist in, supply [***] for use in connection with, fund or otherwise support any Clinical Trial (including without limitation any investigator sponsored studies) using [***].

(b) During the Term, [***], neither [***] nor any of its Affiliates shall, directly or through any Third Party, sponsor, conduct or cause to be conducted, otherwise assist in, supply [***] for use in connection with, fund or otherwise support any Clinical Trial (including without limitation any investigator sponsored studies) using [***].

3.9 Standards of Conduct. BMS shall perform, and shall ensure that its Affiliates, Sublicensees and Third Party contractors perform, the Development activities with respect to the Licensed Product and Co-Developed Product in good scientific manner, and in compliance in all material respects with the requirements of Applicable Law. Alder shall perform, and shall ensure that its Affiliates, licensees and Third Party contractors perform, the Development activities with respect to the Cancer Product in good scientific manner, and in compliance in all material respects with the requirements of Applicable Law. As applicable, each Party shall use Diligent Efforts to carry out the tasks assigned to it under the Joint Cancer Development Plan in a timely and effective manner.

3.10 Licensed Product Development Expenses. Without limiting Alder’s obligations under Section 15.1, as between BMS and Alder, BMS shall be responsible for all costs and expenses incurred by BMS and its Affiliates and Sublicensees in connection with the Development of Licensed Products. Except as expressly specified in this Agreement (including without limitation in Sections 2.11, 3.3, 4.1(a), 6.3, 6.4 and

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6.8), BMS shall not be responsible for the reimbursement of Alder (by submitting payment to AlderHoldings) for costs and expenses incurred by Alder and its Affiliates in connection with activities for the Development of Licensed Product, except to the extent that the Parties may agree in writing after the Effective Date and where such activities to be undertaken by Alder, and the projected reimburseable costs with respect to such activities, are specifically approved in writing in advance by BMS.

3.11 Adverse Event Reporting. As set forth in Section 4.7, BMS shall enter into a Safety Data Exchange Agreement with Alder that will govern the obligations of each Party with respect to safety, adverse events, and other related matters concerning Licensed Product and Cancer Product.

3.12 Subcontractors. Each Party may perform any of its Development obligations under this Agreement through one or more subcontractors or consultants, provided that (a) such Party remains responsible for the work allocated to such subcontractors and consultants as it selects with respect to Licensed Compound and Product, (b) the subcontractor undertakes in writing obligations of confidentiality and non-use regarding Confidential Information, that are substantially the same as (although may be shorter in duration than, provided that such duration shall not be less than [***] from the effective date of the written obligation) those undertaken by the Parties pursuant to Article 12 hereof, and (c) the subcontractor agrees in writing to assign (or to exclusively license, with the right to sublicense) to the subcontracting Party all intellectual property developed in the course of performing any such Development work that is necessary or useful for the research, Development, manufacture, use, sale and/or Commercialization of the applicable Licensed Compounds and/or Products. A Party may also subcontract work on terms other than those set forth in this Section 3.12, with the prior approval of the JEC.

4. REGULATORY MATTERS

4.1 Regulatory Matters for Licensed Product for Licensed Field.

(a) Regulatory Filings. BMS shall have sole responsibility for preparing and submitting all Regulatory Materials for Licensed Products in the Licensed Field in the Licensed Territory, including but not limited to preparing and submitting all MAAs for Licensed Products in the Licensed Field in the Licensed Territory. Alder shall cooperate fully with BMS and provide to BMS all Alder Know-How and all rights of reference (including all required rights of reference with respect to any Regulatory Materials (including Approvals) or DMF (and any data contained therein and/or component thereof) for any Cancer Product), in each case as may be reasonably requested by BMS, in order to support any Regulatory Materials for Licensed Products in the Licensed Field in the Licensed Territory and interactions with any Regulatory Authority in connection with Development and/or Regulatory Approval of Licensed Products in the Licensed Field in the Licensed Territory. With respect to Alder Know-How in the possession of a Third Party or rights of reference to Regulatory Materials or DMFs in the possession of a Third Party, BMS shall reimburse Alder for all out-of-pocket expenses incurred by Alder to the extent required in order to provide such Alder Know-How or rights of reference to BMS. Alder represents and warrants that as of the Signing Date all such Regulatory Materials and DMFs with respect to Licensed Compound and Product are in the possession of Alder and are not in the possession of any Third Party. With respect to Alder Know-How that pertains to the Cancer Product in the Cancer Field or rights of reference to Regulatory Materials or DMFs for the Cancer Product in the Cancer Field, in each case which is provided to BMS at a time when BMS has not exercised the Option or the Option has expired without exercise, BMS shall reimburse Alder for all out-of-pocket expenses incurred by Alder with respect to providing such Alder Know-How or rights of reference to BMS.

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(b) Ownership of Regulatory Materials for Licensed Field. BMS will own all Regulatory Materials that it files for Licensed Products in the Licensed Field in the Licensed Territory and all such Regulatory Materials shall be submitted in the name of BMS (or its Affiliate or Sublicensee, as applicable). Upon request by BMS, AlderHoldings shall transfer and assign to BMS all of Alder’s right, title and interest to the IND(s) that have been submitted as of the Effective Date for the Licensed Product in the Licensed Field. Alder shall notify the applicable Regulatory Authorities in writing that it is transferring such IND(s) for Licensed Product in the Licensed Field to BMS. BMS shall grant Alder [***] and [***] in order to allow Alder (i) perform any activities [***] or (ii) support [***] Cancer Products in the Cancer Field in the Alder Cancer Territory and interactions with [***] in connection with [***] of Cancer Products in the Cancer Field in the Alder Cancer Territory.

(c) Decision-Making. BMS shall have final decision-making authority with respect to regulatory matters with respect to Licensed Product in the Licensed Field (including without limitation, the content of any regulatory filing or dossier, pharmacovigilance reports, patient risk management strategies and plans, Core Data Sheet, labeling, safety, and the decision to file any MAA, in each case with respect to Licensed Product in the Licensed Field), provided that BMS complies with the Safety Data Exchange Agreement or Exhibit F, whichever is applicable.

(d) Separate IND and MAA for Licensed Product in Licensed Field and Cancer Product. It is understood and agreed that unless the Parties agree in writing otherwise, separate INDs and separate MAAs will be filed by BMS for the Licensed Product in the Licensed Field in the Licensed Territory and by Alder for the Cancer Product in the Cancer Field in the Alder Cancer Territory. In the case where Alder has submitted prior to the Effective Date a single IND for Clinical Trials in both the Licensed Field and the Cancer Field the Parties shall cooperate in establishing separate INDs for the Licensed Field and the Cancer Field.

(e) Access to Material Filings and Communications. Upon reasonable request by Alder (and to the extent necessary and solely for the purpose to support any Regulatory Materials for Cancer Products in the Cancer Field in the Alder Cancer Territory and interactions with any Regulatory Authority in connection with Development and/or Regulatory Approval of Cancer Products in the Cancer Field in the Alder Cancer Territory), BMS shall provide Alder with access (including electronic access as available and applicable) to: (i) material Regulatory Materials filed by BMS with respect to any Licensed Product, (ii) material written or electronic communications received by BMS from a Regulatory Authority with respect to the Development or Commercialization of any Licensed Product and (iii) summaries (to the extent available) of material oral communications between BMS and a Regulatory Authority with respect to the Development or Commercialization of any Licensed Product. Without limiting other provisions of this Agreement, upon reasonable request by BMS (and to the extent necessary and solely for the purpose to support any Regulatory Materials for Licensed Products in the Licensed Field in the Licensed Territory and interactions with any Regulatory Authority in connection with Development and/or Regulatory Approval of Licensed Products in the Licensed Field in the Licensed Territory), Alder shall provide BMS with access (including electronic access as available and applicable) to: (i) material Regulatory Materials filed by Alder with respect to any Cancer Product, (ii) material written or electronic communications received by Alder from a Regulatory Authority with respect to the Development or Commercialization of any Cancer Product and (iii) summaries (to the extent available) of material oral communications between Alder and a Regulatory Authority with respect to the Development or Commercialization of any Cancer Product.

4.2 Regulatory Matters for Cancer Product for Cancer Field Where BMS Does Not Exercise Option.

(a) Responsibility, Ownership of Regulatory Materials and Decision-Making. Subject to the other terms and conditions of this Agreement, in the case where BMS has not exercised the Option or the Option has expired without exercise, as between the Parties: (i) Alder shall have sole

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responsibility for preparing and submitting all Regulatory Materials for any Cancer Product in the Cancer Field in the Alder Cancer Territory, including, but not limited to preparing all reports required in connection with the submission of any MAA for any Cancer Product in the Cancer Field in the Alder Cancer Territory, (ii) AlderHoldings will own all Regulatory Materials for Cancer Product in the Cancer Field in the Alder Cancer Territory and (iii) Alder shall have final decision-making authority with respect to regulatory matters with respect to Cancer Product in the Cancer Field (including without limitation, the content of any regulatory filing or dossier, pharmacovigilance reports, patient risk management strategies and plans, Core Data Sheet, labeling, safety, and the decision to file any MAA, in each case with respect to Cancer Product in the Cancer Field); provided that Alder complies with the Safety Data Exchange Agreement or Exhibit F, whichever is applicable.

(b) Sharing of Regulatory Information. In the case where BMS has not exercised the Option or the Option has expired without exercise, and Alder is pursuing the Development of the Cancer Product for the Cancer Field, the Parties shall share on a timely basis through the JDC (and as applicable through a subcommittee thereof) significant correspondence to or from a Regulatory Authority (including submissions of Regulatory Materials) that are relevant to both the Licensed Product in the Licensed Field as well as the Cancer Product in the Cancer Field. The Parties shall share and review such correspondence to or from a Regulatory Authority to assure that the Parties provide consistent responses to the Regulatory Authorities with respect to inquiries relevant to both the Licensed Product in the Licensed Field and the Cancer Product in the Cancer Field.

4.3 Regulatory Matters for Co-Developed Product.

(a) Regulatory Filings. Alder and BMS shall cooperate through the applicable Committee in the drafting and review of all submissions of Regulatory Materials (including any supplements or modifications thereto) to the FDA and EMEA (including the preparation of an electronic submission of a MAA to the FDA and EMEA) for Co-Developed Product. For Co-Developed Product in the U.S., as between the Parties, Alder shall have responsibility for submitting all Regulatory Materials, which shall be owned by AlderHoldings, and shall be the regulatory contact with the FDA. For Co-Developed Product in the Cancer Territory, BMS shall have responsibility for submitting all Regulatory Materials, which shall be owned by BMS, and shall be the regulatory contact with the applicable Regulatory Authorities. Accordingly, in each case with respect to the Co-Developed Product, each Party shall have a right to review through the applicable Committee the content and subject matter of, and strategy for, each MAA to be filed by or on behalf of the other Party with the FDA and EMEA, all correspondence submitted by or on behalf of the other Party to the FDA and EMEA related to clinical trial design, all proposed product labeling (including the final FDA or EMEA approved labeling) and post-Regulatory Approval labeling changes. Each Party shall promptly provide the other with copies of all significant written or electronic communications received by it or on its behalf from or sent by it or on its behalf to the FDA or EMEA with respect to obtaining and maintaining Regulatory Approvals for the Co-Developed Product.

(b) Regulatory Meetings. Each Party (Alder with respect to the FDA and BMS with respect to the EMEA) shall provide the other Party with prior notice with respect to all meetings, conferences and discussions (including advisory committee meetings and any other meeting of experts convened by the FDA or EMEA concerning any topic relevant to Co-Developed Product, as well as product labeling and post-Regulatory Approval product labeling discussions) with the FDA or EMEA for the Co-Developed Product. Such notice shall be provided within two (2) Business Days after such Party receives notice of the scheduling of such meeting, conference, or discussion (or within such shorter period as may be necessary in order to give such other Party a reasonable opportunity to participate in such meetings, conferences and discussions). Such other Party shall be entitled to be present at, and to participate in, all such meetings, conferences or discussions. Alder’s and BMS’ respective members of the JDC shall use reasonable efforts to agree in advance on the scheduling of such meetings and on the objectives to be accomplished at such meetings, conferences, and discussions and the agenda for the meetings, conferences, and discussions with the FDA and EMEA. To the extent practicable, each Party (Alder with respect to the FDA and BMS with respect to the EMEA) shall also include the other Party in any unscheduled, ad-hoc meetings, conferences and discussions with the FDA or EMEA concerning any pending IND, MAA or any material regulatory matters relating to the Co-Developed Product.

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(c) Sharing of Regulatory Data; Common Database. Each Party shall provide to the other Party on a timely basis copies of all significant pre-clinical and clinical data compiled in support of a Regulatory Material with respect to Co-Developed Product (via electronic copies of such data in a form that may be analyzed and manipulated by the other Party). If deemed appropriate by the JDC, the Parties will establish a common database to be shared by the Parties for the receipt, investigation, recordation, communication and exchange (as between the Parties) of data arising from Clinical Trials for Co-Developed Product. The Parties shall agree upon guidelines and procedures for such common database that shall be in accordance with, and enable the Parties and their Affiliates to fulfill their reporting obligations under Applicable Law and shall be consistent with relevant ICH guidelines. The Parties’ costs incurred in connection with receiving, investigating, recording, reviewing, communicating and exchanging such data shall be included as an element of Cancer Development Costs to the extent agreed to by the JDC and specifically identifiable to or reasonably allocable to the Development of Co-Developed Product. All data shared by BMS with Alder pursuant to this Section 4.3(c) shall be provided by BMS in a format that is compatible with Alder’s SAS software. It shall be acceptable for Alder to provide data shared pursuant to this Section 4.3(c) to BMS in a format created by Alder’s SAS software.

(d) Ownership of Clinical Data; Rights of Reference. All clinical data and reports related to Clinical Trials conducted under the Joint Cancer Development Plan (and for which the Parties shared Cancer Development Costs) for Co-Developed Product shall be owned by AlderHoldings and licensed to BMS pursuant to Section 7.4 and 7.9. Each Party shall have the right to cross reference, file or incorporate by reference any Regulatory Material (including Approvals) or DMF for any Co-Developed Product (and any data contained therein and/or any component thereof) in order to support any Regulatory Materials for Co-Developed Product and in interactions with any Regulatory Authority in connection with Development and/or Regulatory Approval of Co-Developed Product; provided however, that the use of the results of a Sole-Funded Study by the non-funding Party shall be subject to Section 3.6. Each Party shall cooperate with the other, as may be reasonably necessary, in obtaining Regulatory Approvals for Co-Developed Product, including providing necessary documents or other materials Controlled and possessed by such Party, as are required by Applicable Law to obtain Regulatory Approvals for Co-Developed Product, in each case in accordance with the terms and conditions of this Agreement.

(e) Pricing and Reimbursement Approvals. BMS will be solely responsible for all pricing and reimbursement approval proceedings relating to the Co-Developed Product in the Cancer Territory. Alder will be solely responsible for all pricing and reimbursement approval proceedings relating to the Co-Developed Product in the Alder Cancer Territory.

(f) Complaints. Each Party will develop and implement, and shall abide by, (a) a policy for handling complaints that may be made, alleged or threatened by a Third Party with respect to the use of any promotional, advertising, patient information, communication and educational materials by a Party relating to a Co-Developed Product in a country in the Cancer Territory (if such Party is BMS) or the Alder Cancer Territory (if such Party is Alder), and (b) a policy for handling and investigating complaints made, alleged or threatened by a Third Party with respect to the manufacturing, handling or storage of a Co-Developed Product.

4.4 Product Withdrawals and Recalls. If any Regulatory Authority (a) threatens, initiates or advises any action to remove any Product from the market in a country or (b) requires or advises Alder, BMS, their Affiliates, or their (sub)licensees to distribute a “Dear Doctor” letter or its equivalent regarding use of such Product in a country; then Alder or BMS, as applicable, shall notify the other Party of such event within [***] after such Party becomes aware of the action, threat, advice or requirement (as applicable). BMS shall be responsible for the recall or withdrawal of a Licensed Product or Cancer Product that BMS, its Affiliates, or its Sublicensees distributed. Alder shall be responsible for the recall or withdrawal of a Cancer Product that Alder, their Affiliates, or their licensees (excluding BMS, its Affiliates, or its Sublicensees) distributed.

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4.5 Notice of Regulatory Action. If any Regulatory Authority takes or gives notice of its intent to take any regulatory action with respect to any activity of such Party pursuant to this Agreement, which regulatory action could reasonably be expected to materially adversely affect any Development or Commercialization activities with respect to a Product in the Territory, then such Party shall promptly notify the other Party of such notice or action. The applicable operating Committee shall have the right to review any responses that pertain to the affected Product.

4.6 Adverse Event Reporting. As between the Parties and in accordance with Section 4.7: (i) until transfer of the IND for Licensed Product in the Licensed Field to BMS, Alder shall be responsible for the timely reporting to the appropriate Regulatory Authorities of all Adverse Events and any other information concerning the safety of the Licensed Product in the Licensed Field, (ii) after transfer of the IND for Licensed Product in the Licensed Field to BMS, BMS shall be responsible for the timely reporting to the appropriate Regulatory Authorities of all Adverse Events and any other information concerning the safety of the Licensed Product in the Licensed Field, (iii) if BMS has not exercised the Option or the Option has expired without exercise, Alder shall be responsible for the timely reporting to the appropriate Regulatory Authorities of all Adverse Events and any other information concerning the safety of the Cancer Product in the Cancer Field, (iv) after BMS exercises the Option, Alder shall be responsible for the timely reporting to the appropriate Regulatory Authorities in the Alder Cancer Territory of all Adverse Events and any other information concerning the safety of the Co-Developed Product in the Cancer Field and (v) after BMS exercises the Option, BMS shall be responsible for the timely reporting to the appropriate Regulatory Authorities in the Cancer Territory of all Adverse Events and any other information concerning the safety of the Co-Developed Product in the Cancer Field.

4.7 SDEA; Global Pharmacovigilance Database. Subject to the terms of this Agreement, and within two (2) months after the Effective Date, Alder and BMS (under the guidance of their respective Pharmacovigilance Departments, or equivalent thereof) shall define and finalize the responsibilities of the Parties to protect patients and promote their well-being in connection with the use of the Licensed Compounds and Products. These responsibilities shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication, and exchange (as between the Parties) and regulatory submission of Adverse Event reports, reports of exposure during pregnancy, and any other information concerning the safety of any Licensed Compound or Product. Such guidelines and procedures shall be in accordance with, and enable the Parties and their Affiliates to fulfill, local and international regulatory reporting obligations to Governmental Authorities. Furthermore, such agreed procedures shall be consistent with relevant ICH guidelines, except where said guidelines may conflict with existing local regulatory safety reporting requirements, in which case local reporting requirements shall prevail. Until such guidelines and procedures are set forth in a written agreement between the Parties (hereafter referred to as the “Safety Data Exchange Agreement”), the terms of Exhibit F shall apply. The Parties agree to the following and the Safety Data Exchange Agreement shall provide for the following: (i) BMS shall control the global pharmacovigilance database with respect to Licensed Product in the Licensed Field, (ii) in the case where BMS has exercised the Option, the Parties shall jointly control the global pharmacovigilance database for the Co-Developed Product and (iii) if BMS has not exercised the Option or the Option has expired without exercise, Alder shall control the global pharmacovigilance database with respect to Cancer Product in the Cancer Field. Following the execution of the Safety Data Exchange Agreement, Exhibit F shall have no further force or effect. The Party that is the owner of the Regulatory Approval for the applicable Product shall have the right to make the final decision with respect to any Adverse Event filing with a Regulatory Authority with respect to such Product in the event of a dispute and where a decision must be made in order to comply with applicable time filing requirements.

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5. COMMERCIALIZATION

5.1 Commercialization of Licensed Product in the Licensed Field. BMS shall be responsible for all Commercialization activities for Licensed Products in the Licensed Field in the Licensed Territory at its own cost and expense. BMS shall have the final decision-making authority for the operations and Commercialization strategies and decisions with respect to the Commercialization of Licensed Products in the Licensed Field in the Licensed Territory; provided that such decisions are not inconsistent with the express terms and conditions of this Agreement, including Article 2.

5.2 Commercialization of Cancer Product in the Cancer Field. If BMS has not exercised the Option or the Option has expired without exercise, (i) Alder shall be responsible for all Commercialization activities for Cancer Product in the Cancer Field in the Alder Cancer Territory at its own cost and expense and (ii) Alder shall have the final decision-making authority for the operations and Commercialization strategies and decisions with respect to the Commercialization of Cancer Product in the Cancer Field in the Alder Cancer Territory; provided that such decisions are not inconsistent with the express terms and conditions of this Agreement. In the case where BMS has exercised the Option, (x) Alder shall be responsible for [***] and Alder shall have [***] for the [***] with respect to [***], provided that such decisions are not inconsistent with the express terms and conditions of this Agreement and (y) BMS shall be responsible for [***] and BMS shall have [***] for the [***] with respect to [***], provided that such decisions are not inconsistent with the express terms and conditions of this Agreement. The Parties shall [***] their Commercialization activities with respect [***] through [***] accordance with [***].

5.3 Commercialization Plans.

(a) Commercialization Plan for Licensed Product in the Licensed Field. BMS shall establish plans for Commercialization of Licensed Product in the Licensed Field in each of the Major Markets in accordance with its normal business practices and consistent with the form and detail that BMS normally provides for its internal products at a similar stage and shall provide the final version of such commercialization plan to Alder for its review and comment. After establishment of the initial commercialization plan for Licensed Product in the Licensed Field, BMS shall update such commercialization plan [***] and provide such updated commercialization plan to Alder for its review and comment. BMS shall establish such other plans for Commercialization of the Licensed Products in other countries of the Territory in accordance with its normal business practices and shall include a summary of such plans in each update to Alder under this Section 5.3(a).

(b) Commercialization Plans for Cancer Product. In the case where BMS does not exercise the Option, Alder shall establish plans for Commercialization of Cancer Product in the Cancer Field in accordance with its normal business practices. In the case where BMS exercises the Option, (i) Alder shall establish a plan for Commercialization of [***] in [***] in accordance with its normal business practices and consistent with the form and detail that Alder normally provides for its internal products at a similar stage and shall provide the final version of such commercialization plan to BMS through the JCC for its review and comment and (ii) BMS shall establish plans for Commercialization of [***] in [***] in accordance with its normal business practices and consistent with the form and detail that BMS normally provides for its internal products at a similar stage and shall provide the final version of such commercialization plan to Alder through the JCC for its review and comment. After establishment of the initial commercialization plan for [***] as set

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forth above, (x) Alder shall update its commercialization plan [***] and provide such updated commercialization plan to BMS through the JCC for its review and comment and (y) BMS shall update its commercialization plan [***] and provide such updated commercialization plan to Alder through the JCC for its review and comment.

5.4 Diligent Commercialization. BMS shall use Diligent Efforts to Commercialize at least one Licensed Product in the Licensed Field in each country in the Major Markets for which it receives Approval. In addition, in the case where BMS exercises the Option BMS shall use Diligent Efforts to Commercialize at least one Cancer Product in the Cancer Field in each country in the Major Market in the Cancer Territory for which it receives Approval.

5.5 Commercialization Reports and Meetings.

(a) Commercialization Report for Licensed Product in the Licensed Field. [***] following Regulatory Approval for the Licensed Product in a Major Market country, BMS shall provide to Alder [***] a written report that summarizes the Commercialization activities performed by BMS, and its Affiliates and Sublicensees since the prior report by BMS.

(b) Commercialization Report for Co-Developed Product in the Cancer Field. In the case where BMS exercises the Option, (i) Alder shall provide to BMS, through the JCC, an annual written report that summarizes the Commercialization activities performed by Alder and its Affiliates and licensees, and the Parties shall meet to discuss such Commercialization activities, with respect to the Co-Developed Product in the Cancer Field in the Alder Cancer Territory; and (ii) BMS shall provide to Alder, through the JCC, an annual written report that summarizes the Commercialization activities performed by BMS and its Affiliates and Sublicensees, and the Parties shall meet to discuss such Commercialization activities, with respect to the Co-Developed Product in the Cancer Field in the Cancer Territory; in each case of clause (i) and (ii) the Parties shall meet and discuss such Commercialization activities through the JCC [***].

5.6 Standards of Conduct. Each Party shall perform, or shall ensure that its Affiliates, (sub)licensees and Third Party contractors perform, all Commercialization activities in a good scientific and ethical business manner and in compliance with applicable laws, rules and regulations (including but not limited to all applicable laws rules and regulations relating to off-label use). BMS and its Sublicensees (and their respective Affiliates) shall not knowingly promote or sell (or encourage or facilitate the sale of) (a) any Licensed Product for use in the Cancer Field other than the Co-Developed Product that has received Regulatory Approval in the Cancer Field in the Cancer Territory or (b) any Co-Developed Product for use in the Licensed Field. Alder and its licensees (and their respective Affiliates) shall not knowingly promote or sell (or encourage or facilitate the sale of) any Cancer Product (including Co-Developed Product) for use in the Licensed Field. BMS and its Sublicensees (and their respective Affiliates) shall not provide funding to or otherwise support continuing education programs for sales representatives and/or medical professionals in which information is provided about the use of (i) any Licensed Product for use in the Cancer Field other than the Co-Developed Product that has received Regulatory Approval in the Cancer Field in the Cancer Territory or (ii) any Co-Developed Product in the Licensed Field. Alder and its licensees (and their respective Affiliates) shall not provide funding to or otherwise support continuing education programs for sales representatives and/or medical professionals in which information is provided about the use of any Cancer Product (including Co-Developed Product) in the Licensed Field. Each Party represents that it has established or will establish, and shall follow, its own internal policies, procedures and standards for promotion, clinical trials, Medical Education Activities and other sales and marketing activities for the Products in their respective applicable Territory, to ensure compliance with Applicable Laws. Each Party also agrees to implement and follow such procedures, policies and standards as may be agreed upon between the Parties as may be necessary with respect to the Cancer Product in the Cancer Field if BMS exercises the Option.

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5.7 Tracking of Sales of Licensed Product and Cancer Product.

(a) The Parties recognize the possibility that customers or other Third Parties may purchase a Cancer Product (which has received Regulatory Approval for and is sold for use in the Cancer Field) and use the Cancer Product off-label in the Licensed Field in the Alder Cancer Territory (such use being the “Off-label Use of Cancer Product”). The Parties also recognize the possibility that customers or other Third Parties may purchase a Licensed Product (which has received Regulatory Approval for and is sold for use in the Licensed Field) and use such Licensed Product off-label in the Cancer Field in the Licensed Territory (such use being the “Off-label Use of Licensed Product”). In order to realize the intent of the Parties under this Agreement, in the case where both Licensed Product for use in the Licensed Field and Cancer Product for use in the Cancer Field are sold in the same Major Market country in the Alder Cancer Territory, upon the request of either Party, the Parties through the JEC will put in place a process and methodology for the tracking of sales of such Licensed Product and Cancer Product to determine the extent of Off-label Use of Cancer Product and Off-label Use of Licensed Product. For this purpose, the Parties shall [***] with respect to such use of the Licensed Product and Cancer Product [***]. Once implemented, such process and methodology shall be implemented [***]. To the extent that Licensed Product is determined by the JEC to be used for the treatment of indications in the Cancer Field in a Major Market country in the Alder Cancer Territory (i.e., a country where BMS is not granted commercialization rights for the Cancer Field) at a level [***], BMS shall pay to Alder [***]. To the extent that Cancer Product is determined by the JEC to be used for the treatment of indications in the Licensed Field in a Major Market country in the Alder Cancer Territory at a level [***], Alder shall pay to BMS [***]. “[***]” as used in this Section 5.7 means the applicable gross sales less the sum of [***][***], in each case for the applicable Licensed Product or Cancer Product.

(b) Disputes. If the JEC cannot agree: (i) on the process and methodology to be implemented by the Parties in tracking sales of Cancer Products and Licensed Products; (ii) on the extent of Off-label Use of Cancer Product or Off-label Cancer Product and/or the extent to which such [***] set forth above; (iii) on the extent of Off-label Use of Licensed Product or Off-label Licensed Product and/or the extent to which such [***] set forth above; and/or (iv) the amount [***] payable by one Party to the other as set forth above; then, in each case, at the election of either Party, such dispute shall be [***] resolved through [***] in accordance with Section 16.2.

6. MANUFACTURING

6.1 Overview. Except as otherwise set forth in this Agreement (including without limitation as set forth in Section 6.4) or as the Parties may otherwise agree in writing, each Party shall be separately responsible for the manufacture of Licensed Compound and Product under this Agreement as follows:

(a) for clinical supply, (i) Alder shall be responsible for (and shall have final decision-making authority with respect to) the manufacture of Licensed Compound for use in the manufacture of Cancer Product for use in the Alder Cancer Territory, and for the manufacture of the Cancer Product for use

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in the Alder Cancer Territory, provided that in the case where BMS has exercised the Option, such responsibility and authority of Alder shall be limited to the manufacture of the Licensed Compounds and Co-Developed Product for use in the U.S. Co-Developed Product Development and BMS shall assume responsibility for (and shall have final decision-making authority with respect to) the manufacture of Licensed Compound (for use in the manufacture of Co-Developed Product) and/or Co-Developed Product for all other uses in the Cancer Territory, (ii) BMS will be responsible for (and shall have final decision-making authority for) the manufacture of Licensed Compound and Licensed Product for use in the Licensed Field in the Licensed Territory, (iii) notwithstanding the foregoing clauses (i) and (ii), Alder shall use Diligent Efforts to supply to BMS, until June 30, 2011, ALD518 and ALD518 LF Product for use by BMS in those [***] studies and Phase 2 Clinical Trials set forth in the Initial Licensed Field Development Plan, to the extent set forth in Section 6.4, and (iv) the Parties shall discuss through the JMC and JEC the possibility for either Party to otherwise supply to the other Party Licensed Compound and/or Product for the other Party’s needs in connection with the Development of the Product; and

(b) for commercial supply, (i) Alder shall be solely responsible (and shall have final decision-making authority with respect to) the manufacture of Licensed Compound for use in the manufacture of Cancer Product for use in the Cancer Field in the Alder Cancer Territory, and for the manufacture of the Cancer Product for use in the Cancer Field in the Alder Cancer Territory, (ii) BMS shall be solely responsible (and shall have final decision-making authority with respect to) the manufacture of Licensed Compound and Licensed Product for use in the Licensed Field in the Licensed Territory and (iii) in the case where BMS has exercised the Option, BMS shall be solely responsible (and shall have final decision-making authority with respect to) the manufacture of Licensed Compound for use in the manufacture of Co-Developed Product for use in the Cancer Territory, and for the manufacture of the Co-Developed Product for use in the Cancer Territory.

In the case where either Party supplies Licensed Compound and/or Co-Developed Product to the other Party, the Parties shall (x) establish and maintain a Joint Manufacturing Plan as set forth in Section 6.7 and (y) enter into a separate supply agreement (including provisions for forecasting, ordering, delivery and inspection) and a quality agreement, each containing customary provisions for such supply (subject to Section 6.4).

6.2 Coordination of Manufacturing Activities. The Parties shall cooperate with one another and coordinate their efforts through the JMC with respect to the manufacture of Licensed Compound and Co-Developed Product in accordance with this Article 6 and the other terms and conditions of this Agreement. The Parties shall discuss a mutually beneficial arrangement for the harmonized manufacture of Co-Developed Product and Licensed Compound used in the manufacture of Co-Developed Product consistent with the principles set forth in Section 6.1. If either Party makes a change with respect to the manufacture of a Licensed Compound or Product by such Party or on its behalf and such change is reported to a Regulatory Authority, then such Party shall notify the other Party about such change in advance of the date that it reports such change to the applicable Regulatory Authority and shall promptly provide the other Party with a copy of the report filed with such Regulatory Authority with respect to such change.

6.3 Transfer of Manufacturing Technology.

(a) Existing Process. Promptly following the Effective Date, Alder shall transfer to BMS (or a Third Party manufacturer designated by BMS in accordance with Section 6.5) all Alder Know-How and Alder Materials (including without limitation the Master Cell Bank for the expression of ALD518) in AlderHoldings’ or its Affiliate’s possession and Control that are necessary or reasonably useful for BMS or such Third Party manufacturer to replicate the process employed by [***] pursuant to the [***] as of the Effective Date to manufacture ALD518 (such process, the “Existing Process”), to fully enable BMS or its Third Party manufacturer to manufacture ALD518 using the Existing Process and the Master Cell Bank provided by Alder to BMS. Alder shall cooperate with and provide assistance as reasonably requested by BMS in the transfer of such manufacturing technology for the Existing Process to

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

BMS or its Third Party manufacturer, and to enable BMS or its Third Party manufacturer to use such manufacturing technology to manufacture ALD518. Subject to Section 6.3(b), upon request by BMS, Alder shall provide to BMS other Alder Material (in addition to the Master Cell Bank as set forth above) in Alder’s possession and Control necessary or useful for BMS to develop and obtain regulatory approval for the process for the manufacture of ALD518.

(b) Future Process.

(i) Alder or BMS may engage a Third Party contractor (the “Third Party Contractor”) to develop or optimize a process for manufacturing ALD518 that is more efficient than the Existing Process (such more efficient process being developed or optimized through the use of such Third Party Contractor being the “Future Process”). As of the Effective Date, Alder has engaged [***] pursuant to the [***] with respect to the optimization of a Future Process for Alder.

(ii) In the case where Alder is the contracting party with such Third Party Contractor, if BMS desires for Alder to (1) transfer to BMS (or a Third Party manufacturer designated by BMS in accordance with Section 6.5) Alder Know-How and/or Alder Materials (including without limitation Master Cell Bank for the expression of ALD518) in AlderHoldings’ or its Affiliate’s possession and Control that are necessary or reasonably useful for BMS or such Third Party manufacturer to use and replicate a particular Future Process to manufacture ALD518 (such Know-How and Materials, the “Alder Future Process Know-How”), for use by BMS as set forth below or (2) to supply to BMS, solely in accordance with Section 6.4(a), ALD518 manufactured through the use of a particular Future Process (such ALD518, “Future Process ALD518”) and Alder agrees to provide such supply to BMS in accordance with Section 6.4(a), BMS shall provide Alder with written notification of such desire and, unless Alder does not agree to supply Future Process ALD518 in accordance with Section 6.4(a), shall reimburse Alder for fifty percent (50%) of all past and future documented out-of-pocket costs and expenses incurred by Alder in connection with the development or optimization of such Future Process by the applicable Third Party Contractor (the “Alder Third Party Contractor Costs”). For purposes of BMS determining whether it desires to use a particular Future Process or to receive pursuant to Section 6.4(a) Future Process ALD518, Alder will disclose to BMS the manufacturing efficiencies obtained using such Future Process, without disclosing sufficient detail for BMS to use such Future Process (except as set forth in this Section 6.3(b)(ii) after BMS agrees to reimburse and share the out-of-pocket costs incurred by Alder as specified in the preceding sentence). In addition, Alder will disclose to BMS the amount of the Alder Third Party Contractor Costs incurred as of that time and the projected future Alder Third Party Contractor Costs. In the case where BMS desires to receive and use the Alder Future Process Know-How or to receive supply of Future Process ALD518 pursuant to Section 6.4(a), the Parties shall agree on a further work plan with the Third Party Contractor and a budget for the projected Alder Third Party Contractor Costs to be incurred by Alder on a going forward basis, provided that if the Parties fail to agree on such work plan and budget, Alder may continue as it may elect at its discretion working independently with the Third Party Contractor without any obligation to provide the applicable Alder Future Process Know-How to BMS or to provide any Future Process ALD518 to BMS. Within [***] of receiving BMS’ notification of its desire to obtain the Alder Future Process Know-How or of the Parties reaching agreement with respect to Alder supplying Future Process ALD518 to BMS pursuant to Section 6.4(a), Alder shall provide BMS with an invoice setting forth the amount equal to 50% of the Alder Third Party Contractor Costs prior to the date of BMS’ notification, and BMS shall pay to Alder such invoiced amount within [***] after receiving such invoice from Alder (the “BMS Initial Payment”). Alder shall transfer to BMS or its Third Party manufacturer (engaged by BMS in accordance with Section 6.5 below) the Alder Future Process Know-How as soon as practicable after BMS the later of: (A) Alder’s receipt of the BMS Initial Payment or (B) BMS’ written request that Alder commence such a transfer. For as long as the Third Party Contractor

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

engaged by Alder is developing the Future Process (in accordance with the work plan and budget agreed to between Alder and BMS), within [***] after Alder incurs any Alder Third Party Contractor Costs, Alder shall provide BMS with an invoice for 50% of such Alder Third Party Contractor Costs, and BMS shall pay to AlderHoldings such invoiced amount within [***] after receiving each invoice. From time to time after the initial transfer of Alder Future Process Know-How to BMS, Alder shall transfer to BMS or its Third Party manufacturer (engaged by BMS in accordance with Section 6.5 below), at BMS’ expense, any newly developed Alder Future Process Know-How, so long as BMS complies with its payment obligations in the immediately preceding sentence. BMS shall [***] have the right to use the Alder Future Process Know-How [***] to manufacture and have manufactured through such Third Party manufacturer Licensed Compounds and/or Licensed Products for use [***] and [***], and [***] or [***].

(iii) In the case where BMS is the contracting party with such Third Party Contractor, if Alder desires for BMS to transfer to Alder any Know-How and/or cell line for the manufacture of ALD518 in BMS’ possession and Control that are necessary or reasonably useful for Alder (or its Third Party manufacturer) to use and replicate a particular Future Process to manufacture ALD518 (such Know-How and cell lines, the “BMS Future Process Know-How”), for use by Alder as set forth below, Alder shall provide BMS with written notification of such desire and shall reimburse BMS for [***] of all past and future documented out-of-pocket costs and expenses incurred by BMS in connection with the development of the BMS Future Process Know-How by the Third Party Contractor (the “BMS Third Party Contractor Costs”). For purposes of Alder determining whether it desires to use a particular Future Process, BMS will disclose to Alder the manufacturing efficiencies obtained using such Future Process, without disclosing sufficient detail for Alder to use such Future Process (except as set forth in this Section 6.3(b)(iii) after Alder agrees to reimburse and share the out-of-pocket costs incurred by BMS as specified in the preceding sentence). In addition, BMS will disclose to Alder the amount of the BMS Third Party Contractor Costs incurred as of that time and the projected future BMS Third Party Contractor Costs. In the case where Alder desires to receive and use the BMS Future Process Know-How, the Parties shall agree on a further work plan with the Third Party Contractor and a budget for the projected BMS Third Party Contractor Costs to be incurred by BMS on a going forward basis, provided that if the Parties fail to agree on such work plan and budget, BMS may continue as it may elect at its discretion working independently with the Third Party Contractor without any obligation to provide the applicable BMS Future Process Know-How to Alder. Within [***] of receiving Alder’s notification of its desire to obtain the BMS Future Process Know-How, BMS shall provide Alder with an invoice setting forth the amount equal to [***] of the BMS Third Party Contractor Costs prior to the date of Alder’s notification, and Alder shall pay to BMS such invoiced amount within [***] after receiving such invoice from BMS (the “Alder Initial Payment”). BMS shall transfer to Alder or its Third Party manufacturer the BMS Future Process Know-How as soon as practicable after BMS receives the Alder Initial Payment. Thereafter, for as long as the Third Party Contractor engaged by BMS is developing the Future Process (in accordance with the work plan and budget agreed to between BMS and Alder), BMS shall provide Alder with invoices within [***] after the end of each calendar quarter setting forth the amount equal to [***] of the BMS Third Party Contractor Costs incurred by BMS during the preceding calendar quarter (with the first of such invoice also including the amount equal to [***] of the costs and expenses so incurred by BMS in the calendar quarter during which Alder provided BMS such notification to the extent such amount was not included in the Initial Payment), and Alder shall pay to BMS such invoiced amount within [***] after receiving each invoice. From time to time after the initial transfer of BMS Future Process Know-How to Alder, BMS shall transfer to Alder or its Third Party manufacturer, at Alder’s expense, any newly developed BMS Future Process Know-How, so long as Alder complies with its payment

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

obligations in the immediately preceding sentence. Alder shall [***] have the right to use the BMS Future Process Know-How [***] to manufacture and have manufactured ALD518 for use for the manufacture of Cancer Product [***], and [***] or [***].

(c) In the case where BMS selects a Selected LF Backup Compound, Alder shall transfer to BMS (or a Third Party manufacturer designated by BMS in accordance with Section 6.5) all Alder Know-How and Alder Materials (including without limitation one or more production strains for the expression of such Selected LF Backup Compound) in AlderHoldings’ or its Affiliate’s possession and Control that are necessary or reasonably useful for BMS or such Third Party manufacturer to replicate the processes employed by Alder to manufacture such Selected LF Backup Compound, to fully enable BMS or its Third Party manufacturer to manufacture such Selected LF Backup Compound using the production strain for such Selected LF Backup Compound that is provided by Alder to BMS. Alder shall cooperate with and provide assistance as reasonably requested by BMS in the transfer of such manufacturing technology to BMS or its Third Party manufacturer, and to enable BMS or its Third Party manufacturer to use such manufacturing technology to manufacture such Selected LF Backup Compound. Subject to Section 6.3(b), upon request by BMS, Alder shall provide to BMS other Alder Material (in addition to the production strain as set forth above) in AlderHoldings’ or its Affiliate’s possession and Control that is necessary or useful for BMS to develop and obtain regulatory approval for the process for the manufacture of such Selected LF Backup Compound.

(d) In the case where [***] Alder has selected or subsequently selects a Selected Cancer Backup Compound, Alder shall transfer to BMS (or a Third Party manufacturer designated by BMS in accordance with Section 6.5) all Alder Know-How and Alder Materials (including without limitation one or more production strains for the expression of such Selected Cancer Backup Compound) in AlderHoldings’ or its Affiliate’s possession and Control that are necessary or reasonably useful for BMS or such Third Party manufacturer to replicate the processes employed by Alder to manufacture such Selected Cancer Backup Compound, to fully enable BMS or its Third Party manufacturer to manufacture such Selected Cancer Backup Compound using the production strain for such Selected Cancer Backup Compound that is provided by Alder to BMS. Alder shall cooperate with and provide assistance as reasonably requested by BMS in the transfer of such manufacturing technology to BMS or its Third Party manufacturer, and to enable BMS or its Third Party manufacturer to use such manufacturing technology to manufacture such Selected Cancer Backup Compound. Subject to Section 6.3(b), upon request by BMS, Alder shall provide to BMS other Alder Material (in addition to the production strain as set forth above) in AlderHoldings’ or its Affiliate’s possession and Control that is necessary or useful for BMS to develop and obtain regulatory approval for the process for the manufacture of Selected Cancer Backup Compound.

(e) For clarity, nothing in this Section 6.3 shall be construed as requiring Alder or its Affiliates to transfer to BMS any of the Alder Mab Express^® Technology except to the extent necessary to use Alder Materials provided by Alder to express ALD518, Selected LF Backup Compound and/or any Backup Compound being evaluated for selection by BMS as a Selected LF Backup Compound (and/or, as applicable in the case where BMS exercises the Option, Selected Cancer Backup Compound). For clarity, nothing in this Section 6.3 shall be construed as requiring Alder or its Affiliates to transfer to BMS any of the Alder ABS Technology.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

6.4 Clinical Supply of Licensed Compound and Product.

(a) Supply of ALD518 From [***] and [***].

(i) Promptly following the Effective Date the Parties shall establish through the JMC a plan for the manufacture of clinical supply of ALD518 for use in [***] studies and Phase 2 Clinical Trials in each case in connection with the Development of the Product (which [***] studies and Phase 2 Clinical Trials with respect to the Licensed Product are listed in the Initial Licensed Field Development Plan), consistent with the principles set forth in this Section 6.4(a). As of the Effective Date, Alder intends to obtain its supply of ALD518 for use in Phase 2 Clinical Trials of the Cancer Product in the Cancer Field from [***] pursuant to the [***] and is willing to use Diligent Efforts to obtain from [***] pursuant to the [***] supply of some or all of BMS’ requirements for ALD518 from the Effective Date until June 30, 2011 solely for use in the [***] studies and Phase 2 Clinical Trials listed in the Initial Licensed Field Development Plan and solely to the extent that [***] is willing and indicates that it is able to provide, pursuant to the [***] and bearing in mind that lead time will be needed to obtain such supply, the quantities required by BMS on or about the delivery date specified by BMS, taking into account [***]’s ability to supply Alder pursuant to the [***] with ALD518 for use in Phase 2 Clinical Trials of the Cancer Product in the Cancer Field; provided that for the supply during the period from December 31, 2010 to June 30, 2011 (x) the Parties will work together in good faith to attempt to provide BMS with an opportunity to obtain such supply directly from [***] under an agreement between [***] and BMS (as opposed to through Alder under the [***]) and (y) if the direct supply by [***] under clause (x) is not obtained, then ALD518 will continue to be supplied to BMS by Alder pursuant to the [***] as set forth above, except that BMS (1) shall be responsible for providing all personnel for the performance of quality and release procedures, person in plant activities, supply chain management, management of fill and finish, and stability studies, in each case with respect to the supply of ALD518 and (2) shall be responsible for the cost of providing such personnel. BMS shall be solely responsible for obtaining its own supply of ALD518 for use in the [***] and Phase 2 Clinical Trials listed in the Initial Licensed Field Development Plan to the extent that [***] is not willing or indicates that it is not able to provide such supply as described in the previous sentence or to the extent that such supply would be needed after June 30, 2011. BMS shall also be solely responsible for obtaining its own supply of ALD518 for use after June 30, 2011 or for use in other non-clinical studies or Phase 2 Clinical Trials of Licensed Product in the Licensed Field (i.e. those non-clinical studies that are not the [***] studies listed in the Initial Licensed Field Development Plan and those Phase 2 Clinical Trials not listed in the Initial Licensed Field Development Plan) or, after BMS’ exercise of the Option, for use in Clinical Trials of the Cancer Product in the Cancer Field with respect to the Cancer Territory. BMS shall share with Alder its plan for obtaining such supply and provide Alder with a reasonable opportunity to comment thereon. The Parties shall promptly enter into a separate supply agreement and a quality agreement with respect to such supply by Alder to BMS of ALD518 manufactured by [***] pursuant to the [***], provided that: (i) the terms and conditions of such agreements between Alder and BMS shall be consistent with the terms and conditions of the [***] and any and all quality or other agreements with respect thereto; (ii) Alder hereby disclaims any warranty with respect to the quantities of ALD518 so supplied by Alder to BMS, and BMS shall be solely responsible for determining whether such ALD518 meets the acceptance criteria under the [***]; (iii) BMS shall promptly notify Alder if any such ALD518 supplied by Alder to BMS does not meet such acceptance criteria in a manner to allow Alder to reject such ALD518 under the [***]; (iv) Alder shall, at BMS’ reasonable request, enforce the provisions on product warranty and acceptance and rejection under the [***] upon [***] on behalf of BMS for ALD518 supplied by Alder to BMS; and (v) BMS shall pay to Alder a supply price for such clinical supply of ALD518 to BMS by Alder under this Section 6.4(a) equal to Alder’s Manufacturing Cost for such ALD518 supplied to BMS (to be paid in accordance with such supply agreement to be entered into between the Parties, which shall provide for Alder to invoice BMS at the time that Alder receives an invoice from [***] and shall require BMS to pay to AlderHoldings the amount invoiced by Alder within [***] after Alder’s invoice).

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(ii) As an alternative or a complement to any ALD518 supplied by Alder pursuant to the [***] as set forth in Section 6.4(a)(i), BMS shall have the right to request to obtain supply of ALD518 manufactured by [***] pursuant to the [***] during part or all of the period from January 1, 2011 until June 30, 2011 (such period, the “[***] Period”), solely for use in the [***] studies and Phase 2 Clinical Trials listed in the Initial Licensed Field Development Plan. Upon such written request, Alder shall use Diligent Efforts to obtain from [***] pursuant to the [***] supply of some or all of BMS’ requirements for ALD518 during the portion of the [***] Period specified in such request (bearing in mind that lead time will be needed to obtain such supply) solely for use in the [***] studies and Phase 2 Clinical Trials listed in the Initial Licensed Field Development Plan and solely to the extent that [***] is willing and indicates that it is able to provide, pursuant to the [***], the quantities required by BMS on or about the delivery date specified by BMS (which delivery dates shall be within such portion of the [***] Period), taking into account [***] ability to supply Alder pursuant to the [***] with ALD518 for use in Clinical Trials of the Cancer Product in the Cancer Field. If BMS makes such request (by providing written notice of such request to Alder), BMS shall then be responsible for making the payments set forth in Section 6.3(b)(ii) (which amount shall not exceed [***] with respect to the Future Process optimized by [***]) and the Alder Future Process Know-How developed by [***] shall be provided to BMS in accordance with Section 6.3(b)(ii). In the event of such election by BMS, the Parties shall enter into a separate supply and quality agreement with respect to such supply that has the terms specified above in Section 6.4(i) as modified to apply to [***] and the [***] rather than [***] and the [***]. For clarity, BMS shall pay to Alder a supply price for such clinical supply of ALD518 to BMS by Alder under this Section 6.4(a)(ii) equal to Alder’s Manufacturing Cost for such ALD518 supplied to BMS.

(b) As of the Effective Date, Alder intends to obtain its supply of Cancer Product comprising ALD518 for use in Phase 2 Clinical Trials in the Cancer Field from [***] pursuant to the [***] and is willing to use Diligent Efforts to obtain from [***] pursuant to the [***] supply of some or all of BMS’ requirements for ALD518 LF Product from the Effective Date until June 30, 2011, solely to the extent that such ALD518 LF Product can be made from ALD518 procured by Alder on BMS’ behalf pursuant to Section 6.4(a), solely for use in the [***] studies and Phase 2 Clinical Trials listed in the Initial Licensed Field Development Plan and solely to the extent that [***] is willing and indicates that it is able to provide, pursuant to the [***], the quantities required by BMS on or about the delivery date specified by BMS, taking into account [***]’s ability to supply Alder pursuant to the [***] with Cancer Product comprising ALD518 for use in Phase 2 Clinical Trials in the Cancer Field. BMS shall be solely responsible for obtaining its own supply of ALD518 LF Product for use in the [***] and Phase 2 Clinical Trials listed in the Initial Licensed Field Development Plan to the extent that [***] is not willing or indicates that it is not able to provide such supply as described in the previous sentence or to the extent that such supply would be needed after June 30, 2011. BMS shall also be solely responsible for obtaining its own supply of Licensed Product for use after June 30, 2011 or for use in other non-clinical studies or Phase 2 Clinical Trials in the Licensed Field (i.e. those non-clinical studies that are not the [***] studies listed in the Initial Licensed Field Development Plan and those Phase 2 Clinical Trials not listed in the Initial Licensed Field Development Plan). After BMS’ exercise of the Option, BMS shall be solely responsible for obtaining its own supply of Co-Developed Product for use in Clinical Trials in the Cancer Field with respect to the Cancer Territory. BMS shall share with Alder its plan for obtaining such supply and provide Alder with a reasonable opportunity to comment thereon. The Parties shall promptly enter into a separate supply agreement and a quality agreement with respect to such supply by Alder to BMS of ALD518 LF Product manufactured by [***] pursuant to the [***], provided that: (i) the terms and conditions of such agreements between Alder and BMS shall be consistent with the terms and conditions of the [***] and any and all quality or other agreements with respect thereto; (ii) Alder hereby disclaims any warranty with respect to the quantities of ALD518 LF Product so supplied by Alder to BMS, and BMS shall be solely responsible for determining whether such ALD518 LF Product meets the acceptance criteria under the [***]; (iii) BMS shall promptly notify Alder if any

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

such ALD518 LF Product supplied by Alder to BMS does not meet such acceptance criteria in a manner to allow Alder to reject such ALD518 LF Product under the [***]; (iv) Alder shall, at BMS’ reasonable request, enforce the provisions on product warranty and acceptance and rejection under the [***] upon [***] on behalf of BMS for ALD518 LF Product supplied by Alder to BMS; and (v) BMS shall pay to Alder a supply price for such clinical supply of ALD518 LF Product to BMS by Alder under this Section 6.4(b) equal to Alder’s Manufacturing Cost for such ALD518 LF Product supplied to BMS (to be paid in accordance with such supply agreement to be entered into between the Parties, which shall provide for Alder to invoice BMS at the time that Alder receives an invoice from [***] and shall require BMS to pay to AlderHoldings the amount invoiced by Alder within [***] after Alder’s invoice).

(c) As set forth in Section 6.1, Alder shall be responsible for the manufacture of Licensed Compound (for use in the Co-Developed Product) and Co-Developed Product for use in the U.S. Co-Developed Product Development. For clarity, each Party shall be responsible for the manufacture of Licensed Compound (for use in the Co-Developed Product) and Co-Developed Product for use in any Sole-Funded Study of such Party. In order to facilitate obtaining Regulatory Approval in the Cancer Territory for the Co-Developed Product, it is recognized that it may be desirable for BMS to obtain supply of Licensed Compound (for use in the Co-Developed Product) and Co-Developed Product for Phase 3 Clinical Trials as well as for Commercialization in the Cancer Territory from the same source of supply as that used by Alder for the Alder Cancer Territory (any Third Party that provides such supply to Alder shall be deemed an “Alder Cancer Supplier”). Accordingly, upon request by BMS, Alder shall cooperate with BMS with the objective of facilitating BMS’ entry into a supply agreement with one or more Alder Cancer Suppliers to which BMS would obtain supply of Licensed Compound (for use in the Co-Developed Product) and/or Co-Developed Product for Phase 3 Clinical Trials as well as for Commercialization in the Cancer Territory from such Alder Cancer Supplier; provided however, that Alder shall not be obligated to take any action and BMS shall not take any action that is reasonably likely to have an adverse effect on Alder’s ability to obtain supply of Licensed Compound (for use in the Co-Developed Product) and/or Co-Developed Product for Phase 3 Clinical Trials as well as for Commercialization in the Alder Cancer Territory from any Alder Cancer Supplier.

(d) Except as set forth above in this Section 6.4, each Party shall be responsible for establishing its own source of clinical supply of Licensed Compound and Product for use in the Development of Product in accordance with Section 6.1.

6.5 Third Party Manufacturing.

(a) BMS may exercise any of its manufacturing rights with respect to Licensed Compound and Licensed Product (and Alder may exercise any of its manufacturing rights with respect to Licensed Compound (for use in Cancer Product) and Cancer Product for use in the Cancer Field) through one or more Third Party manufacturers, provided that (a) the Third Party manufacturer undertakes in writing obligations of confidentiality and non-use regarding Confidential Information (including Alder Know-How received by such manufacturer under Section 6.3 above) that are substantially the same as (although may be shorter in duration than, provided that such duration shall not be less than [***] from the effective date of the written obligation) those undertaken by the Parties pursuant to Article 12 hereof and (b) the Third Party manufacturer agrees in writing to assign (or license) all intellectual property with respect to the Product or its manufacture developed in the course of performing any such manufacturing to the Party retaining such Third Party manufacturer.

(b) In the case where Cancer Product is being Developed and/or Commercialized, the Parties shall discuss through the JMC their respective selection of any Third Party manufacturer for Licensed Compound. In addition, in the case where BMS has exercised the Option and Cancer Product is being Developed and/or Commercialized, the Parties shall discuss through the JMC their respective selection of any Third Party manufacturer for Cancer Product.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

6.6 Use of Manufacturing Know-How. BMS and/or its Affiliates and Third Party manufacturer shall use any Alder Know-How transferred pursuant to Section 6.3 in accordance with the licenses granted in Section 7.4 and [***] for the purpose of manufacturing Products for uses permitted under this Agreement [***] (provided however, that, for the avoidance of doubt, such restriction shall not apply to the extent of any applicable exclusions in Article 12).

6.7 Joint Manufacturing Plan. In the case where either Party supplies Licensed Compound and/or Co-Developed Product to the other Party in accordance with Section 6.1, the Parties shall prepare through the JMC a manufacturing plan with respect to such supplied Licensed Compound and/or Co-Developed Product (the “Joint Manufacturing Plan”). As applicable, the then-current Joint Manufacturing Plan shall be updated [***], with the [***] updated Joint Manufacturing Plan being prepared by the JMC no later than two (2) months prior to [***] to which such [***] Joint Manufacturing Plan relates (i.e., [***]). The Joint Manufacturing Plan may be updated or amended more often as the Parties deem appropriate.

6.8 Changes to Production Strains. The Parties recognize that it may be necessary or desirable to make changes with respect to the production strain for a Collaboration Antibody for purposes of complying with any regulatory request or requirement, or for purposes of improving the production of such Collaboration Antibody. In the case where BMS desires that a change be made to the host strain or the expression vector for any production strain for a Collaboration Antibody, BMS shall notify Alder of such desire in writing. As soon as practicable after Alder receives such notification, except as provided in the next sentence, the Parties shall agree through the JMC upon a work plan for such production strain change setting forth the activities, timelines and budget [***] for such work (such work being the “Production Strain Work” and such plan being the “Production Strain Work Plan”). Notwithstanding the foregoing, where BMS proposes that changes be made to the production strain for a Co-Developed Product or Cancer Product, no such changes shall be made unless and until Alder also agrees as to such changes and the Parties agree to such Production Strain Work. As between the Parties, Alder shall be the Party responsible for the conduct of any Production Strain Work. BMS shall reimburse Alder on a rolling calendar quarter basis for Alder’s documented out-of-pocket costs and FTE costs (at the FTE Rate) incurred in the performance of any Production Strain Work in accordance with the applicable Production Strain Work Plan, provided that such out-of-pocket costs and FTE costs (i.e., the level of FTE effort) shall be in accordance with the approved Production Strain Work Plan (or an amendment thereto or as otherwise approved in writing by BMS in advance of being incurred). Any such Production Strain Work shall be overseen by the JMC or a subcommittee of the JMC formed for such purpose. Alder shall transfer to BMS any production strains generated for a Collaboration Antibody, and such production strains shall be deemed Alder Materials for all purposes under this Agreement, for use by BMS solely in accordance with and subject to the terms and conditions of this Agreement.

7. OWNERSHIP OF TECHNOLOGY AND LICENSES

7.1 Ownership of Information and Inventions. Subject to and without limiting this Section 7.1 and Sections 7.2 and 7.3, each Party (in the case of Alder, AlderHoldings) shall own all inventions and Information conceived, discovered, developed or otherwise made solely by or on behalf of it and/or its Affiliates and/or their respective employees agents and independent contractors in the course of conducting its activities under this Agreement (collectively, “Sole Inventions”). Subject to and without limiting Section 7.2 and 7.3, all inventions and Information that are conceived, discovered, developed or otherwise made jointly by employees, Affiliates, agents, or independent contractors of each Party in the course of performing activities under this Agreement (collectively, “Joint Inventions”) shall be owned jointly by the Parties (in the case of Alder, AlderHoldings) in accordance with joint ownership interests of co-inventors under U.S. patent laws (that is, each Party shall have full rights to license, assign and exploit such Joint Inventions (and any patents arising therefrom) anywhere in the world, without any requirement of gaining the consent of, or

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

accounting to, the other Party), subject to the licenses granted herein and subject to any other intellectual property held by such other Party. Inventorship shall be determined in accordance with U.S. patent laws. This Agreement shall be understood to be a joint research agreement under 35 U.S.C. §103(c)(3) entered into for the purpose of researching, identifying and developing Licensed Compounds and Products under the terms set forth herein.

7.2 Assignment of Ex-US Core Patents.

(a) Subject to Sections 7.2(c) and 13.9, AlderHoldings agrees to assign, and hereby does assign, one-half (1/2) of its right, title and interest in and to each Ex-US Core Patent to BMS so that, after such assignment, all Ex-US Core Patents shall be jointly owned by AlderHoldings and BMS. Within [***] after the Effective Date, BMS shall provide to AlderHoldings and AlderHoldings shall execute and deliver to BMS, at BMS’ expense, mutually agreed upon documents in the forms required in the applicable jurisdictions in order to perfect the assignment to BMS of the one-half (1/2) interest in and to the Ex-US Core Patents. For any Patents that become Ex-US Core Patents after the Effective Date (i.e., by virtue of being filed after the Effective Date), AlderHoldings shall assign, and hereby does assign effective as of the date that such Patent becomes an Ex-US Core Patent, one half (1/2) of its right, title and interest in and to each such Patents to BMS within [***] after such Patents are deemed to have become Ex-US Core Patents. BMS shall provide to AlderHoldings and AlderHoldings shall execute and deliver to BMS, at BMS’ expense, mutually agreed upon documents in the forms required in the applicable jurisdictions in order to perfect the assignment to BMS of the one-half (1/2) interest in and to any post-Effective Date Ex-US Core Patents. BMS shall be responsible for recording all such assignments and AlderHoldings shall reasonably cooperate, at BMS’ expense, with BMS’ efforts to do so. Notwithstanding such assignment, the Ex-US Core Patents shall remain Alder Patents.

(b) The assignment of Ex-US Core Patents to BMS pursuant to Section 7.2(a) shall in no way alter BMS’ royalty obligations with respect to such Ex-US Core Patents as set forth in this Agreement. An Ex-US Core Patent shall not become a Joint Patent or a BMS Patent by reason of the assignment contemplated by this Section 7.2, and shall at all times remain an Alder Patent which is a Core Patent. In addition, (i) Alder shall have the right to exploit, license and grant a security interest in (in all cases, subject to and without limiting the terms and conditions of this Agreement, including without limitation Alder’s obligations and the rights and licenses granted to BMS under this Agreement, to the extent then in effect) the Ex-US Core Patents without the consent of or a duty of accounting to BMS; (ii) BMS shall not practice the Ex-US Core Patents outside the scope of the licenses granted to BMS in Article 7; (iii) [***]; and (iv) BMS shall not have any rights with respect to the Ex-US Core Patents beyond the scope of the rights conferred pursuant to the licenses granted in Sections 7.4 and 7.9 (after exercise of the Option).

(c) For any Patents that cease to be Ex-US Core Patents at any time during the Term by virtue of an amendment of the claims, BMS shall assign, and hereby does assign effective as of the date that Alder notifies BMS in writing that such Patent is no longer an Ex-US Core Patent, its entire right, title and interest in and to each such Patent to AlderHoldings or AlderHoldings’ designee, and BMS appoints, effective as of the date of such notice from Alder, AlderHoldings as its attorney in fact solely to make such re-assignments and authorizes AlderHoldings to make such re-assignments. In each case, BMS shall execute and deliver to AlderHoldings a deed(s) of such assignment, in a mutually agreeable form, within [***] after the date such Patent ceased to be a Ex-US Core Patent. AlderHoldings shall be responsible for recording all such assignments and BMS and its successors and assigns shall (a) reasonably cooperate with AlderHoldings’ efforts to do so, including satisfying the assignment and recording requirements of relevant patent offices and (b) reimburse AlderHoldings for all expenses incurred by Alder in connection with this Section 7.2(c). In addition, BMS hereby grants Alder an exclusive, fully sublicensable license under its interest in each such former Ex-US Core Patent during the period from the date such Patent ceased to be a Ex-US Core Patent until such former Ex-US Core Patent is actually re-assigned to AlderHoldings.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

7.3 Security Interest in US Core Patents.

(a) Subject to Section 7.3(g), AlderHoldings hereby grants to BMS a first priority security interest and lien in and to each US Core Patent (the “Alder Collateral”) to secure the Alder Obligations. AlderHoldings hereby authorizes BMS to file financing statements, amendments, applications for registration, or other forms under the Uniform Commercial Code (“UCC”) or other Applicable Law describing the Alder Collateral and BMS’ security interest and lien therein and thereto. BMS shall be responsible at its sole expense for perfecting such security interest and lien and AlderHoldings shall reasonably cooperate, at BMS’ expense, with BMS’ efforts to do so.

(b) “Alder Obligations” shall mean any obligations of Alder pursuant to Section 11.1(a) and this Section 7.3. The occurrence of any of the following will be an “Alder Event of Default”: (i) any material default by Alder any Alder Obligations, but subject to the cure period in Section 13.3 and the dispute resolution process in Article 16, or (ii) the cessation of AlderBio’s business operations, the insolvency of AlderBio, and/or the institution by or against AlderBio of any proceeding under Title 11 (and in the case of any proceeding under Title 11 instituted against AlderBio, is not dismissed or stayed within [***]).

(c) Upon the occurrence of any Alder Event of Default and during any continuance thereof, BMS will have, in addition to all of the rights and remedies at law or in equity, the remedies of a secured party under the applicable UCC or other Applicable Law with respect to the Alder Collateral. Without limiting the generality of the foregoing, upon the occurrence of any Alder Event of Default and during any continuance thereof, BMS is specifically entitled, at its option, to foreclose upon, possess, retain, and own all right, title and interest in and with respect to all or any portion of the Alder Collateral. Alder acknowledges that BMS’ giving [***] notice is reasonable in any circumstances where BMS may be required by law to give Alder notice of any exercise of remedies with respect to the Alder Collateral pursuant to this Section 7.3. All the rights, privileges, powers and remedies of BMS are cumulative.

(d) [***], AlderHoldings will [***] or [***] any [***] or [***] in the [***] other than [***]. In addition, AlderHoldings shall not [***] of any [***] other than to [***];[***] only if [***]. For clarity, this Section 7.3 shall not limit Alder’s right to (1) exploit the [***] without a duty of accounting to BMS, or (2) grant licenses [***] in the Cancer Field without the consent of BMS; in each case subject to and without limiting the other terms and conditions of this Agreement. BMS acknowledges and agrees that any exercise of its remedies hereunder with respect to the Alder Collateral shall be made expressly subject to the rights of any licensee of the Alder Collateral in the Cancer Field.

(e) [***], AlderHoldings may grant junior security interest(s) in the Alder Collateral in connection with the issuance to Alder of one or more loan in an aggregate amount not to exceed $[***], provided that any such junior lien and any obligations secured thereby must be expressly subordinated to BMS’ lien and the Alder Obligations pursuant to an intercreditor and subordination agreement between BMS and the holder(s) of such junior security interest(s) that is in form and substance reasonably acceptable to BMS. Any such junior security interest shall be subject to and shall not limit the other terms and conditions of this Agreement.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(f) The security interest granted pursuant to this Section 7.3, and any assignment of US Core Patents to BMS upon the exercise of its remedies hereunder, shall in no way alter BMS’ royalty obligations with respect to such US Core Patents as set forth in this Agreement.

(g) Lien Termination. BMS’ security interest in the Alder Collateral shall automatically terminate upon the first to occur of the following: (i) termination of this Agreement or (ii) the [***] during which Alder and its Affiliates have recorded [***]. Upon such termination of BMS’ security interest, BMS shall promptly sign all documents reasonably necessary or useful to document that BMS no longer has any security interest in the Alder Collateral, shall cooperate with AlderHoldings to record the release and termination of such security interests, and shall reimburse AlderHoldings for all expenses incurred by Alder in connection with this Section 7.3(g). In the event BMS fails to sign and record such release and termination, BMS appoints AlderHoldings its attorney in fact to sign and record such release and termination and authorizes AlderHoldings to sign and record such release and termination. Alder’s foregoing appointment as BMS’ attorney in fact, coupled with an interest, is irrevocable.

7.4 Licenses to BMS. Subject to the terms and conditions of this Agreement, AlderHoldings hereby grants to BMS:

(i) an [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Technology to research, develop, make, [***] use, sell, offer for sale, export and import (including without limitation the [***] right to Develop and Commercialize) Licensed Products for the Licensed Field in the Licensed Territory;

(ii) an [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Technology to develop, make [***] use, sell to its Affiliates and Sublicensees, offer for sale to its Affiliates and Sublicensees, export and import Licensed Compounds (other than any Selected Cancer Backup Compounds) for use in Licensed Products for the Licensed Field in the Licensed Territory; and

(iii) an [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Mab Xpress^® Technology, to use the Alder Materials to make [***] ALD518 and Selected LF Backup Compounds for use in Licensed Products for the Licensed Field in the Licensed Territory and to use, sell, offer for sale, export and import such Licensed Products in the Licensed Field in the Licensed Territory.

For clarity, no rights or licenses are granted to BMS under this Section 7.4 or otherwise under this Agreement to use the Alder ABS Technology for any purpose.

For avoidance of doubt [***] licenses granted to BMS under this Section 7.4 [***]. For the further avoidance of doubt, notwithstanding the inclusion of Combination Products in the scope of Licensed Products, the licenses granted to BMS under this Section 7.4 shall not include any rights for BMS to research, Develop, make, have made, use, sell, offer for sale, otherwise Commercialize or import any proprietary compound of Alder (including any proprietary compound which Alder licenses to a Third Party) that is not a Licensed Compound or that is a Selected Cancer Backup Compound. The licenses granted to BMS under this Section 7.4 include a license to BMS to prosecute, maintain, defend and enforce the Alder Patents solely as set forth in Article 9. For clarity but without limiting Section 9.4, BMS does not have any right to prosecute, maintain, defend and enforce any claims in a Patent that claims the Alder Background Technology nor does it have any right to take any action (including without limitation the filing of any claim or suit) with respect to any misappropriation of the Alder Background Technology.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

7.5 Sublicensing by BMS.

(a) BMS shall have the right to sublicense any of the license rights granted to it under Section 7.4 and/or the license rights granted to it under Section 7.9 (but in the case of the license rights granted under Section 7.9, only after BMS exercises the Option), to any of its Affiliates and/or any Third Parties, provided that: (i) BMS shall [***], (ii) BMS shall cause such Affiliate, and such Sublicensee shall agree in writing, to be bound by and subject to all applicable terms and conditions of this Agreement in the same manner and to the same extent as BMS is bound thereby, and (iii) BMS shall remain responsible for the performance of this Agreement by such Affiliates and Sublicensees. In addition, the rights granted to BMS under Section 7.4 may be sublicensed or extended by BMS to Third Party contractors solely for purposes of having activities performed by such Third Party contractor on BMS’ (or its Affiliate’s or Sublicensee’s) behalf for the Development and/or Commercialization of Licensed Compound and/or Licensed Product, so long as BMS remains responsible for the performance of such activities by such contractors.

(b) In the case where BMS enters into a sublicense agreement with its Affiliate or Sublicensee pursuant to Section 7.5(a), BMS shall include in such sublicense agreement provisions such that (i) Alder shall have the same rights and license to all inventions and Information generated by such Affiliate or Third Party licensee to the same extent as if such invention or Information was generated by BMS and (ii) BMS (through such Affiliate or Sublicensee) can fully perform all of its obligations under this Agreement in the same manner and to the same extent as would be required if BMS performed the Development and Commercialization of Licensed Product rather than such Affiliate or Third Party licensee. In accordance with the foregoing, any such sublicense agreement shall include provisions requiring any such Affiliate or Third Party sublicensee to be bound by and subject to all applicable terms and conditions of this Agreement in the same manner and to the same extent as BMS.

7.6 Restriction With Respect to Selected Backup Compounds. Alder covenants (i) that it shall not Develop or Commercialize any Cancer Product for the Cancer Field containing a Selected LF Backup Compound, and that it shall not grant or otherwise transfer any rights to any Third Party to Develop or Commercialize any Cancer Product for the Cancer Field containing a Selected LF Backup Compound, without the prior written agreement of BMS and (ii) that it shall not Develop or Commercialize any product containing a Selected Cancer Backup Compound for use in the Licensed Field, and that it shall not grant or otherwise transfer any rights to any Third Party to Develop or Commercialize any product containing a Selected Cancer Backup Compound for use in the Licensed Field. BMS covenants (x) that it shall not Develop or Commercialize any Licensed Product for the Licensed Field containing a Selected Cancer Backup Compound, and that it shall not grant or otherwise transfer any rights to any Third Party to Develop or Commercialize any Licensed Product for the Licensed Field containing a Selected Cancer Backup Compound, without the prior written agreement of Alder and (y) that it shall not Develop or Commercialize any product containing a Selected LF Backup Compound for use in the Cancer Field, and that it shall not grant or otherwise transfer any rights to any Third Party to Develop or Commercialize any product containing a Selected LF Backup Compound for use in the Cancer Field.

7.7 Alder Retained Rights. Subject to and without limiting the terms and conditions of this Agreement, AlderHoldings retains (a) all rights to the Licensed Products and Cancer Products that are not expressly granted to BMS under this Agreement, including without limitation the exclusive right under the Alder Technology to research, develop, make, have made, use, sell, offer for sale, export and import (including without limitation the exclusive right to Develop and Commercialize) Cancer Product for the Cancer Field in the Alder Cancer Territory and (b) all rights to perform its obligations under this Agreement, including the rights to engage subcontractors in accordance with Section 3.12, 6.3 and 6.4 and to grant appropriate licenses under the Alder Technology and Alder Mab Xpress^® Technology to such subcontractors.

7.8 Licenses to Alder. Subject to the terms and conditions of this Agreement, BMS hereby grants to AlderHoldings and its Affiliates a [***] license, with the right to grant sublicenses subject to Section 7.11, under the BMS Technology to research, develop, make, have made, use, sell, offer for sale,

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

export and import Cancer Product for the Cancer Field in the Alder Cancer Territory. For clarity, the foregoing license shall not include any rights for Alder to research, develop, make, have made, use, sell, offer for sale, export or import any proprietary compound of BMS other than a Selected Cancer Backup Compound arising from a BMS Optimization Program. Subject to the terms and conditions of this Agreement, BMS hereby grants to AlderHoldings and its Affiliates a [***] license, with the right to grant sublicenses, to use and practice under for any purpose any BMS Improvement. The BMS Technology licensed to AlderHoldings and its Affiliates under this Section 7.8 shall not include any Patent that is licensed to BMS and/or its Affiliates by a Third Party under a license agreement unless (1) AlderHoldings agrees in writing (after being notified by BMS with respect to the substantive terms of the Third Party license agreement) that such licensed Patent is to being included in the definition of BMS Technology for purposes of being licensed to AlderHoldings and its Affiliates under this Section 7.8 and (2) AlderHoldings assumes (i) all payment obligations pursuant to such license agreement that are applicable to the Development or Commercialization of Cancer Product in the Cancer Field in the Alder Cancer Territory and (ii) other obligations of such license agreement that are applicable to sublicensees thereunder.

7.9 BMS Option for Cancer Field. Subject to the terms and conditions of this Agreement, AlderHoldings hereby grants to BMS [***] option (the “Option”) to obtain the licenses set forth below, which Option shall expire [***]. BMS has the right to exercise such Option by, at any time prior to [***], providing written notification to Alder and paying the payment due (if any) pursuant to Section 8.1(c). AlderHoldings hereby grants to BMS the following, effective upon such exercise, and subject to the terms and conditions of this Agreement:

(a) a [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Technology to co-Develop (together with AlderHoldings) Co-Developed Product in the Cancer Field, provided that (i) Alder shall have the [***] right [***] to file, obtain approvals for and hold Regulatory Materials for Co-Developed Product for the Cancer Field in the Alder Cancer Territory and (ii) BMS shall have the [***] right [***] to file, obtain approvals for and hold Regulatory Materials for Co-Developed Product for the Cancer Field in the Cancer Territory;

(b) [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Technology to sell, offer for sale and otherwise Commercialize Co-Developed Product for the Cancer Field in the Cancer Territory;

(c) [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Technology to make, have made, export and import (i) Co-Developed Product for sale in the Cancer Field in the Cancer Territory and (ii) ALD518 and/or Selected Cancer Backup Compound for use in Co-Developed Product for sale in the Cancer Field in the Cancer Territory; and

(d) [***] license, with the right to grant sublicenses in accordance with Section 7.5, under the Alder Mab Xpress^® Technology, to use the Alder Materials to make and have made ALD518 and Selected Cancer Backup Compounds for use in Co-Developed Product for the Cancer Field in the Cancer Territory.

For clarity, no rights or licenses are granted to BMS under this Section 7.9 to use the Alder ABS Technology for any purpose.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

For avoidance of doubt [***] licenses granted to BMS under this Section 7.9 [***]. For the further avoidance of doubt, the licenses granted to BMS under this Section 7.9 shall not include [***] [***]. The licenses granted to BMS under this Section 7.9 include a license to BMS to prosecute, maintain, defend and enforce the Alder Patents solely as set forth in Article 9. For clarity but without limiting Section 9.4, BMS does not have any right to prosecute, maintain, defend and enforce any claims of a Patent that claims the Alder Background Technology nor does it have any right to take any action (including without limitation the filing of any claim or suit) with respect to any misappropriation of the Alder Background Technology.

7.10 BMS Rights of Negotiation for Cancer Field.

(a) [***], AlderHoldings shall not seek to enter into and shall not enter into a License with a Third Party.

(b) [***], if BMS has exercised the Option and for so long as the licenses granted to BMS under Section 7.9 remain effective, in the event that AlderHoldings decides to pursue entering into a License, AlderHoldings shall follow the procedures set forth in Exhibit E, including notifying BMS in writing of such decision.

(c) [***], if BMS does not exercise the Option, and in the event that AlderHoldings decides to pursue entering into a License, AlderHoldings shall have the right to negotiate and enter into a License with one or more Third Parties without an obligation to negotiate with BMS with respect to such License; provided that if Alder generates or has generated on its behalf New Material Data (as defined below) for the Cancer Product in the Cancer Field, and if after such time Alder has not then entered into a License with a Third Party (and AlderHoldings desires to enter into a License agreement), AlderHoldings shall so notify BMS, and upon written notice from BMS of its interest to do so, within [***] of such AlderHoldings notice, the Parties will enter into good faith negotiations regarding the terms of and enter into an agreement pursuant to which AlderHoldings would enter into a License with BMS. It is understood that Alder may, contemporaneously with such negotiations with BMS, negotiate with one or more Third Parties with respect to a License. If BMS does not provide such written notice to AlderHoldings with such [***] period or if BMS provides such written election within such [***] period but the Parties do not agree on terms of and enter into the applicable License then AlderHoldings shall have the right to enter into a License with one or more Third Parties and shall not have any further obligation to negotiate with BMS with respect to a License. “New Material Data” means any results from any significant clinical studies of the Cancer Product in the Cancer Field in the Alder Cancer Territory, which results are generated by or on behalf of AlderHoldings or its Affiliates after the provision of and not included within, the data package supplied to BMS [***], in conjunction with its determination of whether or not to exercise the Option.

7.11 License to Third Party by Alder for Cancer Field. Subject to the other terms and conditions of this Agreement (including without limitation Section 7.10), in the case where AlderHoldings enters into a License with a Third Party, AlderHoldings shall include in such License agreement provisions such that (i) BMS shall have the same rights and license under this Agreement to all Information, Patent and other intellectual property rights generated by such Third Party licensee to the same extent as if such Information, Patent and other intellectual property rights were generated by AlderHoldings or its Affiliate and (ii) AlderHoldings (through such Third Party licensee) can fully perform all of its obligations under this Agreement in the same manner and to the same extent as would be required if Alder performed the development and commercialization of the Cancer Product rather than such Third Party licensee. In accordance with the foregoing, any such License agreement shall include provisions requiring any such Third Party licensee to be bound by and subject to all applicable terms and conditions of this Agreement in the same manner and to the same extent as Alder.

7.12 Third Party Licenses. The licenses granted to BMS in Sections 7.4 and 7.9 shall only be expanded to include sublicenses under intellectual property licensed to AlderHoldings by a Third Party after the Effective Date, and the license agreement under which such intellectual property is licensed to AlderHoldings shall only be deemed to be a “Third Party License”, if:

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(a) AlderHoldings discloses the substantive terms of such agreement to BMS for review a reasonable amount of time in advance of AlderHoldings’ anticipated entry into such a license agreement (which AlderHoldings hereby covenants to do); and

(b) BMS provides AlderHoldings with written notice, prior to AlderHoldings’ entry into such license agreement, in which (1) BMS consents to such license agreement being included in the definition of Third Party License, (2) BMS assumes (i) all payment obligations pursuant to such license agreement that are applicable to the Development or Commercialization of Licensed Product in the Licensed Field in the Licensed Territory or Cancer Product in the Cancer Field in the Cancer Territory and (ii) other obligations of such license agreement that are applicable to sublicensees thereunder, and (3) BMS acknowledges in writing that its sublicense under such license agreement is subject to the terms and conditions of such license agreement.

Any such written notice under Section 7.12(b) shall be based on and subject to (and shall only be effective upon) BMS’ review of the final version of the applicable Third Party license agreement (i.e., the version that is executed by Alder and the Third Party). For avoidance of doubt, under any such Third Party License Alder shall be permitted to sublicense the licensed intellectual property and transfer any licensed technology (including materials) to BMS for use by BMS under this Agreement.

7.13 Use of Alder Materials by BMS. The Alder Materials transferred to BMS under this Agreement (pursuant to Section 2.11, 3.3, 6.3 and 6.8), and any derivatives, parts or progeny thereof, shall only be used for purposes of the Development and Commercialization of ALD518, ALD518 LF Product, Selected LF Backup Compound and/or Licensed Product containing such Selected LF Backup Compound, and, if BMS exercises the Option, Co-Developed Product and/or any Selected Cancer Backup Compound, in all cases in accordance with and subject to the rights and licenses granted to BMS under this Agreement, and for no other purpose. BMS shall not transfer the Alder Materials (and any derivatives, parts or progeny thereof) to any Third Party, other than: (i) a Sublicensee (subject to all the terms and conditions of this Agreement) or (ii) a Third Party contractor or collaborator performing services (including without limitation manufacturing) on behalf of BMS or its Affiliates or Sublicensee in support of the permitted purposes set forth above under this Section 7.13, provided that such Third Party shall be subject to written obligations to BMS or its Affiliates or Sublicensee restricting the use and further transfer of such Alder Material (and any derivatives, parts or progeny thereof) by such Third Party contractor or collaborator. For avoidance of doubt, in no event will the Alder Materials (or any derivatives, parts or progeny thereof) be used by BMS for the expression of any protein other than a Collaboration Antibody. BMS and its Affiliates, Sublicensees and Third Party contractors shall not make any derivatives of any Alder Materials except for the sole purpose of the Development of the corresponding Collaboration Antibody and/or Commercialization of the Licensed Product containing such Collaboration Antibody or, in the case where BMS has exercised the Option, of the Co-Developed Product containing such Collaboration Antibody. Except and unless the Parties otherwise agree in writing, BMS shall not make any changes to the host strain or the expression vector for any production strains for the Collaboration Antibodies. In the case where BMS desires to make any change to the host strain or the expression vector for any production strain for a Collaboration Antibody, any such changes will be made only as set forth in Section 6.8.

7.14 Restriction on Licensing of BMS Improvement by BMS. Subject to and without limiting BMS’ other obligations under this Agreement, including but not limited to Article 12 and the restrictions and limitations on BMS’ right to use the Alder Background Technology under this Agreement, BMS agrees that it shall not grant a license to any Third Party under a BMS Improvement [***].

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8. PAYMENTS

8.1 Upfront Payment and Option Payment.

(a) Upfront Payment. In consideration for the licenses granted by AlderHoldings to BMS hereunder and Alder’s obligations hereunder to provide technology transfer and clinical supplies to BMS, BMS shall pay AlderHoldings a signing payment of [***]. Such payment shall be noncreditable and nonrefundable.

(b) Initial Option Payment. BMS shall pay AlderHoldings a license fee of [***], in consideration for the Option under Section 7.9 and BMS’ right of negotiation under Section 7.10 with respect to the Cancer Field. Such payment shall be noncreditable and nonrefundable.

(c) Subsequent Option Payment. [***] following the exercise of the Option by BMS, to the extent that the amount of the Alder Development Costs exceed [***], BMS shall pay to AlderHoldings [***] of such amount in excess of [***]. In the case where the Alder Development Costs exceed [***], AlderHoldings shall provide to BMS written notice of the amount of the Alder Development Costs on or before the Triggering Event. Following such notice, upon request by BMS, AlderHoldings shall promptly provide BMS with copies and/or access to documentation and records supporting the determination of such Alder Development Costs for review by BMS. “Alder Development Costs” means the reasonably documented FTE and direct out-of-pocket Development costs incurred by Alder during the period from the Effective Date to the date of BMS’ exercise of the Option that are directly related or reasonably allocable to the Development of the Cancer Product in the Cancer Field, calculated using the same principles as are used for Cancer Development Costs [***]. Alder shall provide BMS in writing Alder’s good faith estimate of the expected Alder Development Costs based on information then-available to Alder when it provides to BMS the data package referenced in clause (iii) of the Triggering Event definition in Article 1.

8.2 Reconciliation/Reimbursement of Cancer Development Costs. This Section 8.2 shall only apply in the case where BMS has exercised the Option. Within [***] after the end of each [***] during the Term, each Party shall submit to a finance representative of the other Party that is designated by such other Party (each such finance representative, the “Finance Contact”) a report that sets forth the Cancer Development Costs it incurred in such [***] and provides the other information described in Section 3.7(e)(ii). Additionally, within [***] after the end of each [***] during the Term, each Party shall provide the other Party with a preliminary, good faith estimate of its Cancer Development Costs that will be included in such report. If requested by either Party, any invoices or other supporting documentation for any payments to a Third Party that individually exceed $[***] shall be promptly provided. Within [***] after receipt of such reports, the Finance Contacts shall confer and agree on whether a reconciliation payment is due from one Party to the other, and if so, the amount of such reconciliation payment, so that the Parties share Cancer Development Costs in accordance with Section 3.7(a). The Party required to pay such reconciliation payment shall submit such payment to the other Party (in the case of Alder, AlderHoldings) within [***] after the Finance Contacts confer and agree with respect to such reconciliation payment.

8.3 Development Milestone Payments for Licensed Product in the Licensed Field.

(a) BMS shall pay to AlderHoldings the milestone payments set forth in Table 1 within [***] of the first achievement of the specified milestone event by BMS, its Sublicensees or their Affiliates for each Licensed Product in the Licensed Field, provided that (i) the payment amounts set forth in Table 1 shall only apply to an ALD518 LF Product, (ii) for any Licensed Product that is not an ALD518 LF Product

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

the milestone amount payable shall be [***] in the case where BLA Approval has been obtained or is still being pursued for the ALD518 LF Product at the time that such milestone event is achieved, and shall be [***] in the case where Development of ALD518 LF Product is discontinued before such milestone event is achieved and (iii) the payment amounts set forth in Table 1 shall be subject to Sections 8.3(b) and 8.3(c). For clarity, the milestone payments under this Section 8.3 shall not apply to Cancer Product in the Cancer Field.

Table 1

Event Column	Column 1		Column 2		Column 3
Milestone Event for Licensed Product other than Cancer Product	Milestone Payment For [***]		Milestone Payment for [***]		Milestone Payment for [***]
[***]		[***]		[***]		[***]
[***]		[***]		[***]		[***]
Initiation of Phase 3 Clinical Trial	$	40 million		[***]		[***]
[***]		[***]		[***]		[***]
[***]		[***]		[***]		[***]
[***]		[***]		[***]		[***]
[***]		[***]		[***]		[***]
[***]		[***]		[***]		[***]
[***]		[***]		[***]		[***]

(b) For clarity, (i) the milestone payment payable under Column 1 applies with respect to the first [***] for which the milestone event is achieved, regardless whether such [***] is the same as or different from the [***] for which any previous milestone event under Column 1 was achieved and (ii) the identity of the [***] and [***] shall be separately determined for each milestone event and each Licensed Product based solely upon the order in which such milestone event is achieved for such Licensed Product. For example, if with respect to a particular Licensed Product, the [***] is for [***], the [***] is for [***], the [***] is for [***], the [***] is for [***] and the [***] is for [***], then for such Licensed Product, [***] is the [***] for the [***] milestone, [***] is the [***] for the [***] milestone and the [***] for [***] milestone, and [***] is the [***] for the [***] milestone. Also, for clarity, subject to Section 8.3(c), each milestone payment under Column 1, Column 2 and Column 3 shall be payable up to a maximum of one-time for each Licensed Product and, solely for the purposes of this Section 8.3, a Licensed Product shall be considered a different Licensed Product for which a separate set of milestone payments is due only if [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(c) The timing for certain milestone payments pursuant to this Section 8.3 shall be as follows.

(i) With respect to each milestone event set forth in the Event Column in Section 8.3(a), when such milestone is achieved for the first time (whether under Column 1 or Column 2), the milestone payment that corresponds to such milestone event and for the [***] for which such milestone has been achieved shall be due in full at the time such milestone is achieved.

(ii) With respect to each milestone event set forth in the Event Column in Section 8.3(a), when such milestone is achieved for the second time or the third time under [***], the milestone payment shall be payable as follows: if at the time of the achievement of such milestone, BMS (and/or any of its Affiliates or Sublicensees) has not obtained any U.S. BLA or MAA Approval with respect to any Licensed Product for any indication in the Licensed Field, then [***] of the milestone payment amount for the achievement of such milestone event for [***] shall be due from BMS at the time such milestone is achieved, and the payment of the remaining [***] of such milestone payment shall be deferred and due from BMS at the time BMS (or any of its Affiliates or Sublicensees) obtains BLA or MAA Approval with respect to any Licensed Product for any indication in the Licensed Field. Notwithstanding the foregoing, in the event the indication for which such milestone has been achieved for such second or third time is the [***], then the milestone payment as set forth in Section 8.3(a) above shall be due in full at the time such milestone is achieved, and the deferral mechanism set forth in this Section 8.3(c)(ii) shall not apply.

(iii) If Development is discontinued for the most advanced Development program for [***] before BLA or MAA Approval is obtained for that indication and at a time when no Licensed Product has received BLA or MAA Approval for any indication in the Licensed Field, then (x) BMS shall pay [***] deferred milestone payment amounts for the next most advanced Development program that is then being continued, which shall be paid after the next milestone event is achieved after such discontinuation (with the milestone payment for such milestone) and (y) all milestone payments for milestone events achieved after such discontinuation, for such next most advanced Development program, shall be paid in full without any [***] deferral. For example, should Development of Licensed Products be terminated with respect to all RA Indication, and if as of such time, milestones for the [***] and [***] have been achieved in [***] and the Development program for [***] is then being actively continued, then upon achievement of the acceptance of BLA filing milestone [***], BMS shall pay the $[***] in milestone payment amounts for [***] that had previously been deferred and shall in addition pay the full $[***] milestone payment within [***] of such acceptance.

(iv) Notwithstanding the foregoing, in the case where Development of the ALD518 LF Product is discontinued before BLA or MAA Approval is obtained and BMS (or any of its Affiliates or Sublicensees) Develop a Licensed Product containing a different Licensed Compound (i.e., a Selected LF Backup Compound), then [***] milestone payments will be payable upon achievement of a milestone event which was previously achieved by ALD518 LF Product (and for which a milestone payment was previously paid).

8.4 Development Milestone Payments for Cancer Product in the Cancer Field. In the case where BMS has exercised the Option, the following milestone payments are payable one time by BMS to AlderHoldings [***] of the first achievement of the specified milestone event by BMS, its Sublicensees or their Affiliates for a Cancer Product in the Cancer Field.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Milestone Event for Cancer Product in Cancer Field	Milestone Payment for [***]		Milestone Payment for [***]
[***]		[***]		[***]
[***]		[***]		[***]
[***]		[***]		[***]
[***]		[***]		[***]
[***]		[***]		[***]

For clarity the identity of the [***] and the [***] shall be separately determined for each milestone event based solely upon the order in which such milestone event is achieved. For example, in the case where the [***] is for [***], the [***] is for [***], the [***] is for [***] and the [***] is for [***], then [***] is the [***] for [***] and the [***], and [***] is the [***] for the [***] and the [***].

8.5 Sales Milestone Payments.

(a) The sales milestone payments indicated below shall be payable by BMS to AlderHoldings when the aggregate, combined annual Net Sales of all Licensed Product in the Licensed Territory and annual Net Sales of Co-Developed Product in the Cancer Territory by BMS, its Sublicensees and their Affiliates for a given Calendar Year period first reach or exceed the Net Sales threshold amounts set forth below; provided that the $[***] milestone payment shall be payable in 2 equal installments, with the first $[***] installment being payable when the applicable Net Sales for a given Calendar Year period first reach or exceed $[***] and the second $[***] installment being payable (and would only be payable) when the applicable Net Sales next reach or exceed $[***] for a subsequent Calendar Year period (i.e., subsequent to the Calendar Year in which the $[***] Net Sales threshold is first reached or exceeded).

Aggregate annual Net Sales of Licensed Product first reach:	Milestone Payment
[***]		[***]
[***]		[***]
[***]		[***]

(b) The above milestone payments under this Section 8.5 are payable one time, such that the maximum payable under this Section 8.5 is $500 million. The above sales milestone payments shall be paid within [***] following the end of the Calendar Year in which the Net Sales threshold is achieved.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

8.6 Royalty Payments to AlderHoldings.

(a) General. Subject to the other provisions of this Article 8, BMS shall pay to AlderHoldings royalties based on the Net Sales of each Licensed Product during the applicable Royalty Term for such Licensed Product. The royalty payable with respect to each particular Licensed Product shall be based on the level of aggregate annual Net Sales of such Licensed Product in the Licensed Territory (or, as applicable, each Co-Developed Product in the Cancer Territory) in a given Calendar Year period by BMS, its Affiliates and Sublicensees, with the royalty rate tiered based upon the level of such aggregate worldwide Net Sales in such Calendar Year period. Royalties shall be calculated by multiplying the applicable royalty rates by the corresponding amount of the portion of Net Sales within each of the Net Sales tiers during such Calendar Year as set forth below. For the purposes of Section 8.6(b) all Licensed Products that contain the same Licensed Compound shall be considered the same Licensed Product and sales of such Licensed Products shall be aggregated for the purpose of determining Net Sales. For the purposes of Section 8.6(c) all Co-Developed Products that contain the same Licensed Compound shall be considered the same Co-Developed Product and sales of such Co-Developed Products shall be aggregated for the purpose of determining Net Sales.

(b) Royalty on Licensed Products in the Licensed Field. BMS will pay to AlderHoldings a royalty on Net Sales of Licensed Products (but excluding the Cancer Product in the Cancer Field) by BMS, its Affiliates and Sublicensees in the Licensed Territory based on the Net Sales tiers and royalty rates as set forth in the table below (the “Base Royalty Rate”) (subject to any offsets or reductions set forth below in this Section 8.6), provided however, that (i) in the case of a Licensed Product that is not an ALD518 LF Product, the applicable Base Royalty Rates shall be reduced to be [***] of the royalty rates listed below and (ii) for any period during the Royalty Term that the Licensed Product is not Covered by an Alder Patent or a Joint Patent and is only Covered by a BMS Patent claiming a Sole Invention, the applicable Base Royalty Rates shall be reduced to be [***] of the royalty rates listed below.

Annual Net Sales in the Licensed Territory (Determined Separately for Each Licensed Product)	Base Royalty Rate
[***]		[***]
[***]		[***]
[***]		[***]
[***]		[***]

By way of example, if the aggregate Net Sales of an ALD518 LF Product in the Licensed Territory in a particular Calendar Year is $2.7 billion, the amount of royalties payable hereunder shall be calculated as follows (subject to any applicable reductions under this Section 8.6): [***].

(c) Royalty on Cancer Product in the Cancer Field. BMS will pay to AlderHoldings a royalty on Net Sales of Cancer Product by BMS, its Affiliates and Sublicensees in the Cancer Territory based on the Net Sales tiers and Base Royalty Rates as set forth in the table below (subject to any offsets or reductions set forth below in this Section 8.6), provided however, that (i) in the case of a Cancer Product that is not an ALD518 LF Product, the applicable Base Royalty Rates shall be reduced to be [***] of the royalty rates listed below and (ii) for any period during the Royalty Term that the Cancer Product is not Covered by an Alder Patent or a Joint Patent and is only Covered by a BMS Patent claiming a Sole Invention, the applicable Base Royalty Rates shall be reduced to be [***] of the royalty rates listed below.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Annual Net Sales in the Cancer Territory (Determined Separately for Each Cancer Product)	Royalty Rate
[***]		[***]
[***]		[***]
[***]		[***]

By way of example, if the aggregate Net Sales of a Cancer Product that is an ALD518 LF Product in the Cancer Territory in a particular Calendar Year is $1.7 billion, the amount of royalties payable hereunder shall be calculated as follows (subject to any applicable reductions under this Section 8.6): [***].

(d) Third Party Payments.

(i) AlderHoldings shall bear and shall be responsible for the payment of all payment obligations to any Third Parties with respect to licenses obtained by AlderHoldings prior to the Effective Date with respect to Third Party intellectual property pertaining to the Development and/or Commercialization of Licensed Products (including without limitation any license fees and royalty payments arising based on BMS’ Commercialization of Licensed Compound or Licensed Product), provided that such payments that are Cancer Development Costs are subject to sharing between the Parties in accordance with Section 3.7. In addition, for clarity, it is understood that (1) for the supply to BMS of Licensed Compound and/or Co-Developed Product pursuant to Section 6.4 by Alder, BMS shall pay to AlderHoldings Alder’s Manufacturing Cost for such Licensed Compound and/or Co-Developed Product supplied and (2) in the case where Alder otherwise supplies or has its Third Party manufacturer supply to BMS Licensed Compound (or Licensed Product or Co-Developed Product) as may otherwise be agreed to in writing between the Parties, BMS shall pay to AlderHoldings Alder’s Manufacturing Cost for such Licensed Compound (or Licensed Product or Co-Developed Product) supplied.

(ii) If BMS, in its reasonable judgment, is required to obtain a license from any Third Party under any patent in order to import, manufacture, use or sell any Licensed Compound, BMS may deduct from the royalties that would otherwise be due to AlderHoldings pursuant to Section 8.6(b) or 8.6(c) (as applicable) with respect to a Licensed Product or Cancer Product that incorporates such Licensed Compound [***] of the amount of the payments paid to such Third Party on account of such license, provided that the royalties paid shall not be reduced in any such event below [***] of the amount that would otherwise be due pursuant to Section 8.6(b) or 8.6(c) (as applicable) with respect to any calendar quarter and further provided that BMS may not deduct any portion of payments made to a Third Party licensor that pertain, in part or in whole, to any compound or other composition of matter that is not a Licensed Compound.

(e) Generic Competition.

(i) During the portion of the applicable Royalty Term in a particular country where there are one or more products being sold in such country that are Generic Products with respect to such Licensed Product or Cancer Product, then the Base Royalty Rates set forth in Section 8.6(b) or 8.6(c) with respect to such Licensed Product or Cancer Product shall be reduced as follows: by [***], once the unit volume of sales of such Generic Product(s) in such country exceed [***] of such Licensed Product’s or Cancer Product’s unit volume in such country; by [***],

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

once the unit volume of sales of such Generic Product(s) in such country exceed [***] of such Licensed Product’s or Cancer Product’s unit volume in such country; and by [***], once the unit volume of sales of such Generic Product(s) in such country exceeds [***] of such Licensed Product’s or Cancer Product’s unit volume in such country; provided however, that this Section 8.6(e)(i) shall only apply under the circumstances where there is a Valid Claim in an Alder Patent, Joint Patent or BMS Patent that claims the composition of matter, manufacture or use of such Licensed Product or Cancer Product (or a Licensed Compound contained therein) in such country if BMS is using Diligent Efforts to enjoin the sale of such Generic Product. This Section 8.6(e)(i) is subject to Section 8.6(e)(ii).

(ii) For purposes of a Generic Product applicable to a Licensed Product, with respect to any Generic Product that obtained regulatory approval that relied on data submitted by Alder or any of its Affiliates or licensees in connection with the Regulatory Approval for such Cancer Product, the unit volume sales of such Generic Product in Section 8.6(e)(i) shall only include those sales for which the Generic Product sold is used off-label in the Licensed Field. For the purposes of determining and tracking such sales and off-label use of such Generic Product, the Parties [***] will put in place a process and methodology for the tracking of sales of such Generic Product to determine the extent of such off-label use[***] for such purpose. Such process and methodology shall be implemented [***], with the understanding that royalties paid following [***] shall be based upon data from the most recent [***] for which data is then available and the Parties shall make an adjustment payment promptly after such implementation to compensate for the difference between the amounts paid based upon the earlier [***] data and the amounts that should have been paid based on the data for the [***] in which the sales were made. Any dispute with respect to such determination of such sales and off-label use of such Generic Product shall be [***] resolved [***] in accordance with Section 16.2. If [***] cannot agree on the process and methodology to be implemented by the Parties in tracking sales of such Generic Product or on the extent of off-label use of such Generic Product in the Licensed Field then, in each case, at the election of either Party, such dispute shall be [***] resolved [***] in accordance with Section 16.2.

(f) One Royalty. For clarity, only one royalty shall be due to AlderHoldings with respect to the same unit of Licensed Product or Co-Developed Product.

8.7 Royalty Term. Royalties payable by BMS to AlderHoldings under Section 8.6 shall be paid on a Licensed Product-by-Licensed Product or Co-Developed Product-by-Co-Developed Product and country-by-country basis as follows.

(a) The following under this Section 8.7(a) shall apply with respect to the Licensed Product which is the ALD518 LF Product.

(i) In the U.S., if the Cancer Product obtains Regulatory Approval in the Cancer Field prior to the receipt of Regulatory Approval for the Licensed Product in the Licensed Field, if obtaining such Regulatory Approval for the Cancer Product has the effect of shortening the extended patent term of the COM Patent in the U.S. compared to what would have been the extended patent term in the U.S. had the Licensed Product obtained Regulatory Approval in the U.S. prior to the Cancer Product, royalties shall be paid until the later of (A) [***] after First Commercial Sale of the applicable Licensed Product in the U.S. or (B) [***] of the [***] in a [***] that would [***] by the sale of the applicable

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Licensed Product in the Licensed Field in the U.S.; provided however, that upon [***] the royalty term shall recommence and shall continue for as long as BMS or its Affiliate or Sublicensee sells the Licensed Product in the U.S. and the royalty rate shall be as set forth in Section 8.6, provided that Section 8.6(e) shall be revised such that when (and so long as) the unit volume sales of Generic Product(s) in the U.S. exceed [***] of the Licensed Product’s unit volume sales in the U.S., [***] royalty will then be payable under Section 8.6 (i.e., the royalty rate shall be [***]). For clarity, in the case where the royalty term is recommenced as set forth above, no royalty shall be payable for the period from the initial end of the royalty term to the date that the royalty term is recommenced.

(ii) In any country outside the U.S., if the Cancer Product obtains Regulatory Approval in the Cancer Field prior to the receipt of Regulatory Approval for the Licensed Product in the Licensed Field, and if in such country obtaining such Regulatory Approval for the Cancer Product has the effect of shortening the extended patent term of the COM Patent in such country compared to what would have been the extended patent term had the Licensed Product obtained Regulatory Approval prior to the Cancer Product, then royalties shall be paid until the later of (A) [***] after the First Commercial Sale of the applicable Licensed Product in such country or (B) the [***] of the [***] in the [***] that would [***] by the sale of the applicable Licensed Product in such country [***]; provided however, [***] the royalty term shall recommence, and shall continue until for as long as BMS or its Affiliate or Sublicensee sells the Licensed Product in such country, and the royalty rate shall be as set forth in Section 8.6, provided that Section 8.6(e) shall be revised such that when (and so long as) the unit volume sales of Generic Product(s) in such country exceed [***] of the Licensed Product’s unit volume sales in such country, [***] royalty will then be payable under Section 8.6 (i.e., the royalty rate shall be [***]). Also for clarity, in the case where the royalty term is recommenced as set forth above, no royalty shall be payable for the period from the initial end of the royalty term to the date that the royalty term is recommenced.

(iii) In the U.S. or any other country in the Territory, if the Cancer Product obtains Regulatory Approval in the Cancer Field prior to the receipt of Regulatory Approval for the Licensed Product in the Licensed Field, and if in such country obtaining such Regulatory Approval for the Cancer Product does not have the effect of shortening the extended patent term of the COM Patent in such country compared to what would have been the extended patent term had the Licensed Product obtained Regulatory Approval prior to the Cancer Product or if no patent extensions are available, then royalties with respect to such country shall be paid until the later of (A) [***] after First Commercial Sale of the Licensed Product in such country or (B) [***] of the [***] in an [***] that would [***] by the sale of such Licensed Product in such country [***] with respect to such [***] under this Agreement ([***]).

(iv) In the U.S. or any other country of the Territory, if the Licensed Product obtains Regulatory Approval in the Licensed Field prior to the receipt of Regulatory Approval, if any, for the Cancer Product in the Cancer Field in such country, royalties shall be paid until the later of (A) [***] after First Commercial Sale of the Licensed Product in such country or (B) the [***] of the [***] in an [***] that would be [***] by the sale of such Licensed Product in such country [***] with respect to such [***] under this Agreement ([***] [***]).

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(b) With respect to any Licensed Product which is other than the ALD518 LF Product, royalties shall be paid on a country-by-country basis until the later of (i) [***] after First Commercial Sale of the Licensed Product in such country or (ii) the [***] of the [***] in an [***] that would [***] by the sale of the applicable Licensed Product [***] in the applicable country [***].

(c) With respect to any Co-Developed Product in the Cancer Territory, royalties shall be paid on a country-by-country basis until the later of (i) [***] after First Commercial Sale of the Co-Developed Product in such country or (ii) the [***] of the [***] in an [***] that would [***] by the sale of the applicable Co-Developed Product in the applicable country [***].

(d) As used in this Agreement, any of the above described periods with respect to each of the ALD518 LF Product, any other Licensed Product, or the Co-Developed Product is referred to as the “Royalty Term”.

8.8 Royalty Payments and Reports. All amounts payable to AlderHoldings pursuant to Section 8.6 shall be paid in Dollars within [***] after the end of the [***] in which the applicable Net Sales were recorded. Each payment of royalties shall be accompanied by a royalty report providing a statement, on a Product-by-Product and country-by-country basis, of: (i) the amount of Net Sales of Licensed Products in the Licensed Territory and, as applicable, Co-Developed Products in the Cancer Territory, during the applicable [***], (ii) a calculation of the amount of royalty payment due in Dollars on such Net Sales for such calendar quarter, and (iii) the amount of withholding taxes, if any, required by Applicable Law to be deducted with respect to such royalties, provided that such royalty report for [***] shall in addition provide a statement, on a Product-by-Product and country-by-country basis, of the gross sales amount of Licensed Products (and, as applicable, Co-Developed Products) in the Major Market countries during such [***] and such [***]. Additionally, within [***] after the end of [***], BMS shall provide AlderHoldings with a preliminary royalty report that shall include on a Product-by-Product and country-by-country basis, the amount of Net Sales of Licensed Products and, as applicable, Co-Developed Products in the Major Market countries during the applicable calendar quarter.

8.9 Payment Method. All payments due under this Agreement to AlderHoldings shall be made by bank wire transfer in immediately available funds to an account designated by AlderHoldings. All payments hereunder shall be made in Dollars.

8.10 Taxes. AlderHoldings will pay any and all taxes levied on account of all payments it receives under this Agreement. If laws or regulations require that taxes be withheld with respect to any royalty payments by BMS to AlderHoldings under this Agreement, BMS will: (i) deduct those taxes from the remittable payment, (ii) pay the taxes to the proper taxing authority, and (iii) send evidence of the obligation together with proof of tax payment to AlderHoldings on a timely basis following that tax payment. Each Party agrees to cooperate with the other Party in claiming refunds or exemptions from such deductions or withholdings under any relevant agreement or treaty which is in effect. The Parties shall discuss applicable mechanisms for minimizing such taxes to extent possible in compliance with Applicable Law. In addition, the Parties shall cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) in connection with this Agreement.

8.11 Blocked Currency. In each country where the local currency is blocked and cannot be removed from the country, royalties accrued on Net Sales in that country shall be paid to AlderHoldings in the equivalent amount in Dollars.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

8.12 Royalty on Sublicensee Sales. BMS shall have the responsibility to account for and report sales of any Licensed Product or Co-Developed Product by a Sublicensee on the same basis as if such sales were Net Sales by BMS. BMS shall pay to AlderHoldings or cause the Sublicensee to pay to Alder amounts when due under this Agreement (with BMS remaining responsible for any failure of the Sublicensee to pay amounts when due under this Agreement).

8.13 Foreign Exchange. In the case of Net Sales outside the United States, the rate of exchange to be used in computing the amount of currency equivalent in Dollars shall be the rate of exchange used by BMS for its own financial reporting purposes in connection with its other products, which shall be consistent with GAAP. As of the Effective Date the rate of exchange is calculated by BMS on a month-to-month basis on the twenty fifth (25th) of each month using a daily average of Dollar buying rates published by Reuters for the preceding month. Upon request by AlderHoldings, BMS shall provide AlderHoldings with the applicable exchange rate used by BMS with respect to any royalty period.

8.14 Records. BMS shall keep, and shall cause its Affiliates and Sublicensees to keep, complete, true and accurate books of accounts and records, including gross sales and any deductions thereto in connection with calculation of Net Sales and all [***] Sublicensing Revenues received, sufficient to determine and establish the amounts payable incurred under this Agreement, and compliance with the other terms and conditions of this Agreement. Such books and records shall be kept reasonably accessible and shall be made available for inspection for a three (3) year period in accordance with Section 8.15 below.

8.15 Inspection of Records. Upon reasonable prior notice, each Party (the “Inspected Party”) shall permit an independent nationally recognized certified public accounting firm (subject to obligations of confidentiality to such Inspected Party), appointed by the other Party (the “Inspecting Party”) and reasonably acceptable to the Inspected Party, to inspect the books and records described in Sections 3.7(e) and 8.14; provided that such inspection shall not occur more often than once per calendar year, unless a material error is discovered in such inspection in which case the Inspecting Party shall have the right to conduct an additional audit for such period. Any inspection conducted under this Section 8.15 shall be at the expense of the Inspecting Party, unless such inspection reveals any underpayment of any amount due hereunder by at least five percent (5%) for any period, in which case the full costs of such inspection for such period shall be borne by the Inspected Party. Any underpayment shall be paid by BMS to Alder within [***] with interest on the underpayment at the rate specified in Section 8.16 from the date such payment was originally due, and any overpayment shall be credited against future amounts due by BMS to AlderHoldings.

8.16 Late Payments. Any payments or portions thereof due hereunder that are not paid on the date such payments are due under this Agreement shall bear interest at a rate equal to the lesser of: (a) [***] above the prime rate as published by Citibank, N.A., New York, New York, or any successor thereto, at 12:01 a.m. on the first day of [***] in which such payments are overdue or (b) the maximum rate permitted by Applicable Law; in each case calculated on the number of days such payment is delinquent, compounded monthly.

8.17 Payments to or Reports by Affiliates. Any payment required under any provision of this Agreement to be made to either Party or any report required to be made by any Party shall be made to or by an Affiliate of that Party if designated in writing by that Party as the appropriate recipient or reporting entity.

8.18 Equity Investment Option.

(a) AlderBio shall use its commercially reasonable efforts to cause the managing underwriter(s) of AlderBio’s initial public offering (“IPO”) to offer directly to BMS the right to purchase shares of AlderBio Common Stock (the “IPO Purchase Option”) in the IPO at a price equal to the price per

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

share paid by the public (the “Public Offering Price”) for shares of Common Stock; provided that the IPO Purchase Option shall only apply to the filing of a registration statement relating to an IPO that occurs after the one-year anniversary of the Effective Date. If BMS exercises its IPO Purchase Option, it shall have the right to purchase in the IPO up to a number of shares of Common Stock equal to the lowest of (i) $20 million divided by the Public Offering Price, (ii) 20% of the total number of shares of stock being sold to the public in the IPO and (iii) 19.9% of the total outstanding voting equity securities of AlderBio immediately following the closing of the IPO (the “IPO Rights Shares”).

(b) If (i) the filing of a registration statement relating to the IPO occurs on or prior to the one year anniversary of the Effective Date, (ii) BMS does not exercise the IPO Purchase Option, (iii) the managing underwriter(s) of the IPO determine, in their sole discretion that it is not advisable to make available to BMS all of the IPO Rights Shares in the IPO or (iv) AlderBio determines (based on advice of legal counsel) that the IPO Purchase Option is not permissible under federal securities laws or any other applicable laws, rules and regulations, then AlderBio shall in lieu of the IPO Purchase Option, make a concurrent private placement offering to BMS of such number of securities equal to the aggregate number of IPO Rights Shares (the “Private Placement”), at the Public Offering Price, to BMS (the “Private Placement Purchase Option”) and BMS shall exercise such Private Placement Purchase Option within [***] following delivery of notice by AlderBio containing the terms of such Private Placement Purchase Option. The closing of the IPO shall be a condition to the closing of such Private Placement. Notwithstanding the foregoing, AlderBio’s obligation to offer the Private Placement Purchase Option shall be subject to the determination by AlderBio (based on advice legal counsel) that such transaction is permissible under federal securities laws and all other applicable laws, rules and regulations.

(c) BMS shall, as a condition to its participation in either the IPO or Private Placement, execute such other documents as may be required of all participants in the IPO or Private Placement or as deemed reasonably necessary by the managing underwriter(s) of the IPO or the Company, as applicable. The Company shall, as a condition to BMS’ participation in the Private Placement, execute such other documents as may be reasonably requested by BMS.

(d) The rights and obligations described in this Section 8.18 shall terminate and be of no further force and effect on the earlier of (i) immediately following the closing of the IPO, (ii) ten (10) years following the Effective Date and (iii) termination of this Agreement.

8.19 [***] Sublicensing Revenues. If BMS or its Affiliate enters into an agreement with any Third Party pursuant to which BMS or its Affiliate grants such Third Party a sublicense to Develop and/or Commercialize Licensed Product in the Licensed Field in [***] (such agreement, a “[***] Sublicense Agreement”), then BMS shall pay to Alder, within [***] after [***] in which such [***] Sublicensing Revenues were received, an amount equal to [***] of all [***] Sublicensing Revenues; provided however, that the foregoing shall not apply (i) if such [***] Sublicense Agreement also includes a grant by BMS or its Affiliate to such Third Party of a sublicense to Develop and/or Commercialize Licensed Product in the Licensed Field in [***] or (ii) if BMS or its Affiliate co-Develops and/or co-Commercializes the Licensed Product in the Licensed Field in [***] pursuant to such [***] Sublicense Agreement. For the purposes of this Section 8.19, “[***] Sublicensing Revenues” shall mean all consideration received by BMS or its Affiliate from a Sublicensee pursuant to a [***] Sublicense Agreement in consideration of the sublicense of rights with respect to the Licensed Product in [***], which may include (without limitation) [***], but specifically excludes [***]. For clarity, [***] Sublicensing Revenues shall not include [***].

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9. PATENT PROSECUTION AND ENFORCEMENT

9.1 Patent Contacts. Each Party shall designate patent counsel representatives who shall be responsible for coordinating the activities between the Parties in accordance with this Article 9 (each a “Patent Contact”). Each Party shall designate its initial Patent Contact within thirty (30) days following the Effective Date and shall promptly thereafter notify the other Party of such designation. If at any time a vacancy occurs for any reason, the Party that appointed the prior incumbent shall as soon as reasonably practicable appoint a successor. Each Party shall promptly notify the other Party of any substitution of another person as its Patent Contact. The Patent Contacts shall, from time to time, coordinate the respective patent strategies of the Parties relating to this Agreement. In particular the Patent Contacts will review and update the list of Core Patents from time to time to ensure that all Licensed Products being Developed or Commercialized are covered.

9.2 Disclosure of Inventions. Each Party shall promptly disclose to the other all Sole Inventions or Joint Inventions, including all invention disclosures or other similar documents submitted to such Party by its, or its Affiliates’, employees, agents or independent contractors describing such Sole Inventions or Joint Inventions. Such Party shall also respond promptly to reasonable requests from the other Party for more Information relating to such inventions.

9.3 Prosecution of Patents.

(a) Alder Patents. Except as otherwise provided in this Section 9.3(a), the Parties shall share equally the Patent Prosecution Costs for the Alder Patents. All of the preparation, filing and prosecution (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) of the Alder Patents shall be handled by outside patent counsel mutually agreed upon by the Parties that will jointly represent the Parties (the “Patent Firm”). [***]. The Patent Contacts shall establish procedures for such sharing of such Patent Prosecution Costs for such Alder Patents. As between the Parties, Alder shall have the lead responsibility working with the Patent Firm to prepare, file, prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) and maintain the Alder Patents in all jurisdictions. Alder (and/or the Patent Firm) shall provide BMS reasonable opportunity to review and comment on such filing and prosecution efforts regarding such Alder Patents reasonably prior to any submissions with applicable patent authorities. Alder (and/or the Patent Firm) shall provide BMS with a copy of all communications from any patent authority in the applicable territory regarding such Alder Patents, and shall provide drafts of any filings or responses to be made to such patent authorities a reasonable amount of time in advance of submitting such filings or responses so that BMS may have an opportunity to review and comment thereon. If Alder determines in its sole discretion to abandon, cease prosecution or not maintain any Alder Patent in any jurisdiction (or otherwise determines that it no longer desires to share equally the Patent Prosecution Costs for any Alder Patent in any jurisdiction), then Alder shall provide BMS written notice of such determination at least [***] before any deadline for taking action to avoid abandonment (or other loss of rights) and shall provide BMS with the opportunity to prepare, file, prosecute and maintain such Alder Patent in such jurisdiction on behalf of Alder using the Law Firm (and BMS shall thereafter be responsible for the Patent Prosecution Costs for such Alder Patent in the applicable jurisdiction). If BMS desires Alder to file in a particular jurisdiction a Alder Patent (including any Alder Patent that claims priority to or is based on the subject matter of another Alder Patent), BMS shall provide written notice to Alder requesting that Alder (through the Law Firm) file such patent application in such jurisdiction. If BMS provides such written notice to Alder, Alder (through the Law Firm) shall either (i) file and prosecute such patent application and maintain any patent issuing thereon in such jurisdiction, or (ii) notify BMS that Alder does not desire to file such patent application and provide BMS with the opportunity to file and prosecute such patent application and maintain any patent issuing thereon on behalf of Alder using the Law Firm. BMS’ rights under this Section 9.3(a) with respect to any Alder Patent licensed to Alder by a Third Party shall be subject to the rights of such Third Party to file, prosecute and/or maintain such Alder Patent. If BMS assumes responsibility for any Alder Patents as set forth above in this Section 9.3(a), then the Patent Prosecution Costs incurred by BMS in the course of course of preparing, filing, prosecuting and maintaining such Alder Patents shall be thereafter be borne by BMS. If BMS assumes responsibility for any Alder Patents as set forth (and the associated Patent Prosecution Costs for such Alder Patents), then BMS shall have the right at its discretion to transfer the responsibility for such Alder Patents to another outside patent firm that BMS may select.

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(b) BMS Patents Other Than Joint Patents. This Section 9.3(b) shall only apply to those BMS Patents that claim Sole Inventions of BMS. BMS Patents that are Joint Patents are subject to Section 9.3(c). BMS shall have the sole right and authority to prepare, file, prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) and maintain the BMS Patents in any jurisdiction. BMS shall provide Alder reasonable opportunity to review and comment on such prosecution efforts regarding such BMS Patents. BMS shall provide Alder with a copy of material communications from any patent authority regarding such BMS Patents, and shall provide Alder drafts of any material filings or responses to be made to such patent authorities a reasonable amount of time in advance of submitting such filings or responses so that Alder may have an opportunity to review and comment thereon. BMS shall be responsible for all costs incurred by it (including all Patent Prosecution Costs) in the course of preparing, filing, prosecuting and maintaining the BMS Patents, without reimbursement by Alder. If BMS decides not to file, prosecute and/or maintain a particular BMS Patent, BMS shall notify Alder of BMS’ decision reasonably in advance and provide Alder with the opportunity to file and prosecute such patent application and maintain any patent issuing thereon at Alder’s expense.

(c) Joint Patents That Are Not Alder Patents. BMS shall have the first right, but not the obligation, to prepare, file, prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) and maintain in all jurisdictions all Joint Patents that are not Alder Patents. If BMS determines in its sole discretion to abandon, cease prosecution or otherwise not file or maintain any such Joint Patent in any jurisdiction, then BMS shall provide Alder written notice of such determination at least [***] before any deadline for taking action to avoid abandonment (or other loss of rights) and shall provide Alder with the opportunity to prepare, file, prosecute and maintain such Joint Patent in such jurisdiction. The Party that is responsible for preparing, filing, prosecuting, and maintaining a particular Joint Patent (the “Prosecuting Party”) shall provide the other Party reasonable opportunity to review and comment on such prosecution efforts regarding such Joint Patent, and such other Party shall provide the Prosecuting Party reasonable assistance in such efforts. The Prosecuting Party shall provide the other Party with a copy of all material communications from any patent authority in the applicable jurisdictions regarding the Joint Patent being prosecuted by such Party, and shall provide the other Party drafts of any material filings or responses to be made to such patent authorities a reasonable amount of time in advance of submitting such filings or responses so that such other Party may have an opportunity to review and comment thereon. In particular, each Party agrees to provide the other Party with all information necessary or desirable to enable the other Party to comply with the duty of candor/duty of disclosure requirements of any patent authority. Either Party may determine that it is no longer interested in supporting the continued prosecution or maintenance of a particular Joint Patent in a country or jurisdiction, in which case: (i) the disclaiming Party shall, if requested in writing by the other Party, assign its ownership interest in such Joint Patent in such country or jurisdiction to the other Party (in the case of Alder, AlderHoldings) for no additional consideration; and (ii) if such assignment is effected, any such Joint Patent would thereafter be deemed an Alder Patent in the case of assignment to AlderHoldings, or a BMS Patent in the case of assignment to BMS; provided however, that the disclaiming Party would have an immunity from suit under such Alder Patent or BMS Patent, as the case may be, in the applicable country or jurisdiction, and the other Party shall have the right, but not the obligation, to prosecute and maintain such Patent. In addition, BMS’ license under Section 7.4 (or Section 7.9 if BMS exercises the Option) shall become nonexclusive with respect to any Joint Patent that becomes an Alder Patent pursuant to the preceding sentence (for clarity, such Alder Patent shall continue to be included in the definition of a Valid Claim for purposes of Section 8.7). In the event AlderHoldings assigns to BMS its rights in such Joint Patent, such Joint Patent shall be deemed to be a BMS Patent subject to BMS’ license grant to AlderHoldings and its Affiliates under Section 7.8 and Article 13, and BMS’ royalty obligation to AlderHoldings shall not be affected by such assignment. Each Party shall bear its own internal costs in respect of the filing, prosecution and maintenance of Joint Patents. Patent Prosecution Costs for the Joint Patents shall be borne 50% by BMS and 50% by Alder in the Licensed Territory. In the event a Party elects to disclaim its interest in a Joint Patent, the Patent Prosecution Costs incurred with respect to such Patent after the date of such disclaimer shall thereafter be borne exclusively by the other Party, without reimbursement or credit.

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(d) Cooperation in Patent Prosecution and Patent Term Adjustments or Extensions. Each Party shall provide the other Party all reasonable assistance and cooperation in the Patent preparation, prosecution, filing and maintenance efforts provided above in this Section 9.3, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution. Each Party shall consult with and obtain the consent of the other Party before applying for or obtaining any patent term adjustment, patent term extension or related extension of rights, including supplementary protection certificates and similar rights for any Collaboration Patents that pertain to both the Licensed Field and the Cancer Field. Neither Party shall proceed with such an adjustment or extension until the Parties have consulted with one another and agreed to a strategy therefor. Each Party shall cooperate fully with and provide all reasonable assistance to the other Party and use all commercially reasonable efforts consistent with its obligations under Applicable Law (including any applicable consent order or decree) in connection with obtaining any such adjustments or extensions for the Collaboration Patents consistent with such strategy. To the extent reasonably and legally required in order to obtain any such adjustment or extension in a particular country, each Party shall make available to the other a copy of the necessary documentation to enable such other Party to use the same for the purpose of obtaining the adjustment or extension in such country.

(e) Data Exclusivity and Orange Book Listings. With respect to data or market exclusivity periods, such as those periods listed in the FDA’s Orange Book (including without limitation any available pediatric extensions or other forms of regulatory exclusivity that may be available) or periods under national implementations of Article 10(1) of Directive 2001/83/EC and all international equivalents, each Party shall cooperate fully with and provide all reasonable assistance to the other Party and use all commercially reasonable efforts consistent with its obligations under Applicable Law (including any applicable consent order or decree) to seek, maintain and enforce all such data exclusivity periods available for the Products. With respect to filings in the FDA Orange Book or other similar filings or listings as may be applicable (and foreign equivalents) for issued patents for a Product (including but not limited to the Core Patents and Joint Patents, as applicable), each Party shall cooperate fully with and provide all reasonable assistance to the other Party and use all commercially reasonable efforts consistent with its obligations under Applicable Law (including any applicable consent order or decree) in the filing and maintaining any such listing and filings.

9.4 Infringement of Collaboration Patents by Third Parties.

(a) Notification. If there is any infringement, threatened infringement, or alleged infringement by a Third Party of any of the Alder Patents (including Core Patents) or Joint Patents (an “Infringement”), then each Party shall promptly notify the other Party in writing of any such Infringement of which it becomes aware, and shall provide evidence in such Party’s possession demonstrating such Infringement. In particular, each Party shall notify and provide the other Party with copies of any allegations of alleged patent invalidity, unenforceability or non-infringement of any Alder Patents (including Core Patents) or Joint Patents Covering a Licensed Compound or Product (including methods of use thereof) pursuant to any applicable certification (comparable to a Paragraph IV Patent Certification by a Third Party filing an Abbreviated New Drug Application), an application under §505(b)(2) or other similar patent certification by a Third Party, and any foreign equivalent thereof for a Generic Product. Such notification and copies shall be provided by the Party receiving such certification to the other Party as soon as practicable and at least within five (5) days after receiving Party receives such certification. Such notification and copies shall be sent by facsimile and overnight courier to BMS at the address set forth below:

Bristol-Myers Squibb Company

P.O. Box 4000

Route 206 & Province Line Road

Princeton, New Jersey 08543-4000

Attention: Vice President and Chief Intellectual Property Counsel

Telephone: 609-252-4825

Facsimile: 609-252-7884

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(b) Enforcement Rights.

(i) Core Patents. Subject to Section 9.4(e) and the other provisions of this Section 9.4, BMS shall have the right, but not the obligation, to bring an appropriate suit or other action against any person or entity allegedly engaged in any Infringement (whether with respect to the Licensed Field or the Cancer Field) of the Core Patents in the Licensed Territory, at BMS’ expense. BMS shall have a period of 120 days after its receipt or delivery of notice and evidence pursuant to Section 9.4(a), to elect to so enforce such Core Patents in the applicable jurisdiction (or to settle or otherwise secure the abatement of such Infringement), provided however, that such period shall not exceed and shall be less than 120 days to the extent that a delay in bringing an action to enforce the applicable Core Patents against such alleged Third Party infringer would limit or compromise the remedies (including monetary and injunctive relief) available against such alleged Third Party infringer. In the event BMS does not so elect (or settle or otherwise secure the abatement of such Infringement), it shall so notify Alder in writing and in the case where Alder then desires to commence a suit or take action to enforce the applicable Core Patents with respect to such Infringement in the applicable jurisdiction, the Parties shall confer and upon BMS’ prior written consent (such consent not to be withheld, conditioned or delayed except to the extent that the bringing of an enforcement action by Alder would violate Applicable Law), Alder shall have the right to commence such a suit or take such action to enforce the applicable Core Patents, at Alder’s expense. Each Party shall provide to the Party enforcing any such rights under this Section 9.4(b)(i) reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such action as a party plaintiff if required by Applicable Law to pursue such action. The enforcing Party shall keep the other Party regularly informed of the status and progress of such enforcement efforts, and shall reasonably consider the other Party’s comments on any such efforts.

(ii) Alder Patents That Are Not Core Patents. This Section 9.4(b)(ii) shall apply to the Alder Patents that are not Core Patents (the “Other Alder Patents”). Subject to Section 9.4(e), BMS shall have the right, but not the obligation, to bring an appropriate suit or other action against any person or entity allegedly engaged in any Infringement of the Other Alder Patents on account of such Third Party’s manufacture, use, offer to sell or sale of a Licensed Product in the Licensed Field in the Licensed Territory, and any Infringement of the Other Alder Patents on account of such Third Party’s manufacture, use, offer to sell or sale of a Co-Developed Product in the Cancer Field in the Cancer Territory, in each case at BMS’ expense. BMS shall have a period of 120 days after its receipt or delivery of notice and evidence pursuant to Section 9.4(a), to elect to so enforce such Other Alder Patent in the applicable jurisdiction (or to settle or otherwise secure the abatement of such Infringement), provided however, that such period shall not exceed and shall be less than 120 days to the extent that a delay in bringing an action to enforce the applicable Other Alder Patents against such alleged Third Party infringer would limit or compromise the remedies (including monetary and injunctive relief) available against such alleged Third Party infringer. In the event BMS does not so elect (or settle or otherwise secure the abatement of such Infringement), it shall so notify Alder in writing and in the case where Alder then desires to commence a suit or take action to enforce the applicable Other Alder Patents with respect to such Infringement in the applicable jurisdiction, the Parties shall confer and Alder shall have the right to commence such a suit or take such action to enforce the applicable Other Alder Patents, at Alder’s expense. Alder shall have the sole right, but not the obligation, to bring an appropriate suit or other action against any person or entity allegedly engaged in any Infringement

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of any Other Alder Patent with respect to any Cancer Product in the Alder Cancer Territory. Each Party shall provide to the Party enforcing any such rights under this Section 9.4(b)(ii) reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such action as a party plaintiff if required by Applicable Law to pursue such action. The enforcing Party shall keep the other Party regularly informed of the status and progress of such enforcement efforts, and shall reasonably consider the other Party’s comments on any such efforts.

(iii) BMS Patents That Are Not Joint Patents. BMS shall have the sole right, but not the obligation, to bring an appropriate suit or other action against any person or entity allegedly engaged in any Infringement of the BMS Patents that are not Joint Patents. Alder shall provide reasonable assistance to BMS in such enforcement, at BMS’ request and expense. BMS shall keep Alder regularly informed of the status and progress of such enforcement efforts, and shall reasonably consider Alder’s comments on any such efforts.

(iv) Joint Patents That Are Not Alder Patents. Subject to Section 9.4(e), BMS shall have the right, but not the obligation, to bring at its expense an appropriate suit or other action against any person or entity allegedly engaged in any Infringement of Joint Patents that are not Alder Patents. BMS shall have a period of [***] after its receipt or delivery of notice and evidence pursuant to Section 9.4(a), to elect to so enforce such Joint Patent in the applicable Territory as set forth above (or to settle or otherwise secure the abatement of such Infringement). In the event BMS does not so elect (or settle or otherwise secure the abatement of such Infringement), it shall so notify Alder in writing and in the case where Alder then desires to commence a suit or take action to enforce the applicable Joint Patents with respect to such Infringement in the applicable Territory, the Parties shall confer and Alder shall have the right to commence such a suit or take such action to enforce the applicable Joint Patents, at Alder’s expense. If BMS has not exercised the Option, then Alder shall have the sole right, but not the obligation, to bring an appropriate suit or other action against any person or entity allegedly engaged in any Infringement of any Joint Patent with respect to any Cancer Product in the Territory. Each Party shall provide to the Party enforcing any such rights under this Section 9.4(b)(iv) reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such action as a party plaintiff if required by Applicable Law to pursue such action. The enforcing Party shall keep the other Party regularly informed of the status and progress of such enforcement efforts, and shall reasonably consider the other Party’s comments on any such efforts.

(c) Settlement. Without the prior written consent of the other Party, neither Party shall settle any claim, suit or action that it may bring under this Section 9.4 involving Alder Patents (including Core Patents) in any manner that would negatively impact such intellectual property or that would limit or restrict the ability of either Party to sell Products anywhere in the Territory. In addition, with respect to a claim, suit or action brought by BMS pursuant to Section 9.4(b)(i) with respect to any Infringement in the Cancer Field of a Core Patent in a country the Alder Cancer Territory, BMS shall not settle such claim, suit or action without the prior written consent of Alder. In addition, with respect to a claim, suit or action brought by either pursuant to Section 9.4(b)(iii) with respect to any Infringement of a Joint Patent, such Party shall not settle such claim, suit or action without the prior written consent of the other Party.

(d) Expenses and Recoveries.

(i) A Party bringing a claim, suit or action under Section 9.4(b) (except under Section 9.4(b)(iv) which is subject to Section 9.4(d)(ii) below) against any person or entity engaged in Infringement of the Alder Patents (including the Core Patents) shall be solely responsible for any expenses incurred by such Party as a result of such claim, suit or action. If such Party recovers monetary damages from such Third Party in such suit or action, such recovery shall first be applied to all out-of-pocket costs and expenses incurred by the Parties in connection

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therewith, including attorneys fees. If such recovery is insufficient to cover all such costs and expenses of both Parties, it shall be shared pro-rata in proportion to the relative amount of such costs and expenses incurred by each Party. If after such reimbursement any funds shall remain from such damages, such funds shall be shared as follow: (i) if BMS is the Party bringing such suit and the Infringement is in the Licensed Field, such remaining funds shall be treated as Net Sales of Licensed Product, (ii) if BMS is the Party bringing such suit and the Infringement is in the Cancer Field in the Cancer Territory and BMS has exercised the Option, such remaining funds shall be treated as Net Sales of Co-Developed Product, (iii) if BMS is the Party bringing such suit and the Infringement is in the Cancer Field in the Alder Cancer Territory and BMS has exercised the Option, BMS shall pay such remaining funds to Alder, (iv) if BMS is the Party bringing such suit and the Infringement is in the Cancer Field and BMS has not exercised the Option, BMS shall pay such remaining funds to Alder and (v) if Alder is the Party bringing such suit, such remaining funds shall be retained by Alder.

(ii) A Party bringing a claim, suit or action under Section 9.4(b)(iv) against any person or entity engaged in Infringement of the Joint Patents shall be solely responsible for any expenses incurred by such Party as a result of such claim, suit or action. If such Party recovers monetary damages from such Third Party in such suit or action, such recovery shall first be applied to all out-of-pocket costs and expenses incurred by the Parties in connection therewith, including attorneys fees. If such recovery is insufficient to cover all such costs and expenses of both Parties, it shall be shared pro-rata in proportion to the relative amount of such costs and expenses incurred by each Party. If after such reimbursement any funds shall remain from such damages, such funds shall be shared as follow: (1) if BMS is the Party bringing such suit, BMS shall retain [***] of such remaining funds and BMS shall pay [***] of such remaining funds to Alder, and (2) if Alder is the Party bringing such suit, Alder shall retain [***] of such remaining funds and Alder shall pay [***] of such remaining funds to BMS.

(e) Patents Licensed from Third Parties. BMS’ rights under this Section 9.4 with respect to any Core Patent licensed to Alder by a Third Party shall be subject to the rights of such Third Party to enforce such Core Patent and/or defend against any claims that such Core Patent is invalid or unenforceable.

9.5 Defense of Infringement Actions. During the term of this Agreement, each Party shall bring to the attention of the other Party all information regarding potential infringement of Third Party intellectual property rights in connection with the development, manufacture, production, use, importation, offer for sale, or sale of Products in the Territory. The Parties shall discuss such information and decide how to handle such matter. Subject to Article 15, each Party shall be solely responsible for defending any action, suit, or other proceeding brought against it alleging infringement of Third Party intellectual property rights in connection with its activities under this Agreement. This Section 9.5 shall not be interpreted as placing on either Party a duty of inquiry regarding Third Party intellectual property rights.

9.6 Personnel Obligations. Prior to receiving any Confidential Information or beginning work under this Agreement relating to any research, Development or Commercialization of a Licensed Compound or a Product, each employee, agent or independent contractor of BMS or Alder or of either Party’s respective Affiliates shall be bound in writing by non-disclosure and invention assignment obligations which are consistent with the obligations of BMS or AlderHoldings (but, in the case of an agent or independent contractor, possibly subject to a shorter period of time with respect to non-disclosure obligations, provided that such period of time shall not be less than [***] from the effective date of the written obligation), as appropriate, in this Article 9, including without limitation: (a) promptly reporting any invention, discovery, process or other intellectual property right; (b) assigning (or, in the case of contractors, assigning or licensing) to BMS or AlderHoldings, as appropriate, all of his or her right, title and interest in and to any invention, discovery, process or other intellectual property right; (c) cooperating in the preparation, filing,

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prosecution, maintenance and enforcement of any patent and patent application; (d) performing all acts and signing, executing, acknowledging and delivering any and all documents required for effecting the obligations and purposes of this Agreement; and (e) abiding by the obligations of confidentiality and non-use set forth in Article 12. It is understood and agreed that such non-disclosure and invention assignment agreement need not reference or be specific to this Agreement.

9.7 Further Actions. Each Party shall, upon the reasonable request of the other Party, provide such assistance and execute such documents as are reasonably necessary for such Party to exercise its rights and/or perform its obligations pursuant to this Article 9; provided however, that neither Party shall be required to take any action pursuant to Article 9 that such Party reasonably determines in its sole judgment and discretion conflicts with or violates any applicable court or government order or decree or Applicable Law.

10. TRADEMARKS

10.1 Licensed Product Trademarks. BMS shall be solely responsible for the selection (including the creation, searching and clearing), registration, maintenance, policing and enforcement of all trademarks developed for use in connection with the marketing, sale or distribution of Licensed Products in the Licensed Field (the “Licensed Product Marks”) in the Territory. BMS shall own all Licensed Product Marks, and all trademark registrations for said marks.

10.2 Cancer Product Trademarks.

(a) In the case where BMS does not exercise the Option, Alder shall be solely responsible, subject to Section 10.2(d), for the selection (including the creation, searching and clearing), registration, maintenance, policing and enforcement of all trademarks developed for use in connection with the marketing, sale or distribution of Cancer Product in the Cancer Field (the “Cancer Product Marks”) in the Territory. In the case where BMS does not exercise the Option, AlderHoldings shall own the Cancer Product Marks and all corresponding trademark registrations therefor, in the Territory. [***].

(b) The provisions of this Section 10.2(b) apply only in the case where BMS exercises the Option. In the case where BMS exercises the Option, the Cancer Product Mark shall be selected by the JCC. The Cancer Product Mark shall be owned in the Alder Cancer Territory by AlderHoldings and shall be owned in the Cancer Territory by BMS. The Parties shall share equally the documented out-of-pocket costs incurred by the Parties in connection with the selection (including the creation, searching and clearing) of the Cancer Product Mark (including, for example, out-of-pocket costs for creating and searching the Cancer Product Mark), provided that in advance of any such cost being incurred, the JCC shall approve the work to be performed and a budget with respect to such costs (such shared costs being the “Shared Trademark Costs”). Unless the Parties agree otherwise, BMS shall be responsible for conducting the creation, searching and clearing (but not the selection, which shall be made by the JCC) for the Cancer Product Mark (subject to the cost sharing as set forth in the preceding sentence). Alder shall be solely responsible for the registration, maintenance and defense, and all costs with respect to such registration, maintenance and defense, of the Cancer Product Mark in the Alder Cancer Territory, and BMS shall be solely responsible for the registration, maintenance and defense, and all costs with respect to such registration, maintenance and defense, of the Cancer Product Mark in the in the Cancer Territory. The selection process (including the creation, searching and clearing) for the Cancer Product Mark shall be initiated by the Parties at least one year prior to the projected date of the first MAA (including BLA) filing date for the Co-Developed Product.

(c) The provisions of this Section 10.2(c) apply only in the case where BMS exercises the Option. As an alternative to the foregoing under Section 10.2(b), BMS shall have the right to select a Cancer Product Mark for use in the Cancer Territory that is [***]

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[***] to be used in the Alder Cancer Territory. In such case, (i) subject to Section 10.2(d), Alder would be solely responsible, at its cost, for the selection (including the creation, searching and clearing), registration, maintenance and defense of Cancer Product Mark for use in the Alder Cancer Territory and (ii) BMS would be solely responsible, at its cost, for the selection (including the creation, searching and clearing), registration, maintenance and defense of Cancer Product Mark for use in the Cancer Territory. BMS shall notify Alder in writing, at least one year prior to the projected date of the first MAA (including BLA) filing date for the Co-Developed Product, whether BMS will apply the provisions of Section 10.2(b) or this Section 10.2(c).

(d) In its selection of the Cancer Product Mark as set forth in Section 10.2(a), (b) and (c) each Party shall submit to the JCC any proposed trademark being considered by such Party as the Cancer Product Mark. Such proposed trademark will be reviewed by the JCC and in the case where BMS reasonably determines that the proposed trademark by Alder as a Cancer Product Mark [***], then BMS shall notify Alder regarding such determination within [***] after receiving Alder’s proposal, and upon request by BMS Alder shall discontinue further pursuing the use of such proposed trademark for use as the Cancer Product Mark and shall not pursue registration for such proposed trademark.

10.3 Use of Name. Neither Party shall, without the other Party’s prior written consent, use any trademarks or house marks of the other Party (including the other Party’s corporate name), trademarks, advertising taglines or slogans confusingly similar thereto, in connection with such Party’s marketing or promotion of Products under this Agreement or for any other purpose, except as may be expressly authorized in writing in connection with activities under this Agreement and except to the extent required to comply with Applicable Law.

10.4 Patent Marking. BMS shall, and shall require its Affiliates and Sublicensees to, mark Licensed Products and Co-Developed Products sold by it hereunder (in a reasonable manner consistent with industry custom and practice) with appropriate patent numbers or indicia to the extent permitted by Applicable Law, in those countries in which such markings or such notices impact recoveries of damages or equitable remedies available with respect to infringements of patents.

10.5 Further Actions. Each Party shall, upon the reasonable request of the other Party, provide such assistance and execute such documents as are reasonably necessary for such Party to exercise its rights and/or perform its obligations pursuant to this Article 10; provided however, that neither Party shall be required to take any action pursuant to Article 10 that such Party reasonably determines in its sole judgment and discretion conflicts with or violates any applicable court or government order or decree.

10.6 Advertising and Promotional Materials.

(a) Licensed Products in Licensed Field. BMS shall be solely responsible for creating all packaging and promotional materials for the Licensed Products in the Licensed Field in the Licensed Territory. BMS shall own all right, title and interest in and to any and all such promotional materials, including all applicable copyrights, trademarks (other than, as applicable, Alder’s name and logo), program names and domain names.

(b) Cancer Product in Cancer Field if BMS Does Not Exercise Option. In the case where BMS does not exercise the Option, (i) Alder shall be solely responsible for creating all packaging and promotional materials for the Cancer Product in the Cancer Field in the Alder Cancer Territory and (ii) AlderHoldings shall own all right, title and interest in and to any and all such promotional materials, including all applicable copyrights, trademarks, program names and domain names; subject in each case of clause (i) and (ii) to the other provisions of Article 10.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(c) Cancer Product in Cancer Field if BMS Exercises Option. In the case where BMS exercises the Option, (i) [***] shall be [***] responsible for creating all packaging and promotional materials for the Co-Developed Product in the Cancer Field [***], and [***] shall [***] right, title and interest in and to any and all such promotional materials, including all applicable copyrights, trademarks, program names and domain names, subject in each case to the other provisions of Article 10 and (ii) [***] shall be [***] responsible for creating all packaging and promotional materials for the Co-Developed Product in the Cancer Field [***], and [***] shall [***] right, title and interest in and to any and all such promotional materials, including all applicable copyrights, trademarks (other than, as applicable, [***]), program names and domain names.

(d) Use of Licensed Product Mark. No rights are granted under this Agreement to Alder to use the Licensed Product Marks. Alder shall not, without BMS’ prior written consent, use the Licensed Product Marks or marks confusingly similar thereto, in connection with Alder’s marketing or promotion of Cancer Product or for any other purpose.

11. EXCLUSIVITY

11.1 Exclusivity.

(a) Restriction on Alder. Alder agrees that it will not work independently of this Agreement during the term of the Agreement for itself or any Third Party with respect to discovery, research and/or development activities with respect to IL-6 Compounds and pharmaceutical products containing IL-6 Compounds in the Licensed Field in the Licensed Territory. For avoidance of doubt, AlderHoldings and/or its Affiliates shall be permitted to exercise its retained rights with respect to Cancer Product in the Cancer Field, subject to and in accordance with the terms and conditions of this Agreement.

(b) Restriction on BMS. BMS agrees that for the period of [***] following the Effective Date neither it nor its Affiliates will, directly or indirectly, by itself or with a Third Party, conduct any Phase 3 clinical trials or later clinical trials or seek regulatory approval of any Competing Product within the Licensed Field in the Licensed Territory (or within the Cancer Field if BMS has exercised the Option). In addition, BMS agrees that, on a country-by-country basis in the Licensed Territory from the date of the First Commercial Sale of a Licensed Product and for [***] thereafter in the applicable country, neither it nor its Affiliates will, directly or indirectly, by itself or with a Third Party, commercialize (i.e., promote, market, or sell) any Competing Product in the applicable country.

(c) Restricted Product. Notwithstanding Section 11.1(b), if BMS or any of its Affiliates, either through its own efforts or by acquisition, obtains ownership of or a license to, or is acquired by or otherwise merges with an entity that owns or has a license to, a Competing Product, in all such cases that would result in a violation of Section 11.1(b) above with respect to a particular country (each such Competing Product that would lead to such a violation being, a “Restricted Product”), then BMS or its Affiliate shall promptly notify Alder in writing and elect either to:

(i) divest itself of such Restricted Product in the applicable country or countries and notify Alder in writing of such divestiture (provided that such divestiture is completed within (9) months of such ownership or license, or being acquired by or merging with an entity that has such ownership or license);

(ii) pay to AlderHoldings a royalty on such Competing Product during the period that the sale of such Competing Product would result in a violation of Section 11.1(b) at a rate which is [***] of the royalty paid to AlderHoldings on Net Sales in such country of the Licensed Product in the Licensed Field (in the case where the Competing Product is sold for use in the Licensed Field) or Cancer

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Product in the Cancer Field (in the case where the Competing Product is sold for use in the Cancer Field), calculated in the same manner as for a Licensed Product in the Licensed Field (or as applicable Cancer Product in the Cancer Field) under Section 8.6, in which case, the sales of such Competing Product shall be aggregated together with the License Product or Cancer Product for the purpose of determining the applicable Base Royalty Rate for such Competing Product as well as for such Licensed Product or Cancer Product; or

(iii) terminate the Agreement with respect to the applicable country and revert back to AlderHoldings all Licensed Products and all associated data and rights for use in the Licensed Field in such country and all Cancer Product and all associated data and rights for use in the Cancer Field in such country (for clarity, BMS would remain responsible for any contractual obligations to third parties with respect to such terminated products).

If BMS or its Affiliate elects to divest itself of such Restricted Product under clause (i) above, such divestiture shall occur by an outright sale to a Third Party of all of BMS’ and its Affiliate’s rights to such Restricted Product or by an outlicense arrangement under which BMS has no continuing involvement in the development or commercialization of such Restricted Product.

12. CONFIDENTIALITY

12.1 Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, each Party (the “Receiving Party”) agrees that, for the Term and for [***] thereafter, it shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement (which includes the exercise of any rights or the performance of any obligations hereunder) any Confidential Information furnished to it by the other Party (the “Disclosing Party”) pursuant to this Agreement except for that portion of such information or materials that the Receiving Party can demonstrate by competent written proof:

(a) was already known to the Receiving Party or its Affiliate, other than under an obligation of confidentiality to the Disclosing Party, at the time of disclosure by the other Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the Receiving Party in breach of this Agreement;

(d) is subsequently disclosed to the Receiving Party or its Affiliate by a Third Party without obligations of confidentiality to the Disclosing Party with respect thereto; or

(e) is subsequently independently discovered or developed by the Receiving Party or its Affiliate without the aid, application, or use of Confidential Information of the Disclosing Party.

Notwithstanding the definition of “Confidential Information” in Article 1, all Information generated under the Collaboration, whether generated by one or both Parties, shall be deemed the Confidential Information of both Parties (i.e., both Parties shall be deemed to be the Receiving Party with respect to such Information). For clarity, any Information generated during or resulting from the Collaboration that is generated by a Party may be used by such Party for any purpose that does not violate Article 11 or Applicable Law, subject to any [***] license grant to a Party under Article 7 or Article 13; provided that the disclosure of such Information to Third Parties shall be governed by this Article 12.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

12.2 Authorized Disclosure. Each Party may disclose Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the following situations:

(a) filing or prosecuting Collaboration Patents in accordance with Article 9;

(b) subject to Section 12.3, regulatory filings and other filings with Governmental Authorities (including Regulatory Authorities), including filings with the SEC or FDA, as necessary for the Development or Commercialization of a Product, as required in connection with any filing, application or request for Approval, provided however, that reasonable measures will be taken to assure confidential treatment of such information;

(c) prosecuting or defending litigation;

(d) complying with Applicable Law, including regulations promulgated by securities exchanges;

(e) disclosure to its Affiliates, employees, agents, and independent contractors, and any Sublicensees of Collaboration Technology only on a need-to-know basis and solely in connection with the performance of this Agreement, provided that each disclosee must be bound by obligations of confidentiality and non-use at least as equivalent in scope as and no less restrictive than those set forth in this Article 12 prior to any such disclosure;

(f) disclosure of the material terms of this Agreement to any bona fide potential or actual investor, investment banker, acquirer, merger partner, collaborator, sublicensee, distributor, or other potential or actual financial partner; provided that in connection with such disclosure, the disclosing Party shall use all reasonable efforts to inform each disclosee of the confidential nature of such Confidential Information and cause each disclosee to treat such Confidential Information as confidential;

(g) disclosure of any Collaboration results or status reports (including data from any Clinical Trials) to any bona fide potential or actual investor, investment banker, acquirer, merger partner, collaborator, sublicensee, or other potential or actual financial partner; provided that (i) each disclosee must be bound by obligations of confidentiality and non-use at least as equivalent in scope as and no less restrictive than those set forth in this Article 12 prior to any such disclosure, and (ii) the disclosing Party submits the contents of such proposed disclosure to the other Party at least [***] prior to such disclosure, but the disclosing Party shall not be required to disclose the identity of the disclosee; and

(h) disclosure pursuant to Section 12.5.

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Sections 12.2(a), 12.2(c) or 12.2(d), it will, except where impracticable, give reasonable advance notice to the other Party of such disclosure and use reasonable efforts to secure confidential treatment of such information. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder.

Notwithstanding the foregoing, either Party may disclose without any limitation such Party’s U.S. federal income tax treatment and the U.S. federal income tax structure of the transactions relating to such Party that are based on or derived from this Agreement, as well as [***] materials [***] relating to such tax treatment or tax structure, except to the extent that nondisclosure of such matters is reasonably necessary in order to comply with applicable securities laws.

12.3 Publicity; Terms of Agreement.

(a) The Parties agree that the material terms of this Agreement are the Confidential Information of both Parties, subject to the special authorized disclosure provisions set forth in Section 12.2 and this Section 12.3. The Parties have agreed to make a joint public announcement of the execution of this Agreement substantially in the form of the press release attached as Exhibit G on or after the Signing Date.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(b) After release of such joint press release, if either Party desires to make a public announcement concerning the material terms of this Agreement that have not been disclosed in such joint press release, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided herein), such approval not to be unreasonably withheld, except that in the case of a press release or governmental filing required by law (where reasonably advised by the disclosing Party’s counsel), the disclosing Party shall provide the other Party with such advance notice as it reasonably can and shall not be required to obtain approval therefor. A Party commenting on such a proposed press release shall provide its comments, if any, within five (5) business days after receiving the press release for review and the other Party shall give good faith consideration to same. Alder shall have the right to make a press release announcing the achievement of each milestone under this Agreement as it is achieved, and the achievements of Regulatory Approvals as they occur, subject only to the review procedure set forth in the preceding sentence. In relation to BMS’ review of such an announcement, BMS may make specific, reasonable comments on such proposed press release within the prescribed time for commentary, but shall not withhold its consent to disclosure of the information that the relevant milestone or Regulatory Approval has been achieved and triggered a payment hereunder. Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement that have already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 12.3.

(c) The Parties acknowledge that either or both Parties may be obligated to file under Applicable Law a copy of this Agreement with the SEC or other Government Authorities. Each Party shall be entitled to make such a required filing, provided that it requests confidential treatment of at least the commercial terms and sensitive technical terms hereof and thereof to the extent such confidential treatment is reasonably available to such Party. In the event of any such filing, each Party will provide the other Party with a copy of the Agreement marked to show provisions for which such Party intends to seek confidential treatment and shall reasonably consider and incorporate the other Party’s comments thereon to the extent consistent with the legal requirements, with respect to the filing Party, governing disclosure of material agreements and material information that must be publicly filed.

12.4 Publications. Neither Party shall publicly present or publish results of studies carried out under this Agreement (each such presentation or publication a “Publication”) without the opportunity for prior review by the other Party, except to the extent otherwise required by Applicable Law in which case Section 12.2(b) shall apply with respect to disclosures required by the SEC and/or for regulatory filings. The submitting Party shall provide the other Party the opportunity to review any proposed Publication at least thirty [***] prior to the earlier of its presentation or intended submission for publication. The submitting Party agrees, upon request by the other Party, not to submit or present any Publication until the other Party has had [***] to comment on any material in such Publication. The submitting Party shall consider the comments of the other Party in good faith, but will retain the sole authority to submit the manuscript for Publication. The submitting Party shall provide the other Party a copy of the Publication at the time of the submission or presentation. Notwithstanding the foregoing, BMS shall not have the right to publish or present Alder’s Confidential Information without Alder’s prior written consent, and Alder shall not have the right to publish or present BMS’ Confidential Information without BMS’ prior written consent. Each Party agrees to acknowledge the contributions of the other Party, and the employees of the other Party, in all publications as scientifically appropriate. This Section 12.4 shall not limit and shall be subject to Section 12.5.

Nothing contained in this Section 12.4 shall prohibit the inclusion of information in a patent application claiming, and in furtherance of, the manufacture, use, sale or formulation of a Licensed Compound, provided, the non-filing Party is given a reasonable opportunity to review and approve the information to be included prior to submission of such patent application, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, the Parties recognize that independent investigators have been engaged, and will be engaged in the future, to conduct Clinical Trials of Licensed Compounds and Products. The Parties recognize that such investigators operate in an academic environment and may release

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information regarding such studies in a manner consistent with academic standards; provided, that each Party will use reasonable efforts to prevent publication prior to the filing of relevant patent applications and to ensure that no Confidential Information of either Party is disclosed.

12.5 Publication and Listing of Clinical Trials and Compliance with other Policies, Orders and Agreements.

(a) The Parties agree to comply, with respect to the Licensed Compounds and Products, with (i) the Pharmaceutical Research and Manufacturers of America (PhRMA) Guidelines on the listing of Clinical Trials and the Publication of Clinical Trial results, (ii) BMS’ Research and Development policy concerning Clinical Trials Registration and Disclosure of Results as amended from time to time, a copy of which policy as currently in effect (Clinical Trial Directive CT DIR 003 effective July 16, 2007) has been provided by BMS to Alder prior to the Signing Date, (iii) the agreement of BMS concerning disclosure of BMS-sponsored clinical trials set forth in [***] entered into by BMS [***] that related to the Bristol-Myers Squibb investigational compound [***], a copy of which [***] is attached hereto as Exhibit H and (iv) any other BMS policies or other policies adopted by it for the majority of its other pharmaceutical products with regard to the same (to the extent the same either are not in direct conflict with the Guidelines, policies and [***] referred to in clauses (i) and (iii) above and, in the case of Alder, to the extent such policies are provided by BMS to Alder in writing).

(b) Disclosure of Grant Requests. Each Party reserves the right to disclose, at its sole discretionthe following information regarding Grant Requests (as defined below): grantee, dates, amount and timing of grant, and subject matter of grant. Neither Party shall have any obligation to notify or seek the consent or approval of the other Party in connection with any such disclosure, provided such disclosure is limited to those items listed in the foregoing sentence or is otherwise required by law. Any items, to the extent such items are Confidential Information of the other Party, that the disclosing Party seeks to disclose in addition to those enumerated in the first sentence shall require the consent of the other Party. For purposes of this paragraph, “Grant Requests” means applications for (i) independent medical education grants, (ii) charitable contributions (e.g., 501(c)(3) contributions) and (iii) other corporate giving activities (excluding research funding). Although these disclosures are currently intended to encompass payments in these three categories that are made in the U.S., they may also include payments made to an organization anywhere in the world, as determined by such disclosing Party based on disclosure standards then prevailing.

12.6 Termination of Prior CDA. This Agreement terminates, as of the Signing Date, the Prior CDA. All Information exchanged between the Parties under the Prior CDA shall be deemed Confidential Information of the corresponding Party under this Agreement and shall be subject to the terms of this Article 12.

13. TERM AND TERMINATION

13.1 Term. This Agreement shall become effective on the Effective Date and, unless earlier terminated pursuant to this Article 13, shall continue until the expiration, on a Product-by-Product and country-by-country basis, of the applicable Royalty Term (including any recommenced Royalty Term pursuant to Section 8.7(a)(i) or (ii)) with respect to the Product and country (the “Term”). Upon such expiration of the Term (i.e., in the case where there is no earlier termination pursuant to this Article 13), on a Product-by-Product and country-by-country basis, the licenses granted to BMS under Article 7 with respect to Alder Know-How shall convert to [***] license solely with respect to the applicable Product and country; all other licenses granted to BMS under Article 7 with respect to the applicable Product and country shall expire upon such expiration of the Term.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

13.2 Termination by BMS at Will or for Safety Reasons.

(a) Licensed Field.

(i) Termination by BMS at Will. BMS may terminate the Agreement as a whole or on a Region-by-Region basis, with respect to all Licensed Products and with respect to the entire Licensed Field, effective upon [***] prior written notice in the case where Approval has not been obtained in the applicable Region for any Licensed Product in the Licensed Field or upon [***] prior written notice in the case where Approval has been obtained in the applicable Region for any Licensed Product in the Licensed Field; provided however, that: (i) BMS may not provide such notice until after the earlier of (1) BMS’ receipt of topline results from the first Phase 2b Clinical Trial for the ALD518 LF Product and (2) [***]; (ii) BMS’ rights with respect to all Licensed Products in the Licensed Field will terminate for all Regions if BMS terminates its rights in the Licensed Field with respect to both the US Region and the Europe Region, or if BMS terminates its rights in the Licensed Field with respect to the US Region or the Europe Region at a time after its rights in the Licensed Field have already been terminated (whether pursuant to this Section 13.2(a) or pursuant to Section 13.3(a) or 13.4(a)) with respect to the Europe Region or the US Region, respectively; and (iii) BMS shall continue to be responsible, for the longer of (1) a period of [***] after the effective date of such termination and (2) the period from the effective date of such termination until [***], for all costs of clinical trials under the Licensed Field Development Plan for any Licensed Product in the Licensed Field in or with respect to the terminated Region(s) that were Initiated prior to the date of the notice of termination. The term “Initiated” as used in this Article 13 in referring to a clinical trial for a Product, means that (i) the first dosing of a human subject in the clinical trial has occurred or (ii) a written agreement for the conduct of the clinical trial has been executed with BMS or its Affiliate or sublicensee (or, with respect to Co-Developed Product, executed by BMS, Alder, an Affiliate or a licensee of Alder) and such agreement and/or the clinical trial pursuant to such agreement cannot be canceled or terminated prior to the first dosing of human subjects in the clinical trial without the payment of a fee (unless BMS elects at its discretion to pay such fees to Alder, in which case such canceled or terminated clinical trial will not be considered to be Initiated regardless as to whether Alder continues such clinical trial). No milestone payments will be due on milestones achieved during the period between the notice of termination and the effective date of termination.

(ii) Termination by BMS for Safety Reasons. BMS may terminate the Agreement in the Licensed Territory as a whole with respect to all Licensed Products and with respect to the entire Licensed Field upon written notice to Alder based on Safety Reasons; such termination for Safety Reasons shall be subject to this Section 13.2(a)(ii) and Section 13.10, unless Alder disputes the existence of a Safety Termination and such dispute is resolved pursuant to Section 16.2 in Alder’s favor, in which case such termination shall be subject to Section 13.2(a)(i). Upon such termination for Safety Reasons, BMS shall be responsible at its expense for the wind-down of any Development (including without limitation any clinical trials for the Licensed Product being conducted by or on behalf of BMS) and any Commercialization activities for the Licensed Products. Such termination shall become effective upon the date that BMS notifies Alder in writing that such wind-down is complete. [***].

(b) Cancer Field.

(i) Termination by BMS at Will. [***], BMS may terminate the Agreement as a whole or on a Region-by-Region basis, with respect to all Cancer Products and with respect to the entire Cancer Field, effective upon [***] prior written notice in the case where Approval has not been obtained in the applicable Region for any Cancer Product in the Cancer Field or upon [***] prior written notice in the case where Approval has been obtained in the applicable Region for any Cancer Product in the

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Cancer Field; provided however, that: (i) BMS’ rights with respect to all Licensed Products in the Licensed Field will terminate for the entire Cancer Territory if BMS terminates its rights in the Licensed Field with respect to the Europe Region; and (ii) BMS shall continue to be responsible, for the longer of (1) a period of [***] after the effective date of such termination and (2) the period from the effective date of such termination until [***], for its share of Cancer Development Costs for clinical trials for any Cancer Product in the Cancer Field in or with respect to the terminated Region(s) that were Initiated prior to the date of the notice of termination. [***].

(ii) Termination by BMS for Safety Reasons. BMS may terminate the Agreement in Cancer Territory as a whole, with respect to all Co-Developed Products and with respect to the entire Cancer Field upon written notice to Alder based on Safety Reasons; such termination for Safety Reasons shall be subject to this Section 13.2(b)(ii) and Section 13.10, unless Alder disputes the existence of a Safety Termination and such dispute is resolved pursuant to Section 16.2 in Alder’s favor, in which case such termination shall be subject to Section 13.2(b)(i). Upon such termination for Safety Reasons, BMS shall be responsible at its expense for the wind-down of any (i) Development activities being conducted by or on behalf of BMS for the Co-Developed Product outside the Joint Cancer Development Plan (i.e., activities for which the costs are not included in the Cancer Development Costs) for the Co-Developed Products in the Cancer Territory and (ii) Commercialization activities for the Co-Developed Products in the Cancer Territory. Such termination shall become effective upon the date that BMS notifies Alder in writing that such wind-down is complete. BMS shall continue to be responsible for its share of Cancer Development Costs after such termination only to the extent that such Cancer Development Costs are incurred to wind-down and discontinue the Development activities under the Joint Cancer Development Plan. No milestone payments will be due on milestones achieved during the period between the notice of termination and the effective date of termination.

(c) As used herein, “Region” means each of: (A) the U.S., Canada and Mexico (the “US Region”); (B) Europe and Russia (the “Europe Region”); (C) Japan; (D) Australia and New Zealand; (E) China, South Korea, and Taiwan; (F) India; (G) all countries in Asia that are not included in (C), (E) or (F); (H) Central America and South America; and (I) the group of all other countries in the Territory.

13.3 Termination by Either Party for Breach.

(a) Breach by BMS.

(i) Licensed Field. Subject to Section 13.3(c) and 13.3(d), Alder shall have the right to terminate this Agreement with respect to all Licensed Products in the Licensed Field in a particular Region upon written notice to BMS if BMS materially breaches any material obligation under this Agreement (other than any breach as described under Section 13.4) that pertains to one or more Licensed Products in the Licensed Field in such Region and, after receiving written notice from Alder identifying such material breach by BMS in reasonable detail, fails to cure such material breach within [***] from the date of such notice (or within [***] from the date of such notice in the event such material breach is solely based upon BMS’ failure to pay any amounts due Alder hereunder); provided however, that: (1) Alder may terminate BMS’ rights with respect to all Licensed Products in the Licensed Field for all Regions if (A) BMS’ material breach with respect to a Licensed Product in the Licensed Field pertains to both the US Region and the Europe Region, (B) BMS’ material breach with respect to a Licensed Product in the Licensed Field pertains to the US Region or the Europe Region at a time after BMS’ rights in the Licensed Field have already been terminated (whether pursuant to this Section 13.3(a) or pursuant to Section 13.2(a) or 13.4(a)) with respect to the Europe Region or the US Region, respectively or (C) BMS’ material breach with respect to a Licensed Product in the Licensed Field

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does not pertain to any particular Region; and (2) BMS shall continue to be responsible, for the longer of (A) a period of [***] after the effective date of such termination and (B) the period from the effective date of such termination [***], for all costs of clinical trials under the Licensed Field Development Plan for any Licensed Product in the Licensed Field in or with respect to the terminated Region(s) that were Initiated prior to the date of the notice of termination.

(ii) Cancer Field. Subject to Section 13.3(c) and 13.3(d), at any time after BMS’ exercise of the Option, Alder shall have the right to terminate this Agreement with respect to all Cancer Products in the Cancer Field in a particular Region upon written notice to BMS if BMS materially breaches any material obligation under this Agreement (other than any breach as described under Section 13.4) that pertains to one or more Cancer Products in the Cancer Field in such Region and, after receiving written notice from Alder identifying such material breach by BMS in reasonable detail, fails to cure such material breach within [***] from the date of such notice (or within [***] from the date of such notice in the event such material breach is solely based upon BMS’ failure to pay any amounts due Alder hereunder); provided however, that: (1) Alder may terminate BMS’ rights with respect to all Cancer Products in the Cancer Field for all Regions if BMS’ material breach with respect to a Cancer Product in the Cancer Field pertains to the Europe Region or does not pertain to any particular Region; and (2) BMS shall continue to be responsible, for the longer of (A) a period of [***] after the effective date of such termination and (B) the period from the effective date of such termination until [***], for its share of Cancer Development Costs for clinical trials for any Cancer Product in the Cancer Field in or with respect to the terminated Region(s) that were Initiated prior to the date of the notice of termination.

(iii) Licensed Field and Cancer Field. Subject to Section 13.3(c) and 13.3(d), Alder shall have the right to terminate this Agreement with respect to all Licensed Products in the Licensed Field in all Regions and, if BMS has exercised the Option, all Cancer Products in the Cancer Field in all Regions upon written notice to BMS if BMS materially breaches any material obligation under this Agreement that is not specific to either Licensed Products or Cancer Products and, after receiving written notice from Alder identifying such material breach by BMS in reasonable detail, fails to cure such material breach within [***] from the date of such notice (or within [***] from the date of such notice in the event such material breach is solely based upon BMS’ failure to pay any amounts due Alder hereunder); provided however, that BMS shall continue to be responsible, for the longer of (1) a period of [***] after the effective date of such termination and (2) the period from the effective date of such termination until [***], for (A) all costs of clinical trials under the Licensed Field Development Plan for any Licensed Product in the Licensed Field that were Initiated prior to the date of the notice of termination and (B) its share of Cancer Development Costs for clinical trials for any Cancer Product in the Cancer Field that were Initiated prior to the date of the notice of termination.

(b) Breach by Alder.

(i) Licensed Field. Subject to Section 13.3(c), BMS shall have the right to terminate this Agreement upon written notice to Alder with respect to all Licensed Products in the Licensed Field in any or all Regions in the Licensed Territory if Alder materially breaches any material obligation under this Agreement with respect to Licensed Products in the Licensed Field and, after receiving written notice from BMS identifying such material breach by Alder in reasonable detail of its obligations under this Agreement, fails to cure such material breach within [***] from the date of such notice.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(ii) Cancer Field. Subject to Section 13.3(c), at any time after BMS’ exercise of the Option, BMS shall have the right to terminate this Agreement upon written notice to Alder with respect to all Cancer Products in the Cancer Field in any or all Regions in the Cancer Territory if Alder materially breaches any material obligation under this Agreement (other than any breach as described under Section 13.13) and, after receiving written notice from BMS identifying such material breach by Alder in reasonable detail of its obligations under this Agreement, fails to cure such material breach within [***] from the date of such notice.

(iii) Licensed Field and Cancer Field. Subject to Section 13.3(c), BMS shall have the right to terminate this Agreement with respect to all Licensed Products in the Licensed Field in any or all Regions and, if BMS has exercised the Option, all Cancer Products in the Cancer Field in any or all Regions upon written notice to Alder if Alder materially breaches any material obligation under this Agreement that is not specific to either Licensed Products or Cancer Products and, after receiving written notice from Alder identifying such material breach by BMS in reasonable detail, fails to cure such material breach within [***] from the date of such notice.

(c) Disputed Breach. If the alleged breaching Party disputes in good faith the existence or materiality of a breach specified in a notice provided by the other Party in accordance with Section 13.3(a) or 13.3(b), and such alleged breaching Party provides the other Party notice of such dispute within [***] after receiving notice of such breach (or [***] after notice if the applicable cure period is [***]), then the non-breaching Party shall not have the right to terminate this Agreement under Section 13.3(a) or 13.3(b) unless and until an arbitrator, in accordance with Article 16, has determined that the alleged breaching Party has materially breached the Agreement and that such Party fails to cure such breach within [***] following such arbitrator’s decision (except to the extent such breach involves the failure to make a payment when due, which breach must be cured within [***] following such arbitrator’s decision). It is understood and agreed that during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

(d) This Section 13.3 shall be subject to and shall not limit the provisions of Section 13.4. For avoidance of doubt, Section 13.3(a) and 13.3(c) shall not apply to a breach (or alleged breach) of BMS’ obligation to use Diligent Efforts as set forth in Section 3.1 or 5.4, which breach shall be subject to Section 13.4.

(e) [***]; provided however, if the allegedly breaching Party provides notice of a dispute pursuant to Section 13.3(c) and such dispute is resolved in a manner in which no termination of the Agreement occurs, then upon such resolution BMS will promptly [***].

13.4 Termination by Alder for Failure of BMS to Use Diligent Efforts.

(a) Licensed Field. Subject to Section 13.4(c) and 13.4(d), Alder shall have the right to terminate this Agreement on a Region-by-Region basis with respect to all Licensed Products in the Licensed Field if BMS is in material breach of its obligation to use Diligent Efforts as set forth in Section 3.1 or 5.4 with respect to such Region; provided however, (i) such license shall not so terminate unless (A) BMS is given [***] prior written notice by Alder of Alder’s intent to terminate, stating the reasons and justification for such termination and recommending steps which Alder believes BMS should take to cure such alleged breach, and (B) BMS, or its Sublicensee, has not (1) during the [***] period following such notice, provided Alder with a plan (reasonably agreed to by Alder) for the diligent Development and/or Commercialization of Licensed Products in the Licensed Field in such Region as set forth in Sections 3.1 and

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

5.4 and (2) during the [***] period following such notice carried out such plan and cured such alleged breach by diligently pursuing the Development and/or Commercialization of Licensed Products in the Licensed Field in such Region as set forth in Sections 3.1 and 5.4; (ii) Alder may terminate BMS’ rights with respect to all Licensed Products in the Licensed Field for all Regions if (A) BMS’ material diligence breach with respect to a Licensed Product in the Licensed Field pertains to both the US Region and the Europe Region or (B) BMS’ material diligence breach with respect to a Licensed Product in the Licensed Field pertains to the US Region or the Europe Region at a time after BMS’ rights in the Licensed Field have already been terminated (whether pursuant to this Section 13.4(a) or pursuant to Section 13.2(a) or 13.3(a)) with respect to the Europe Region or the US Region, respectively; and (iii) BMS shall continue to be responsible, for the longer of (A) a period of [***] after the effective date of such termination and (B) the period from the effective date of such termination until [***], for all costs of clinical trials under the Licensed Field Development Plan for any Licensed Product in the Licensed Field in or with respect to the terminated Region(s) that were Initiated prior to the date of the notice of termination. For clarity, it is understood and acknowledged that Diligent Efforts in the Development of a Licensed Product in a particular Region may include sequential implementation of clinical trials and/or reasonable intervals between clinical trials for data interpretation and clinical program planning and approval, to the extent such implementation and/or intervals are appropriate in view of the scientific, technical and commercial factors relevant to Development of such Licensed Product in such Region.

This Section 13.4(a) shall be subject to the following: (x) if BMS is satisfying its obligations to use Diligent Efforts as set forth in Sections 3.1 and 5.4 with respect to Licensed Products in the Licensed Field for any three (3) Major European Countries, then BMS shall be in compliance with such Diligent Efforts obligations with respect to Licensed Products in the Licensed Field in the Europe Region, and Alder shall not have the right to terminate this Agreement with respect to Licensed Products in the Licensed Field in the Europe Region, (y) if the applicable termination event relates to a country outside the EU from which Licensed Product is permitted under Applicable Law in the U.S. to be imported for sale into the U.S. without a BLA approval being obtained in the U.S., then Alder shall not have the right to terminate the license with respect to such country if BMS is then in compliance with its obligations to use Diligent Efforts under Sections 3.1 and 5.4 for Licensed Product with respect to the U.S. and (z) if the applicable termination event relates to a country other than the U.S. from which Licensed Product is permitted under Applicable Law in the EU to be imported for sale into the EU without a MAA approval being obtained in the EU, then Alder shall not have the right to terminate the license with respect to such country if BMS is then in compliance with its obligations to use Diligent Efforts under Sections 3.1 and 5.4 for Licensed Product with respect to the EU.

(b) Cancer Field. Subject to Sections 13.4(c) and 13.4(d), Alder shall have the right to terminate this Agreement on a Region-by-Region basis with respect to all Cancer Products in the Cancer Field if BMS is in material breach of its obligation to use Diligent Efforts as set forth in Section 3.4 or 5.4 with respect to such Region; provided however, (i) such license shall not so terminate unless (A) BMS is given [***] prior written notice by Alder of Alder’s intent to terminate, stating the reasons and justification for such termination and recommending steps which Alder believes BMS should take to cure such alleged breach, and (B) BMS, or its Sublicensee, has not (1) during the [***] period following such notice, provided Alder with a plan (reasonably agreed to by Alder) for the diligent Development and/or Commercialization of Cancer Product in the Cancer Field in such Region as set forth in Sections 3.4 and 5.4 and (2) during the [***] period following such notice carried out such plan and cured such alleged breach by diligently pursuing the Development and/or Commercialization of Cancer Products in the Cancer Field in such Region as set forth in Sections 3.4 and 5.4; (ii) Alder may terminate BMS’ rights with respect to all Cancer Products in the Cancer Field for all Regions if BMS’ material diligence breach with respect to a Cancer Product in the Cancer Field pertains to the Europe Region; and (iii) BMS shall continue to be responsible, for the longer of (A) a period of [***] after the effective date of such termination and (B) the period from the effective date of such termination until [***], for its share of all Cancer Development Costs of clinical trials for any Cancer Product in the Cancer Field in or with respect to the terminated Region(s) that were Initiated prior to the date of the notice of termination. For clarity, it is understood and acknowledged that Diligent Efforts in the Development of a

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Cancer Product in a particular Region may include sequential implementation of clinical trials and/or reasonable intervals between clinical trials for data interpretation and clinical program planning and approval, to the extent such implementation and/or intervals are appropriate in view of the scientific, technical and commercial factors relevant to Development of such Cancer Product in such Region.

This Section 13.4(b) shall be subject to the following: (x) if BMS is satisfying its obligations to use Diligent Efforts as set forth in Sections 3.4 and 5.4 with respect to Cancer Products in the Cancer Field for any [***], then BMS shall be in compliance with such Diligent Efforts obligations with respect to Cancer Products in the Cancer Field [***], and Alder shall not have the right to terminate this Agreement with respect to Cancer Products in the Cancer Field in the Europe Region, and (y) if the applicable termination event relates to a country from which Cancer Product is permitted under Applicable Law in the EU to be imported for sale into the EU without a MAA approval being obtained in the EU, then Alder shall not have the right to terminate the license with respect to such country if BMS is then in compliance with its obligations to use Diligent Efforts under Sections 3.4 and 5.4 for Cancer Product with respect to the EU.

(c) If BMS disputes in good faith the existence or materiality of an alleged breach specified in a notice provided by Alder pursuant to Section 13.4(a) or 13.4(b) (or if the Parties do not agree on a plan as set forth in Section 13.4(a) or 13.4(b)), and BMS provides notice to Alder of such dispute within [***] following such notice provided by Alder, Alder shall not have the right to terminate this Agreement unless and until the existence of such material breach or failure by BMS has been determined in accordance with Article 16 and BMS fails to cure such breach within [***] following such determination. It is understood and acknowledged that during the pendency of such a dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder. It is further understood and acknowledged that BMS shall remain obligated to pay to AlderHoldings the applicable milestone payment for each milestone achieved with respect to the applicable Region during the period between the notice of termination under this Section 13.4 and the resolution of such dispute, provided such dispute is resolved in a manner in which no termination of the Agreement occurs.

13.5 Effects of Termination of the Agreement with Respect to the Licensed Field. Upon termination of this Agreement by BMS under Section 13.2(a) or 13.10 or by Alder under Section 13.3(a)(i), 13(a)(iii) or 13.4(a), the following shall apply with respect to the terminated Region(s) (in addition to any other rights and obligations under Section 13.2, 13.3, 13.4 and Section 13.8 or otherwise under this Agreement with respect to such termination):

(a) Licenses. The licenses granted to BMS in Section 7.4 shall terminate solely with respect to the Regions in which the termination becomes effective. BMS hereby grants to AlderHoldings, effective only upon such termination, [***] license, with the right to grant sublicenses, under the BMS Technology solely to make[***], use, import, export, offer for sale, and sell Licensed Products under clinical Development and/or are being Commercialized as of the effective date of such termination solely with respect to the Regions in which the termination becomes effective. The BMS Technology licensed to AlderHoldings under this Section 13.5(a) shall not include any Patent that is licensed to BMS and/or its Affiliates by a Third Party under a license agreement unless (1) Alder agrees in writing (after being notified by BMS with respect to the substantive terms of the Third Party license agreement) that such licensed Patent is to being included in the definition of BMS Technology for purposes of being licensed to AlderHoldings under this Section 13.5(a) and (2) AlderHoldings assumes (i) all payment obligations pursuant to such license agreement that are applicable to the Development or Commercialization of Licensed Product and (ii) other obligations of such license agreement that are applicable to sublicensees thereunder in connection with the Development or Commercialization of Licensed Product.

(b) Licensed Product Marks. BMS shall assign (or alternatively, at BMS’ discretion, exclusively license) to AlderHoldings all right, title and interest in and to the Licensed Product Marks solely with respect to the Regions in which the termination becomes effective (excluding any such Licensed Product Marks that include, in whole or part, any corporate name or logo of BMS or its Affiliate or Sublicensee).

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(c) Regulatory Materials. BMS shall transfer and assign to AlderHoldings all Regulatory Materials and Regulatory Approvals for Licensed Products with respect to the Regions in which the termination becomes effective that are Controlled by BMS or its Affiliates or Sublicensees.

(d) Transition Assistance. BMS shall promptly transfer to AlderHoldings all material data relating to any Licensed Product that has not previously been transferred to AlderHoldings or its Affiliates and that was generated by BMS, its Affiliates or Sublicensees in the Development of the Licensed Product. During the [***] period commencing on the effective date of termination, BMS shall offer such assistance as AlderHoldings or its Affiliates may reasonably request in connection with the transfer of such data and Alder shall reimburse BMS for its reasonable out-of-pocket costs incurred in connection with the provision of such assistance.

(e) Royalty to BMS. If this Agreement is terminated after BMS has [***], and launched, a Licensed Product in [***], and unless BMS has terminated this Agreement for Safety Reasons, Alder shall pay BMS a royalty on Net Sales of such Licensed Product in each country during the Royalty Term in such country equal to [***] of the Net Sales of such Licensed Product by Alder or its Affiliates or its (sub)licensees. If this Agreement is terminated before BMS has [***] for, and launched, a Licensed Product in [***], but after [***] for such Licensed Product and unless BMS has terminated this Agreement for Safety Reasons, Alder shall pay BMS a royalty on Net Sales of such Licensed Product in each country during the Royalty Term for the Licensed Product in such country equal to [***] of the Net Sales of such Licensed Product by Alder or its Affiliates or (sub)licensees; provided however, that no such royalty will be due if the Approval for such Licensed Product was not, in part, based upon data from [***]. If this Agreement is terminated before BMS has [***] for a Licensed Product, but after [***] for such Licensed Product and unless BMS has terminated this Agreement for Safety Reasons, Alder shall pay BMS a royalty on Net Sales of such Licensed Product in each country during the Royalty Term for such Licensed Product in such country equal to [***] of the Net Sales of such Licensed Product by Alder or its Affiliates or (sub)licensees; provided however, that no such royalty will be due if the Approval for such Licensed Product was not, in part, based upon data from [***]. The royalties set forth in this Section 13.5(e) shall be subject to the same terms as apply to BMS under Sections 8.6(d), 8.6(e), 8.6(f), and 8.8 through 8.17, mutatis mutandis. For clarity, this Section 13.5(e) shall apply to each country in a terminated Region with respect to Licensed Product for the Licensed Field.

(f) Remaining Inventories. Alder shall have the right to purchase from BMS any or all of the inventory of Licensed Compounds and Licensed Products held by BMS as of the date of termination (that are not committed to be supplied to any Third Party or Sublicensee, in the ordinary course of business, as of the date of termination) at a price equal to BMS’ Manufacturing Costs for such inventory. Alder shall notify BMS in writing within [***] after the date of termination whether Alder elects to exercise such right.

(g) Interim Supply. In the case where Alder notifies BMS in writing within [***] after the date of termination that Alder desires BMS to provide to Alder an interim supply of Licensed Compound and/or Licensed Product, BMS shall use Diligent Efforts to provide such supply in accordance with the terms of this Section 13.5(g). BMS’ obligation to provide such supply under this Section 13.5(g) shall only be for the period of [***] from the date of termination and BMS shall have no obligation to supply Licensed Compound and/or Licensed Product to Alder after such [***] period or, if earlier, Alder’s notification to BMS that Alder has obtained alternative, validated source of supply of Licensed Compound and/or Licensed Product, as applicable. Upon such request by Alder for such interim supply, the

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Parties shall enter into a supply agreement pursuant to which BMS will use Diligent Efforts to supply Licensed Compound and/or Product to Alder for such period ending [***] after the termination date. Alder shall use all reasonable commercial efforts to procure an alternative supply of Licensed Compound and/or Licensed Product as soon as possible following the effective date of the applicable termination. The Licensed Compound and/or Licensed Product shall be supplied at a supply price equal to BMS’ Manufacturing Costs for such Licensed Compound or Product supplied. The supply agreement shall reflect these provisions and shall contain such other customary terms as the Parties deem appropriate.

(h) BMS Negotiation Right. BMS’ right of negotiation as set forth in Section 7.10 shall terminate if the licenses granted to BMS in Section 7.4 terminate with respect to the US Region.

(i) Option. BMS’ Option as set forth in Section 7.9 shall terminate if Alder terminated the Agreement pursuant to Section 13.3(a)(i) or (iii) with respect to BMS’ material breach of any obligation set forth in Section 11.1.

13.6 Effects of Termination of the Agreement with Respect to the Cancer Field. Upon termination of this Agreement by BMS under Section 13.2(b) or 13.10 or by Alder under Section 13.3(a)(ii) or 13.3(a)(iii) or 13.4(b), the following shall apply with respect to the terminated Region(s) (in addition to any other rights and obligations under Section 13.2, 13.3, 13.4 and Section 13.8 or otherwise under this Agreement with respect to such termination):

(a) Licenses. The licenses granted to BMS in Section 7.9 shall terminate solely with respect to the Regions in which the termination becomes effective. BMS hereby grants to AlderHoldings, effective only upon such termination, [***] license, with the right to grant sublicenses, under the BMS Technology solely to make, have made, use, import, export, offer for sale, and sell Cancer Products under clinical Development and/or are being Commercialized as of the effective date of such termination solely with respect to the Regions in which the termination becomes effective. The BMS Technology licensed to AlderHoldings under this Section 13.6(a) shall not include any Patent that is licensed to BMS and/or its Affiliates by a Third Party under a license agreement unless (1) AlderHoldings agrees in writing (after being notified by BMS with respect to the substantive terms of the Third Party license agreement) that such licensed Patent is to being included in the definition of BMS Technology for purposes of being licensed to AlderHoldings under this Section 13.6(a) and (2) AlderHoldings assumes (i) all payment obligations pursuant to such license agreement that are applicable to the Development or Commercialization of Cancer Product in the Cancer Field in the Cancer Territory and (ii) other obligations of such license agreement that are applicable to sublicensees thereunder.

(b) Cancer Product Marks. BMS shall assign (or alternatively, at BMS’ discretion, exclusively license) to AlderHoldings all right, title and interest in and to the Cancer Product Marks solely with respect to the Regions in which the termination becomes effective (excluding any such Cancer Product Marks that include, in whole or part, any corporate name or logo of BMS or its Affiliate or Sublicensee).

(c) Regulatory Materials. BMS shall transfer and assign to AlderHoldings all Regulatory Materials and Regulatory Approvals for Cancer Products with respect to the Regions in which the termination becomes effective that are Controlled by BMS or its Affiliates or Sublicensees.

(d) Transition Assistance. BMS shall promptly transfer to AlderHoldings all material data relating to any Cancer Product that has not previously been transferred to AlderHoldings or its Affiliates and that was generated by BMS, its Affiliates or Sublicensees in the Development of the Cancer Product. During the [***] period commencing on the effective date of termination, BMS shall offer such assistance as AlderHoldings or its Affiliates may reasonably request in connection with the transfer of such data and Alder shall reimburse BMS for its reasonable out-of-pocket costs incurred in connection with the provision of such assistance.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(e) Royalty to BMS. If this Agreement is terminated after [***] for, and launched, a Cancer Product in the EU, and unless BMS has terminated this Agreement for Safety Reasons, Alder shall pay BMS a royalty on Net Sales of such Cancer Product in each country in the terminated Region during the Royalty Term in such country equal to [***] of the Net Sales of such Cancer Product by Alder or its Affiliates or its (sub)licensees. If this Agreement is terminated before [***] for, and launched, a Cancer Product in the EU, but after the [***] for such Cancer Product and unless BMS has terminated this Agreement for Safety Reasons, Alder shall pay BMS a royalty on Net Sales of such Cancer Product in each country in the terminated Region during the Royalty Term for the Cancer Product in such country equal to [***] of the Net Sales of such Cancer Product by Alder or its Affiliates or (sub)licensees; provided however, that no such royalty will be due if such Cancer Product was not, in part, based upon [***]. The royalties set forth in this Section 13.6(e) shall be subject to the same terms as apply to BMS under Sections 8.6(d), 8.6(e), 8.6(f), and 8.8 through 8.17, mutatis mutandis. For clarity, this Section 13.6(e) shall apply to each country in a terminated Region with respect to Cancer Product for the Cancer Field. For further clarity, this Section 13.6(e) shall not be interpreted as requiring Alder to make any payments to BMS with respect to Net Sales of Cancer Product in the United States by Alder or its Affiliates or sublicensees.

(f) Remaining Inventories. Alder shall have the right to purchase from BMS any or all of the inventory of Licensed Compounds and Cancer Products held by BMS as of the date of termination (that are not committed to be supplied to any Third Party or Sublicensee, in the ordinary course of business, as of the date of termination) at a price equal to BMS’ Manufacturing Costs for such inventory. Alder shall notify BMS in writing within [***] after the date of termination whether Alder elects to exercise such right.

(g) Interim Supply. In the case where Alder notifies BMS in writing within [***] after the date of termination that Alder desires BMS to provide to Alder an interim supply of Licensed Compound and/or Cancer Product, BMS shall use Diligent Efforts to provide such supply in accordance with the terms of this Section 13.6(g). BMS’ obligation to provide such supply under this Section 13.6(g) shall only be for the period of [***] from the date of termination and BMS shall have no obligation to supply Licensed Compound and/or Cancer Product to Alder after such [***] or, if earlier, Alder’s notification to BMS that Alder has obtained alternative, validated source of supply of Licensed Compound and/or Cancer Product, as applicable. Upon such request by Alder for such interim supply, the Parties shall enter into a supply agreement pursuant to which BMS will use Diligent Efforts to supply Licensed Compound and/or Product to Alder for such period ending [***] after the termination date,. Alder shall use all reasonable commercial efforts to procure an alternative supply of Licensed Compound and/or Cancer Product as soon as possible following the effective date of the applicable termination. The Licensed Compound and/or Cancer Product shall be supplied at a supply price equal to BMS’ Manufacturing Costs for such Licensed Compound or Cancer Product supplied. The supply agreement shall reflect these provisions and shall contain such other customary terms as the Parties deem appropriate.

(h) BMS Negotiation Right. BMS’ right of negotiation as set forth in Section 7.10 shall terminate.

13.7 Termination by BMS for Alder’s Material Breach.

(a) Licensed Field. If BMS terminates this Agreement under Section 13.3(b)(i) or (iii) on account of Alder’s uncured material breach with respect to Licensed Products in the Licensed Field at a time when the Option has expired without exercise, then this Agreement, including the licenses granted to BMS in Section 7.4 and the right of negotiation set forth in Section 7.10, shall terminate and the only provisions that will survive such termination are those set forth in Section 13.12. If BMS terminates this Agreement under Section 13.3(b)(i) or (iii) on account of Alder’s uncured material breach with respect to Licensed Products in the Licensed Field after BMS’ exercise of the Option or at a time prior to the expiration of the Option, then this Agreement shall terminate with respect to all Licensed Products in the Licensed Field in all Regions and all licenses granted to BMS in Section 7.4 shall terminate.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(b) Cancer Field. If BMS terminates this Agreement under Section 13.3(b)(ii) or (iii) on account of Alder’s uncured material breach with respect to Cancer Products in the Cancer Field, then this Agreement shall terminate with respect to all Cancer Products in the Cancer Field in all Regions, all licenses granted to BMS in Section 7.9 shall terminate and BMS’ right of negotiation as set forth in Section 7.10 shall terminate.

13.8 Termination as to One or More Regions. If a Party terminates this Agreement as to all Licensed Products in the Licensed Field for one or more Regions but not as to the entire Licensed Territory, then upon the effective date of such termination, the Licensed Territory shall be deemed to exclude such terminated Region(s), and this Agreement shall continue in force and effect as to Licensed Products in the Licensed Field solely for the non-terminated Region(s), if any. If a Party terminates this Agreement as to all Cancer Products in the Cancer Field for one or more Regions but not as to the entire Cancer Territory, then upon the effective date of such termination, the Cancer Territory shall be deemed to exclude such terminated Region(s), the Alder Cancer Territory shall be deemed to include such terminated Regions, and this Agreement shall continue in force and effect as to Cancer Products in the Cancer Field for the non-terminated Region(s), if any.

13.9 Assignment Back to AlderHoldings of Ex-US Core Patents. Upon termination of this Agreement for any reason with respect to any or all Regions with respect to the Licensed Product, BMS shall assign and does hereby assign to AlderHoldings or AlderHoldings’ designee its entire right, title and interest in and to each Ex-US Core Patent to which BMS obtained ownership rights pursuant to Section 7.2 for each terminated Region, and BMS appoints AlderHoldings its attorney in fact solely to make such re-assignments and authorizes AlderHoldings to make such re-assignments. In each case, BMS shall execute and deliver to AlderHoldings a deed(s) of such assignment, in a mutually agreeable form, within [***] after the effective date of termination. AlderHoldings shall be responsible for recording all such assignments and BMS and its successors and assigns shall (a) reasonably cooperate with AlderHoldings’ efforts to do so, including satisfying the assignment and recording requirements of relevant patent offices and (b) reimburse AlderHoldings for all documented out-of-pocket expenses incurred by AlderHoldings in connection with this Section 13.9. In addition, BMS hereby grants AlderHoldings an [***] license under its interest in the Ex-US Core Patents during the period from the effective date of the applicable termination until the applicable Ex-US Core Patents are actually re-assigned to AlderHoldings.

13.10 Exception for Termination for Safety Reasons. Any license granted to AlderHoldings and any obligation of BMS to supply Licensed Products under Section 13.5(g) or Cancer Products under Section 13.6(g) shall be of no force or effect with respect to any given Licensed Product or Cancer Product where BMS’ termination of Development and/or Commercialization of such Licensed Product or Cancer Product was due to Safety Reasons. “Safety Reasons” means it is BMS’ reasonable belief, after due inquiry and in a manner consistent with BMS’ then-current decision-making policies and procedures with respect to such a determination, that there is an [***] based upon: (i) [***] data, including data from [***]; or (ii) the observation of [***] after a Licensed Product or Cancer Product has been administered to or taken [***]. BMS shall provide Alder with all relevant data for such terminated Licensed Product or Cancer Product but shall not be obligated to assign to Alder any Regulatory Filings relating to such terminated Licensed Product or Cancer Product (but for clarity, shall assign the Ex-US Core Patents back to Alder). If Alder does not agree with BMS’ opinion that BMS’ termination was due to Safety Reasons, such dispute shall be handled in accordance with Section 16.2.

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13.11 Other Remedies. Termination or expiration of this Agreement for any reason shall not release either Party from any liability or obligation that already has accrued prior to such expiration or termination, nor affect the survival of any provision hereof to the extent it is expressly stated to survive such termination. Termination or expiration of this Agreement for any reason shall not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims, whether for damages or otherwise, that a Party may have hereunder or that may arise out of or in connection with such termination or expiration.

13.12 Survival. Termination or expiration of this Agreement shall not affect rights or obligations of the Parties under this Agreement that have accrued prior to the date of termination or expiration of this Agreement. Notwithstanding anything to the contrary, the following provisions shall survive and apply after expiration or termination of this Agreement: Sections 2.10, 2.11 (with respect to any payment incurred or accrued prior to such expiration or termination), 3.3 (with respect to any payment incurred or accrued prior to such expiration or termination), 4.1(a) (with respect to any payment incurred or accrued prior to such expiration or termination), 6.3 (with respect to any payment incurred or accrued prior to such expiration or termination), 6.4 (with respect to any payment incurred or accrued prior to such expiration or termination), 7.1, 7.3(g), 7.8, 7.14, 8.2 (with respect to any payment incurred or accrued prior to such expiration or termination), 8.14, 8.15, 8.16, 9.2, 9.3(c), 9.4 (but only with respect to Joint Patents that are not Alder Patents), 17.1, 17.5, 17.13, 17.14 and 17.16 and Articles 12 (other than Sections 12.4 and 12.5), 13 (other than Sections 13.13 and 13.14(b)), 15 and 16 (other than Section 16.1, it being understood that after such expiration or termination, all disputes under this Agreement shall be settled pursuant to Section 16.2). In addition, the other applicable provisions of Article 8 shall survive to the extent required to make final payments with respect to Net Sales incurred or accrued prior to the date of termination or expiration. For any surviving provisions requiring action or decision by a Committee or an Executive Officer, each Party will appoint representatives to act as its Committee members or Executive Officer, as applicable. All provisions not surviving in accordance with the foregoing shall terminate upon expiration or termination of this Agreement and be of no further force and effect.

13.13 Effect of Alder’s Breach of Payment Obligation for Cancer Development Costs.

(a) In the event that Alder breaches its obligation to pay for its share of Cancer Development Costs in accordance with Section 3.7 and, after receiving written notice from BMS identifying such material breach in reasonable detail, fails to cure such material breach within [***] from the date of such notice, then, subject to Section 13.13(b) and in addition to and without limiting BMS’ right under Section 13.3(b)(ii), for as long as Alder continues to owe to BMS and remains unable to pay to BMS any portion of Alder’s share of Cancer Development Costs, BMS (i) may take over responsibility from Alder for the Development of Co-Developed Product in the Cancer Field and (ii) may credit, against any payment due to Alder pursuant to Section 8.3, 8.4, 8.5 or 8.6, an amount equal to (w) such owed amount plus interest calculated in accordance with Section 8.16 if the original due date for such amount was [***] or less before the date the credit is taken or (x) [***] of such owed amount if the original due date for such amount was more than [***] before the date the credit is taken. In the case where Alder pays to BMS the amount owed prior to BMS taking the foregoing credit, Alder shall pay an amount equal to (y) such owed amount plus interest calculated in accordance with Section 8.16 if the original due date for such amount was [***] or less before the date the payment is made to BMS or (2) [***] of such owed amount if the original due date for such amount was more than [***] before the date the payment is made to BMS.

(b) If Alder disputes in good faith the existence of a breach specified in a notice provided by BMS in accordance with Section 13.13(a), and Alder provides BMS notice of such dispute within [***] after receiving notice of such breach, then BMS shall not have the right to invoke the provisions of Section 13.13(a) clauses (i) or (ii) unless and until an audit has been conducted in accordance with Section 3.7(e) confirming any amount owed by Alder to BMS and Alder fails to pay any such amount confirmed to be owed within [***] following the auditor’s determination of the amount owed, provided that in the case where there is a dispute as to whether certain costs are properly included in the Cancer Development Costs, such dispute shall be subject to resolution under Article 16 and then BMS shall not have the right to invoke the provisions of Section 13.13(a) clauses (i) or (ii) unless and until an arbitrator has made a determination with respect to such dispute in accordance with Article 16.

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(c) If Alder has not demonstrated its ability to pay for its share of Cancer Development Costs in accordance with Section 3.7 within [***] following BMS’ notice under Section 13.13(a), then upon written notice and request by BMS, Alder shall proceed with good faith efforts to negotiate and enter into a License with BMS or a Third Party.

13.14 Termination of the Cancer Development Program.

(a) Termination by BMS Without Cause. In the case where BMS desires to discontinue further participation in the Cancer Development Program and Alder desires to continue Development of the Cancer Product, BMS may terminate the Cancer Development Program and its rights with respect to the Cancer Field in accordance with Section 13.2, provided that BMS shall continue to be responsible for its share of all Cancer Development Costs incurred by Alder after the effective date of such termination for the period of [***] following such date of termination or, if longer, until [***]. All licenses granted to BMS upon exercise of the Option shall terminate, and the Alder Cancer Territory [***], upon the effective date of such termination. Thereafter, the provisions of Sections 3.5, 3.6 and 3.7 shall apply as if BMS never exercised such Option.

(b) Termination by Alder Without Cause. In the case where Alder desires to discontinue further participation in the Cancer Development Program and BMS desires to continue Development of the Cancer Product, the Cancer Development Program shall terminate upon [***] prior written notice by Alder to BMS. Effective upon the effective date of such termination, BMS shall be solely responsible for the Development of the Cancer Product in the Cancer Territory at its sole expense, and the Cancer Territory [***] and the following additional milestone payments would be payable under Section 8.4: $[***] upon [***] for the Cancer Product and $[***] upon [***] for the Cancer Product.

(c) Mutual Termination. In the case where the Parties mutually agree through the JEC to discontinue the Cancer Development Program and discontinue further Development of the Cancer Product, the Parties will wind-down and cease such Development activities in accordance with a plan approved by the JEC.

14. REPRESENTATIONS AND WARRANTIES AND COVENANTS

14.1 Mutual Representations and Warranties. Each Party hereby represents, warrants, and covenants (as applicable) to the other Party as of the Signing Date as follows:

(a) It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including, without limitation, the right to grant the licenses granted by it hereunder.

(b) It has the full corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder. It has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms.

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(c) It is not a party to and will not during the Term enter into any agreement or to any outstanding order, judgment or decree of any court or administrative agency that would prevent it from granting the rights granted to the other Party under this Agreement or performing its obligations under this Agreement.

(d) In the course of the Development of Products, such Party has not used prior to the Signing Date and shall not use, during the Term, any employee, agent or independent contractor [***], or, to the best of such Party’s knowledge, [***].

14.2 Representations and Warranties by Alder. Alder hereby represents, warrants and, where denoted below, covenants to BMS as follows:

(a) As of the Signing Date, AlderHoldings has sufficient legal and/or beneficial title, ownership or license, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind, of the Alder Technology existing as of the Signing Date to grant the licenses to BMS as purported to be granted pursuant to this Agreement. As of the Signing Date, AlderHoldings is the sole owner of all right, title and interest in and to (free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind) the Core Patents listed on Exhibit B.

(b) As of the Signing Date, Alder has not received any written notice from any Third Party asserting or alleging that any research or development of Licensed Compounds or Products by Alder prior to the Signing Date infringed or misappropriated the intellectual property rights (including any trade secrets) of such Third Party. To Alder’s knowledge as of the Signing Date, the Alder Technology existing as of the Signing Date was not obtained in violation of any contractual or fiduciary obligation owed by Alder or its employees or agents to any Third Party.

(c) As of the Signing Date and to Alder’s knowledge, and except as disclosed by Alder in writing to BMS’ in-house patent counsel prior to the Signing Date, the research, development, manufacture, use and sale after the Signing Date of ALD518 can be carried out in the manner reasonably contemplated as of the Signing Date (as set forth in Exhibits C and D) without infringing any published patent applications (evaluating such patent applications as though they were issued with the claims as published as of the Signing Date) or patents owned or controlled by a Third Party. As of the Signing Date, and to Alder’s knowledge, and except as disclosed by Alder in writing to BMS’ in-house patent counsel prior to the Signing Date, the research, development, manufacture and use prior to the Signing Date of ALD518 by or on behalf of Alder has been carried out without infringing any published patent applications (evaluating such patent applications as though they were issued with the claims as published as of the Signing Date) or patents owned or controlled by a Third Party.

(d) As of the Signing Date, there are no pending, and to Alder’s knowledge no threatened, actions, suits or proceedings against Alder involving the Alder Technology, Licensed Compounds or Products.

(e) As of the Signing Date and to Alder’s knowledge, there are no activities by Third Parties that would constitute infringement or misappropriation of the Alder Technology existing as of the Signing Date (in the case of pending claims, evaluating them as if issued as of the Signing Date).

(f) As of the Signing Date, it has no knowledge from which it would have reason to conclude that the Alder Patents issued as of the Signing Date are invalid. To Alder’s knowledge, the claims included in any issued Alder Patents are valid and in full force and effect as of the Signing Date.

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(g) Except pursuant to an agreement entered into by Alder with any contract research organization or other vendor of Development services, or any contract manufacturing agreement, as of the Signing Date it has not granted (and Alder covenants that during the Term it shall not grant, except in accordance with the express terms and conditions of this Agreement) any license or any option for a license under the Alder Technology to any Third Party to make, use or sell any Licensed Compound or Products in any country in the Licensed Territory. As of the Signing Date it has not granted (and Alder covenants that during the Term it shall not grant) to any Third Party any right or option to enforce or obtain any patent term extension for any of the Core Patents listed on Exhibit B; provided however, that AlderHoldings may grant such a right or option to any Third Party pursuant to a License entered into in accordance with Sections 7.10 and 7.11.

(h) Alder has disclosed in writing to BMS’ in-house legal counsel (i) all Alder Patents existing as of the Signing Date that would be infringed by the manufacture using the Existing Process, use or sale of ALD518 (or products containing ALD518 in the form existing as of the Signing Date) by BMS, but for the licenses granted in this Agreement, and (ii) the jurisdiction(s) by or in which each such Alder Patent has been issued or in which an application for such Alder Patent has been filed, together with the respective Patent or application numbers. As of the Signing Date, all fees required to be paid prior to the Signing Date to maintain such issued Alder Patent rights have been paid.

(i) Except for any Alder Patents licensed to Alder by a Third Party, to the knowledge of Alder as of the Signing Date, no person, other than former or current employees of Alder who are obligated in writing to assign his/her inventions to AlderHoldings (either directly or through AlderBio), is an inventor of any of the inventions claimed in the Alder Patents filed or issued as of the Signing Date, except for those Third Party inventors of those inventions that fall within the Alder Technology Controlled by AlderHoldings and as to which AlderHoldings has obtained an assignment (either directly or through AlderBio) as of the Signing Date. To the knowledge of Alder as of the Signing Date, all inventors of any inventions included within the Alder Technology that is existing as of the Signing Date and is not licensed to AlderHoldings (either directly or through AlderBio) by a Third Party have assigned or have a contractual obligation to assign their entire right, title and interest in and to such inventions and the corresponding Patent rights to AlderHoldings (either directly or through AlderBio).

(j) The development of ALD518 has been conducted prior to the Signing Date by Alder and its Affiliates and, to the knowledge of Alder, its independent contractors, in compliance in all material respects with all Applicable Law, including all public health, environmental, and safety provisions thereof.

(k) To Alder’s knowledge as of the Signing Date, all ALD518 used in Clinical Trials prior to the Signing Date was manufactured in compliance with cGMPs.

(l) As of the Signing Date, (i) to Alder’s knowledge, all Regulatory Materials filed by Alder with respect to ALD518 (including without limitation the INDs therefor) were, at the time of filing, true, complete and accurate in all material respects, (ii) no serious adverse event information has come to the attention of Alder that is materially different in terms of the incidence, severity or nature of such serious adverse events than that which was filed as safety updates to the IND for ALD518 and (iii) to the knowledge of Alder, all written data summaries prepared by Alder that were included in such Regulatory Materials and that are based on clinical studies conducted or sponsored by Alder accurately summarize in all material respects the corresponding raw data underlying such summaries.

(m) As of the Signing Date, Alder has disclosed to BMS all material information known to Alder with respect to the safety and efficacy of ALD518 from nonclinical and/or clinical studies.

(n) As of the Signing Date, Alder has not received any written notice which has, or reasonably should have, led it to believe that any of the INDs for ALD518 are not currently in good standing with the applicable Regulatory Authorities. Alder has made available to BMS complete and accurate copies of

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all INDs for ALD518 filed prior to the Signing Date. As of the Signing Date, Alder has filed with the applicable Regulatory Authorities all required notices, supplemental applications and annual or other reports or documents, including adverse experience reports, with respect to each IND which are material to the continued Development of ALD518.

(o) As of the Signing Date, Alder has not received any written notice that any United States governmental or regulatory agency (including the FDA) or other Regulatory Authority has commenced, or, to its knowledge, threatened in writing to initiate any action to withdraw an IND, or, to Alder’s knowledge, commenced or threatened in writing to initiate any action to enjoin production of ALD518 at any of its supplier’s facilities.

(p) Alder has made available to BMS copies of all material (a) reports of inspection observations, if any, relating to ALD518, received by Alder prior to the Signing Date, (b) establishment inspection reports relating to ALD518 received by Alder prior to the Signing Date, and (c) warning letters relating to ALD518 received by Alder prior to the Signing Date, if any, as well as any other documents, if any, received prior to the Signing Date by Alder or any of its Affiliates, or to its knowledge as of the Signing Date, its suppliers from the applicable Regulatory Authorities relating to ALD518 or arising out of the Development of same that assert past or ongoing material lack of compliance with any Applicable Laws or regulatory requirements (including those of the FDA) by Alder or its Affiliates, and to its knowledge as of the Signing Date, its suppliers relating to clinical Development of ALD518.

(q) To Alder’s knowledge as of the Signing Date, neither it, any of its Affiliates, or any of its or their respective officers, employees, or agents has made an untrue statement of material fact or fraudulent statement to FDA or any other Regulatory Authority prior to the Signing Date with respect to the Development of ALD518, failed to disclose a material fact required to be disclosed to the FDA or any other Regulatory Authority prior to the Signing Date with respect to the Development of ALD518, or committed an act, made a statement, or failed to make a statement prior to the Signing Date with respect to the Development of ALD518 that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto.

14.3 Representations and Warranties by BMS. BMS hereby represents and warrants to Alder that, to the knowledge of BMS, there do not exist any BMS Patents as of the Signing Date.

14.4 Disclaimer. Each Party understands that the Licensed Compounds and Products are the subject of ongoing clinical research and development and that the other Party cannot assure the safety or usefulness of the Licensed Compounds or Products will not change from what is currently known. In addition, Alder makes no warranties except as set forth in this Article 14 concerning the Alder Technology, and BMS makes no warranties except as set forth in this Article 14 concerning the BMS Technology.

14.5 No Other Representations or Warranties. EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 14, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, IS MADE OR GIVEN BY OR ON BEHALF OF A PARTY. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.

15. INDEMNIFICATION AND LIMITATION OF LIABILITY

15.1 Indemnification by Alder. Alder shall defend, indemnify, and hold BMS, its Affiliates, and their respective officers, directors, employees, and agents (the “BMS Indemnitees”) harmless from and against any and all damages or other amounts payable to a Third Party claimant, as well as any [***]

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[***] (collectively, “BMS Damages”), all to the extent resulting from any claims, suits, proceedings or causes of action brought by such Third Party (collectively, “BMS Claims”) against such BMS Indemnitee that arise from or are based on: (a) a breach of any of Alder’s representations, warranties, and obligations under this Agreement; (b) the willful misconduct or negligent acts of Alder, its Affiliates, or the officers, directors, employees, or agents of Alder or its Affiliates; (c) commercialization of Cancer Product by Alder or its licensees (or their respective Affiliates) in or with respect to the Alder Cancer Territory or the manufacture, storage, handling, use, sale, offer for sale, and importation of Cancer Product in connection therewith; (d) the research or Development of Cancer Product by Alder or its licensees (or their respective Affiliates) in or with respect to the Alder Cancer Territory before BMS exercises its Option or if BMS does not exercise its Option, or the manufacture, storage, handling, use, sale, offer for sale, and importation of Cancer Product in connection therewith; and/or (e) the practice under or use of the licenses granted by BMS to Alder under Section 13.5(a) by or for Alder its Affiliates, or the officers, directors, employees, or agents of Alder or its Affiliates or their successors. The foregoing indemnity obligation shall not apply if the BMS Indemnitees materially fail to comply with the indemnification procedures set forth in Section 15.3, or to the extent that such BMS Claim is subject to indemnity pursuant to Section 15.2 and/or is based on or alleges: (i) a breach of any of BMS’ representations, warranties, and obligations under this Agreement, (ii) the willful misconduct or negligent acts of BMS or its Affiliates, or the officers, directors, employees, or agents of BMS or its Affiliates or (iii) a breach by BMS or its Affiliates of an obligation under an agreement between BMS or its Affiliates and a Third Party.

15.2 Indemnification by BMS. BMS shall defend, indemnify, and hold Alder, its Affiliates, and each of their respective officers, directors, employees, and agents, (the “Alder Indemnitees”) harmless from and against any and all damages or other amounts payable to a Third Party claimant[***] (collectively, “Alder Damages”), all to the extent resulting from any claims, suits, proceedings or causes of action brought by such Third Party (collectively, “Alder Claims”) against such Alder Indemnitee that arise from or are based on: (a) the Development, manufacture (other than in accordance with applicable specifications, GMP and other Applicable Law), storage, handling, use, sale, offer for sale, and importation of Licensed Products by BMS or its Affiliates, or Sublicensees in or with respect to the Licensed Territory; (b) a breach of any of BMS’ representations, warranties, and obligations under the Agreement; (c) the commercialization of Co-Developed Product in the Cancer Territory or the manufacture, storage, handling, use, sale, offer for sale and importation of Co-Developed Product in connection therewith; (d) if BMS exercises the Option, the research or Development of Cancer Product by BMS or its sublicensees (or their respective Affiliates) outside the scope of the U.S. Co-Developed Product Development, or the manufacture, storage, handling, use, sale, offer for sale, and importation of Cancer Product in connection therewith; and/or (e) the willful misconduct or negligent acts of BMS or its Affiliates, or the officers, directors, employees, or agents of BMS or its Affiliates. The foregoing indemnity obligation shall not apply if the Alder Indemnitees materially fail to comply with the indemnification procedures set forth in Section 15.3, or to the extent that any Alder Claim is subject to indemnity pursuant to Section 15.1 and/or is based on or alleges: (i) a breach of any of Alder’s representations, warranties, and obligations under this Agreement, (ii) the willful misconduct or negligent acts of Alder, its Affiliates, or their officers, directors, employees, or agents or (iii) a breach by Alder or its Affiliates of an obligation under an agreement between Alder or its Affiliates and a Third Party.

15.3 Indemnification Procedures. The Party claiming indemnity under this Article 15 (the “Indemnified Party”) shall give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of the claim, suit, proceeding or cause of action for which indemnity is being sought (“Claim”). The Indemnified Party shall provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense of the Claim for which indemnity is being sought. The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided however, the Indemnifying Party shall have the right to assume and conduct the defense of the Claim with counsel of its choice. The Indemnifying Party shall not settle any Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld, unless the settlement involves only the payment of money. So long as the Indemnifying Party is

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actively defending the Claim in good faith, the Indemnified Party shall not settle any such Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (a) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnifying Party will remain responsible to indemnify the Indemnified Party as provided in this Article 15.

15.4 Limitation of Liability. EXCEPT FOR AMOUNTS PAYABLE TO THIRD PARTIES BY A PARTY FOR WHICH IT SEEKS REIMBURSEMENT OR INDEMNIFICATION PROTECTION FROM THE OTHER PARTY PURSUANT TO SECTIONS 15.1 AND 15.2, AND EXCEPT FOR BREACH OF ARTICLE 12 HEREOF, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS OR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THE AGREEMENT, UNLESS SUCH DAMAGES ARE DUE TO THE FRAUD OF THE LIABLE PARTY (INCLUDING FRAUD WITH RESPECT TO A PARTY’S REPRESENTATIONS AND WARRANTIES IN ARTICLE 14).

15.5 Collaboration Disclaimer. EXCEPT AS PROVIDED IN ARTICLE 14, BMS EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES WITH RESPECT TO ANY COMPOUNDS OR INFORMATION (AND ANY PATENT RIGHTS OBTAINED THEREON) IDENTIFIED, MADE OR GENERATED BY BMS AS PART OF THE COLLABORATION OR OTHERWISE MADE AVAILABLE TO ALDER PURSUANT TO THE TERMS OF THE AGREEMENT. EXCEPT AS PROVIDED IN ARTICLE 14, ALDER EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES WITH RESPECT TO ANY COMPOUNDS OR INFORMATION (AND ANY PATENT RIGHTS OBTAINED THEREON) IDENTIFIED, MADE OR GENERATED BY ALDER AS PART OF THE COLLABORATION OR OTHERWISE MADE AVAILABLE TO BMS PURSUANT TO THE TERMS OF THE AGREEMENT.

15.6 Liability in Connection with Development of Cancer Product. If BMS exercises its Option, any Alder Damages and/or BMS Damages to the extent resulting from any claims, suits, proceedings or causes of action brought by a Third Party arising from the research or Development of the Co-Developed Product as part of the U.S. Co-Developed Product Development, or the manufacture, storage, handling, use, sale, offer for sale, and importation of Cancer Product in connection therewith, shall be deemed Cancer Development Costs and shared between Alder and BMS at a ratio of [***] to Alder and [***] to BMS as set forth in Section 3.7(a).

15.7 Insurance. Each Party shall procure and maintain a program of self-insurance and insurance, including product liability insurance, with respect to its activities hereunder and which are consistent with normal business practices of prudent companies similarly situated to such Party at all times during which any Product is being clinically tested in human subjects or commercially distributed or sold. It is understood that such insurance shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under this Article 15. Each Party shall provide the other with written evidence of such insurance upon request. Each Party shall provide the other with written notice at least [***] prior to the cancellation, non-renewal or material change in such insurance or self-insurance which materially adversely affects the rights of the other Party hereunder.

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16. DISPUTE RESOLUTION

16.1 Dispute Resolution.Disputes; Resolution by Executive Officers. The Parties recognize that disputes as to certain matters may from time to time arise during the term of this Agreement that relate to decisions to be made by one or more of the Committees provided for herein or to the Party’s respective rights and/or obligations hereunder. It is the desire of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to arbitration or litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 16 if and when a dispute arises under this Agreement, subject to Section 16.6.

Accordingly, any disputes, controversies or differences, other than a matter within the final decision-making authority of a Party and which is expressly stated as not subject to resolution by the JEC (at a Committee level or otherwise), which may arise between the Parties out of or in relation to or in connection with this Agreement shall be promptly presented to the Alliance Managers and the JEC for resolution. If the Alliance Managers and JEC are unable to resolve such dispute within [***] after a matter has been presented to it, then upon the request of either Party by written notice, the Parties agree to meet and discuss in good faith a possible resolution thereof , which good faith efforts shall include at least one in-person meeting between the Executive Officers of each Party within[***] after receipt by the other Party of such written notice. If the matter is not resolved within [***] following presentation to the Executive Officers, then:

(a) if a Party has final decision-making authority with respect to such matter, as expressly stated in this Agreement following attempted resolution by the JEC and Executive Officers, then such Party shall make such final decision;

(b) if such dispute, controversy or difference involves an Arbitrable Matter, either Party may invoke the provisions of Section 16.2;

(c) if such dispute, controversy or difference involves a Litigable Matter, either Party may pursue such remedies as it may deem necessary or appropriate;

(d) if such dispute, controversy or difference relates to the Development of the Cancer Product under the then-current Joint Cancer Development Plan after BMS has exercised the Option, then, except where expressly provided to the contrary in this Agreement, neither Party shall have final decision-making authority, and to the extent applicable and reflected in the then-current Joint Cancer Development Plan and Cancer Development Budget, the status quo as reflected in the then-current Joint Cancer Development Plan and Cancer Development Budget shall be maintained, it being understood that nothing in this Section 16.1(d) shall limit in any way the right of either Party to conduct a Proposed Study which is not a Rejected Study;

(e) if such dispute, controversy or difference relates to the selection of the Cancer Product Mark under Section 10.2(b), then neither Party shall have final decision-making authority and such proposed Cancer Product Mark shall not be used;

(f) if such dispute, controversy or difference relates to a decision as to whether to initiate a Clinical Trial or a non-clinical study [***] proposed to be conducted by Alder for a Cancer Product containing ALD518 (including any Proposed Study proposed by Alder for a Co-Developed Product containing ALD518), and BMS reasonably believes that the results of such proposed Clinical Trial or non-clinical study are likely to have a material adverse impact on the target product profile for the Licensed Product with respect to any immunological indication (including but not limited to the RA Indication) (an “Adverse Impact”), and BMS has provided to Alder in writing, within the applicable timeframe specified in Section 3.5(e) after Alder has provided to BMS the information specified in Section 3.5(e) with respect to the proposed Clinical Trial or non-clinical study for Cancer Product for the Alder

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Cancer Territory or within [***] after Alder has provided to BMS in accordance with Section 3.6 the Study Information with respect to the proposed Clinical Trial or non-clinical study for a Co-Developed Product, whichever is applicable, an explanation and basis for such belief; then BMS shall have final decision-making authority with respect to whether or not Alder shall have the right to conduct such proposed Clinical Trial or non-clinical study, provided that where Alder disagrees with any such decision by BMS in its final decision-making, Alder shall have the right to submit such dispute, controversy or difference to arbitration in accordance with Section 16.3 and Alder may proceed with such proposed Clinical Trial or non-clinical study if the arbitrator determines that such proposed Clinical Trial or non-clinical study would not be likely to have an Adverse Impact; and

(g) if such dispute, controversy or difference relates to whether the results of a non-clinical study or Clinical Trial proposed by BMS with respect to the Licensed Product containing ALD518 is likely to have a “material adverse impact” under Section 3.2(f), then BMS shall have the final say with respect to such matter and proceed with its proposed Clinical Trial or non-clinical study; provided however, that Alder shall have the right, at its own cost, to consult with one or more Third Party experts in oncology and/or immunology with respect to such matter and, if such issue is presented to the JEC and Alliance Managers, to bring into such Third Party experts into such deliberations, including presenting their opinions with respect to such matter to the JEC and Alliance Managers, and BMS’ Alliance Managers, JEC representatives and Executive Officer shall give due consideration to such Third Party opinion.

16.2 Arbitration. Any Arbitrable Matter that is not resolved pursuant to Section 16.1, except for a dispute, claim or controversy under Section 16.11 or one to which arbitration under Section 16.3 applies, [***] arbitration to be conducted as set forth below in this Section 16.2.

(a) Either Party, following the end of the [***] period referenced in Section 16.1, may refer such issue to arbitration by submitting a written notice of such request to the other Party. Promptly following receipt of such notice, the Parties shall meet and discuss in good faith and agree on an arbitrator to resolve the issue, which arbitrator shall be neutral and independent of both Parties and all of their respective Affiliates, shall have significant experience and expertise in licensing and partnering agreements in the pharmaceutical and biotechnology industries, shall have appropriate experience with respect to the matter(s) to be arbitrated, and shall have some experience in mediating or arbitrating issues relating to such agreements. In the case of any dispute involving an alleged failure to use Diligent Efforts or under Section 16.1(e) or (f), the arbitrator shall in addition be an individual with experience and expertise in the worldwide development and commercialization of pharmaceuticals and the business, legal and scientific considerations related thereto. In the case of a dispute involving a scientific or accounting matter or determination, an Expert having applicable expertise and experience will be selected by the Parties to assist the arbitrator in such scientific or accounting matter or determination (and the arbitrator will select such Expert if the Parties cannot agree on such Expert within [***] following the selection of the arbitrator). If the Parties cannot agree on such arbitrator(s) within [***] of request by a Party for arbitration, then such arbitrator(s) shall be appointed by [***], which arbitrator(s) must meet the foregoing criteria. The governing law in Section 16.4 shall govern such proceedings. No individual will be appointed to arbitrate a dispute pursuant to this Agreement unless he or she agrees in writing to be bound by the provisions of this Section 16.2. The place of arbitration will be [***], unless otherwise agreed to by the Parties.

(b) Within [***] after an arbitrator is selected (or appointed, as the case may be), each Party will deliver to both the arbitrator and the other Party a detailed written proposal setting forth its proposed terms for the resolution for the matter at issue (the “Proposed Terms” of the Party) and a memorandum (the “Support Memorandum”) in support thereof. The Parties will also provide the arbitrator a copy of this Agreement, as may be amended at such time. Within [***] after receipt of the other Party’s Proposed Terms and Support Memorandum, each Party may submit to the arbitrator (with a copy to the other Party) a response to the other Party’s Support Memorandum. Neither Party may have any other communications (either written or oral) with the arbitrator other than for the sole purpose of engaging the arbitrator or as expressly permitted in this Section 16.2.

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(c) The arbitrator shall set a date for a hearing, which shall be no later than [***] after the submission of the responses pursuant to Section 16.2(b), for the presentation of evidence and legal argument concerning each of the issues identified by the Parties. The Parties shall have the right to be represented by counsel. Except as provided herein, the arbitration shall be governed by the Commercial Arbitration Rules of the AAA applicable at the time of the notice of arbitration pursuant to Section 16.2(a), including the right of each party to undertake document requests and up to five (5) depositions.

(d) The arbitrator shall use his or her best efforts to rule on each disputed issue within [***] after completion of the hearing described in Section 16.2(c). The determination of the arbitrator as to the resolution of any dispute [***]. All rulings of the arbitrator shall be in writing and shall be delivered to the Parties as soon as is reasonably possible. Nothing contained herein shall be construed to permit the arbitrator to award punitive, exemplary or any similar damages. The arbitrator shall render a “reasoned decision” within the meaning of the Commercial Arbitration Rules which shall include findings of fact and conclusions of law. Any arbitration award may be entered in and enforced by a court in accordance with Section 16.4 and Section 16.10.

16.3 Expedited Arbitration. The following arbitration shall apply to any unresolved dispute described in Section 16.1(f):

(a) Either Party, at the appropriate time set forth in Section 16.1(f), may refer such issue to arbitration by a panel of three (3) arbitrators under this Section 16.3 by submitting a written notice of such request to the other Party. Within [***] after receipt of such notice, each Party shall appoint as an arbitrator an immunologist who is neutral to and independent of both Parties and all of their respective Affiliates and has experience and expertise in the worldwide development and commercialization of pharmaceuticals and, to the extent practicable, the business, legal and scientific considerations related thereto. Such arbitrators shall, within [***] of their appointment, appoint as the third arbitrator an oncologist who is neutral to and independent of both Parties and all of their respective Affiliates and has experience and expertise in the worldwide development and commercialization of pharmaceuticals and to the extent practicable, the business, legal and scientific considerations related thereto. If such two arbitrators cannot agree on such third arbitrator within such [***] period, then the Parties shall have a period of [***] in which to agree upon such third arbitrator and if they are unable to do so, such third arbitrator shall be appointed by [***], which arbitrator(s) must meet the foregoing criteria. The governing law in Section 16.4 shall govern such proceedings. No individual will be appointed to arbitrate a dispute pursuant to this Section 16.3 unless he or she agrees in writing to be bound by the provisions of this Section 16.3. The place of arbitration will be [***], unless otherwise agreed to by the Parties.

(b) Within [***] after the third arbitrator is selected (or appointed, as the case may be), each Party will deliver to both the arbitrator and the other Party a detailed written proposal setting forth its rationale for its belief that the results of the proposed Clinical Trial or non-clinical study is likely, or not likely, as the case may be to have either a “material adverse impact” as set forth in Section 3.6(b) or an Adverse Impact, and a memorandum (the “Support Memorandum”) in support thereof. The Parties will also provide the arbitrators a copy of this Agreement, as may be amended at such time, and a copy of any other relevant document it deems appropriate, including the then-current Cancer Development Plan, Licensed Field Development Plan, and target product profiles for each of the Cancer Product and Licensed Product containing ALD518. Within [***] after receipt of the other Party’s Support Memorandum, each Party may submit to the arbitrators (with a copy to the other Party) a response to the other Party’s Support Memorandum. Neither Party may have any other communications (either written or oral) with any arbitrator other than for the sole purpose of engaging the arbitrator or as expressly permitted in this Section 16.3. or in response to any request from the arbitrators.

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(c) The arbitrators shall use their best efforts to rule on each disputed issue within [***] after receipt of the Parties’ responses to the Support Memoranda as described in Section 16.3(b). A decision of two out of the three arbitrators shall constitute a final decision of the arbitration panel, and such a decision [***]. All rulings of the arbitration panel under this Section 16.3 shall be in writing and shall be delivered to the Parties as soon as is reasonably possible. Nothing contained herein shall be construed to permit the arbitrators to award any damages. The arbitrator shall render a “reasoned decision” within the meaning of the Commercial Arbitration Rules which shall include findings of fact and conclusions of law.

16.4 Governing Law. This Agreement shall be governed by and construed and enforced under the substantive laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise make this Agreement subject to the substantive law of another jurisdiction. For clarification, any dispute relating to the inventorship, scope, validity, enforceability or infringement of any patent right shall be governed by and construed and enforced in accordance with the patent laws of the applicable jurisdiction.

16.5 Award. Any award to be paid by one Party to the other Party as determined by the arbitrator as set forth above under Section 16.2 shall be promptly paid in U.S. dollars free of any tax, deduction or offset; and any costs, fees or taxes incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the Party resisting enforcement. Each Party [***], and agrees that, [***]. With respect to money damages, nothing contained herein shall be construed to permit the arbitrator or any court or any other forum to award punitive or exemplary damages. By entering into this agreement to arbitrate, the Parties expressly waive any claim for punitive or exemplary damages. The only damages recoverable under this Agreement are compensatory damages.

16.6 Costs. Each Party shall bear its own legal fees in connection with any arbitration procedure. The arbitrator may in his/her/their discretion assess his or her costs, fees and expenses (and those any Expert hired by the arbitrator) against the Party losing the arbitration.

16.7 Injunctive Relief; Remedy for Breach of Exclusivity. Nothing in this Article 16 will preclude either Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a dispute either prior to or during any arbitration if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding. For the avoidance of doubt, nothing in this Section 16.7 shall otherwise limit a breaching Party’s opportunity to cure a material breach as permitted in accordance with Section 13.3.

16.8 Confidentiality. The arbitration proceeding shall be confidential and the arbitrator shall issue appropriate protective orders to safeguard each Party’s Confidential Information. Except as required by law, no Party shall make (or instruct the arbitrator to make) any public announcement with respect to the proceedings or decision of the arbitrator without prior written consent of the other Party. The existence of any dispute submitted to arbitration, and the award, shall be kept in confidence by the Parties and the arbitrator, except as required in connection with the enforcement of such award or as otherwise required by applicable law.

16.9 Survivability. Any duty to arbitrate under this Agreement shall remain in effect and be enforceable after termination of this Agreement for any reason.

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16.10 Jurisdiction. For the purposes of this Article 16, the Parties acknowledge their diversity and agree to accept the jurisdiction of the United States District Court located in Wilmington, Delaware for the purposes of enforcing or appealing any awards entered pursuant to this Article 16 and for enforcing the agreements reflected in this Article 16 and agree not to commence any action, suit or proceeding related thereto except in such courts.

16.11 Patent and Trademark Disputes. Notwithstanding Section 16.2, any dispute, controversy or claim relating to the inventorship, scope, validity, enforceability or infringement of any Collaboration Patents or Marks covering the manufacture, use, importation, offer for sale or sale of Products shall be submitted to a court of competent jurisdiction in the country in which such patent or trademark rights were granted or arose.

17. MISCELLANEOUS

17.1 Entire Agreement; Amendments. This Agreement, including the Exhibits hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior agreements and understandings between the Parties with respect to the subject matter hereof, including, without limitation, the Prior CDA. In the event of any inconsistency between any plan hereunder (including any development plan or commercialization plan) and this Agreement, the terms of this Agreement shall prevail. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized representative of each Party.

17.2 Export Control. This Agreement is made subject to any restrictions concerning the export of products or technical information from the U.S. or other countries which may be imposed upon or related to Alder or BMS from time to time. Each Party agrees that it shall not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity.

17.3 Rights in Bankruptcy.

(a) All rights and licenses granted under or pursuant to this Agreement by one party to the other are, for all purposes of Section 365(n) of Title 11 of the United States Code (“Title 11”), licenses of rights to “intellectual property” as defined in Title 11, and, in the event that a case under Title 11 is commenced by or against either Party (the “Bankrupt Party”), the other Party shall have all of the rights set forth in Section 365(n) of Title 11 to the maximum extent permitted thereby. During the Term, each Party shall create and maintain current copies to the extent practicable of all such intellectual property. Without limiting the parties rights under Section 365(n) of Title 11, if a case under Title 11 is commenced by or against the Bankrupt Party, the other Party shall be entitled to a copy of any and all such intellectual property and all embodiments of such intellectual property, and the same, if not in the possession of such other Party, shall be promptly delivered to it (i) before this Agreement is rejected by or on behalf of the Bankrupt Party, within thirty (30) days after the other Party’s written request, unless the Bankrupt Party, or its trustee or receiver, elects within thirty (30) days to continue to perform all of its obligations under this Agreement, or (ii) after any rejection of this Agreement by or on behalf of the Bankrupt Party, if not previously delivered as provided under clause (i) above. All rights of the Parties under this Section 17.3 and under Section 365(n) of Title 11 are in addition to and not in substitution of any and all other rights, powers, and remedies that each party may have under this Agreement, Title 11, and any other Applicable Law. The non-Bankrupt Party

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shall have the right to perform the obligations of the Bankrupt Party hereunder with respect to such intellectual property, but neither such provision nor such performance by the non-Bankrupt Party shall release the Bankrupt Party from any such obligation or liability for failing to perform it.

(b) The Parties agree that they intend the foregoing non-Bankrupt Party rights to extend to the maximum extent permitted by law and any provisions of applicable contracts with Third Parties, including for purposes of Title 11, (i) the right of access to any intellectual property (including all embodiments thereof) of the Bankrupt Party or any Third Party with whom the Bankrupt Party contracts to perform an obligation of the Bankrupt Party under this Agreement, and, in the case of the Third Party, which is necessary for the Development, Regulatory Approval and manufacture of Products and (ii) the right to contract directly with any Third Party described in (i) in this sentence to complete the contracted work.

(c) Any intellectual property provided pursuant to the provisions of this Section 17.3 shall be subject to the licenses set forth elsewhere in this Agreement and the payment obligations of this Agreement, which shall be deemed to be royalties for purposes of Title 11.

(d) In the event that Alder enters into a license agreement with a Third Party with respect to intellectual property that will be sublicensed to BMS hereunder, Alder will use commercially reasonable efforts to enable BMS to concurrently enter arrangements with Alder and any such Third Party whereby BMS will receive a direct license from any such Third Party in the event that such license agreement between Alder and such Third Party is terminated during the Term solely on account of Alder becoming a Bankrupt Party.

(e) Notwithstanding anything to the contrary in Article 9, in the event that Alder is the Bankrupt Party, BMS may take appropriate actions in connection with the filing, prosecution, maintenance and enforcement of any Alder Patent rights licensed or assigned to BMS under this Agreement without being required to consult with Alder before taking any such actions, provided that such actions are consistent with this Agreement.

17.4 Force Majeure. Each Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure (defined below) and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, “force majeure” shall include conditions beyond the control of the Parties, including an act of God, acts of terrorism, voluntary or involuntary compliance with any regulation, law or order of any government, war, civil commotion, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe. The payment of invoices due and owing hereunder shall in no event be delayed by the payer because of a force majeure affecting the payer.

17.5 Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 17.5, and shall be deemed to have been given for all purposes (a) when received, if hand-delivered or sent by a reputable international expedited delivery service, or (b) five (5) business days after mailing, if mailed by first class certified or registered mail, postage prepaid, return receipt requested.

For AlderBio: Alder Biopharmaceuticals Inc. 11804 North Creek Parkway South Bothell, WA 98011 Attention: President and CEO Fax: 425-205-2901

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With a copy to:	Cooley Godward Kronish LLP Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306 Attention: Barbara A. Kosacz, Esq. Fax: 650-849-7400
For AlderHoldings:	AlderBio Holdings LLC 101 Convention Center Drive Suite 850 Las Vegas, Nevada 89109 Fax: 702-598-3651
With a copy to:	Cooley Godward Kronish LLP Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306 Attention: Barbara A. Kosacz, Esq. Fax: 650-849-7400
For BMS:	Bristol-Myers Squibb Company Route 206 and Province Line Road Princeton, NJ 08543-4000 Attention: Senior Vice President, Strategic Transactions Group Fax: 609-252-7212
With a copy to:	Bristol-Myers Squibb Company Route 206 and Province Line Road Princeton, NJ 08543-4000 Attention: Vice President and Senior Counsel, Corporate and Business Development Fax: 609-252-4232

Furthermore, a copy of any notices required or given under Section 9.4 of this Agreement shall also be addressed to the Vice President and Chief Intellectual Property Counsel of BMS at the address set forth in Section 9.4.

17.6 Independent Contractors. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way. Nothing herein shall be construed to create the relationship of partners, principal and agent, or joint-venture partners between the Parties.

17.7 Maintenance of Records. Each Party shall keep and maintain all records required by law or regulation with respect to Products and shall make copies of such records available to the other Party in accordance with the terms and conditions of this Agreement.

17.8 Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other, except that a Party may make such an assignment without the other Party’s consent (i) to any Affiliate of such Party, provided that such transfer shall not

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adversely affect the other Party’s rights and obligations under this Agreement and that such Affiliate remains an Affiliate of such Party or (ii) to any Third Party successor or purchaser of all or substantially all of the business or assets of such Party, whether in a merger, sale of stock, sale of assets or other transaction. Any permitted successor or assignee of rights and/or obligations hereunder shall, in a writing to the other Party, expressly assume performance of such rights and/or obligations (and in any event, any Party assigning this Agreement to an Affiliate shall remain bound by the terms and conditions hereof). In the event of any permitted assignment of this Agreement by BMS, BMS shall assign to such permitted assignee or to AlderHoldings (in accordance with Section 13.9 as if a termination had occurred) BMS’ entire right, title and interest in and to each Ex-US Core Patent to which BMS obtained an ownership interest pursuant to Section 7.2. In the event that a Party is acquired by a Third Party (such Third Party, hereinafter referred to as an “Acquiror”), then the intellectual property of such Acquiror held or developed by such Acquiror prior to or after such acquisition (other than intellectual property developed by such Acquiror in the course of conducting the acquired Party’s activities under this Agreement) shall be excluded from the Alder Technology and BMS Technology, and such Acquiror (and Affiliates of such Acquiror which are not controlled by (as defined under the Affiliate definition in Article 1) the acquired Party itself) shall be excluded from the Affiliate definition solely for purposes of the applicable components of the Alder Technology or the BMS Technology. For clarity, any intellectual property developed by the Acquiror in the course of conducting the acquired Party’s activities under this Agreement shall be included within Alder Technology and BMS Technology to the extent such intellectual property would have been so included had it been developed by the acquired Party. Any permitted assignment shall be binding on the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 17.8 shall be null, void and of no legal effect.

17.9 [***].

17.10 Non-Solicitation of Employees. After the Effective Date and during the term of this Agreement, each Party agrees that neither it nor any of its divisions, operating groups or Affiliates shall recruit, solicit or induce any employee of the other Party directly involved in the activities conducted pursuant to this Agreement to terminate his or her employment with such other Party and become employed by or consult for such Party, whether or not such employee is a full-time employee of such other Party, and whether or not such employment is pursuant to a written agreement or is at-will. For purposes of the foregoing, “recruit”, “solicit” or “induce” shall not be deemed to mean: (a) circumstances where an employee of a Party initiates contact with the other Party or any of its Affiliates with regard to possible employment; or (b) general solicitations of employment not specifically targeted at employees of a Party or any of its Affiliates, including responses to general advertisements.

17.11 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

17.12 Compliance with Applicable Law. Each Party shall comply with Applicable Law in the course of performing its obligations or exercising its rights pursuant to this Agreement. Neither Party (nor any of their Affiliates) shall be required under this Agreement to take any action or to omit to take any action otherwise required to be taken or omitted by it under this Agreement if the taking or omitting of such action, as the case may be, would violate any settlement or judgment to which it may be subject from time to time during the Term, including in the case of BMS, the following: (i) [***] of the [***] entered into by BMS in [***] to [***]

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[***] that related to the Bristol-Myers Squibb investigational compound [***]; (ii) [***]; (iii) [***]; and (iv) [***]. Notwithstanding anything to the contrary in this Agreement, neither Party nor any of its Affiliates shall be required to take, or shall be penalized for not taking, any action that is not in compliance with such Party’s ethical business practices and policies or that such Party reasonably believes is not in compliance with Applicable Law.

17.13 Severability. If any one or more of the provisions of this Agreement are held to be invalid or unenforceable by an arbitrator or any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

17.14 No Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

17.15 HSR Filing. The Parties shall each as promptly as practicable after the Signing Date of this Agreement, file or cause to be filed with the U.S. Federal Trade Commission and the U.S. Department of Justice and any relevant foreign governmental authority any notifications required to be filed under the HSR Act and any applicable foreign equivalent thereof with respect to the transactions contemplated hereby; provided that the Parties shall each file the notifications required to be filed under the HSR Act no later than ten (10) business days after the Signing Date of this Agreement and shall each file the notifications required to be filed by any applicable foreign equivalent no later than fifteen (15) business days after the Signing Date of this Agreement. Each Party shall be responsible for its own costs in connection with such filing, except that BMS shall be solely responsible for the applicable filing fees. The Parties shall use commercially reasonable efforts to respond promptly to any requests for additional information made by either of such agencies, and to cause the waiting periods under the HSR Act and any applicable foreign equivalent thereof to terminate or expire at the earliest possible date after the date of filing. Each Party shall use its commercially reasonable efforts to ensure that its representations and warranties set forth in this Agreement remain true and correct at and as of the Effective Date as if such representations and warranties were made at and as of the Effective Date. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective (with the exception of Articles 1 and 17) until such time as (a) the Parties shall have complied with all applicable requirements of the HSR Act; (b) the waiting period under the HSR Act shall have expired or earlier been terminated; (c) no judicial or administrative proceeding opposing consummation of all or any part of this Agreement shall be pending; (d) no injunction (whether temporary, preliminary or permanent) prohibiting consummation of the transactions contemplated by this Agreement or any material portion hereof shall be in effect; and (e) no requirements or conditions shall have been formally requested or imposed by the Federal Trade Commission and the Department of Justice in connection therewith which are not reasonably and mutually satisfactory to the Parties (collectively, the “HSR Conditions”) and shall become effective automatically on the first date when all HSR Conditions are met. Such date shall be referred to as the “Effective Date”. For clarity, achieving the HSR Conditions shall be the sole condition precedent to this entire Agreement coming into effect. In the event that the HSR Conditions are not met within three (3) months of the Signing Date, either Party may terminate this Agreement.

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17.16 Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include”, “includes” or “including” shall be construed as incorporating also the phrase “but not limited to” or “without limitation”; (ii) the word “day” or “year” or “quarter” shall mean a calendar day or year or quarter, unless otherwise specified; (iii) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Exhibits); (v) provisions that require that a Party, the Parties or any Committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vi) words of any gender include the other gender; (vii) words using the singular or plural number also include the plural or singular number, respectively; (viii) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; and (ix) the word “will” shall be construed to have the same meaning and effect as the word “shall”.

17.17 Guarantee of Performance by AlderBio and AlderHoldings. The obligations, representations, warranties, covenants attributed to Alder under this Agreement and other references to Alder in this Agreement shall apply jointly and severally to Alder Holdings and AlderBio; provided however, as the owner of the Alder Technology, AlderHoldings has the sole right to receive all payments set forth in Article 8. AlderBio guarantees and shall be liable for the performance of AlderHoldings under this Agreement, and AlderHoldings guarantees and shall be liable for the performance of AlderBio under this Agreement.

17.18 Counterparts. This Agreement may be executed in counterparts with the same effect as if both Parties had signed the same document, each of which shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement may be executed and delivered through the email of pdf copies of the executed Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives effective as of the Signing Date.

BRISTOL-MYERS SQUIBB COMPANY		ALDER BIOPHARMACEUTICALS INC.
By:	/s/ Jeremy Levin	By:	/s/ Randall C. Schatzman
Name:	Jeremy M. Levin	Name:	Randall C. Schatzman
Title:	Senior Vice President	Title:	President & CEO
		ALDERBIO HOLDINGS LLC
		By:	/s/ Randall C. Schatzman
		Name:	Randall C. Schatzman
		Title:	Manager

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EXHIBITS

Exhibit A—Amino Acid Sequence of ALD518

Exhibit B—Core Patents

Exhibit C—Initial Cancer Development Plan

Exhibit D—Initial Licensed Field Development Plan

Exhibit E—BMS Right of Preferred Negotiation for Cancer Field in the U.S.

Exhibit F—Adverse Event Reporting Procedures Until An SDEA Can Be Signed

Exhibit G—Joint Press Release

Exhibit H—[***]

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Exhibit A

Amino Acid Sequence of ALD518

[***]

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Exhibit B

Core Patents

[***]

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Exhibit C

Initial Cancer Development Plan

Non-clinical studies in cancer:

[***] studies to investigate the effect of ALD518 on the sensitivity of cancer cell lines/transplants to cancer chemotherapeutic agents including but not limited to [***].

Clinical Trials:

These studies relate to [***] but Alder will do similar studies in a range of other cancers as yet to be determined. The Phase 3 Clinical Trials will have survival endpoints built into them, if appropriate.

A Phase 2 Clinical Trial to investigate[***] of ALD518 in the treatment of [***] in [***] patients.

A Phase 2 Clinical Trial to investigate [***] of ALD518 in the treatment of [***] in [***] patients.

A Phase 2 Clinical Trial to investigate the[***] of ALD518 in the treatment of [***] in [***] patients.

A Phase 3 Clinical Trial to investigate the [***] of ALD518 in the treatment of [***] in [***] patients.

A Phase 3 Clinical Trial to investigate the [***] of ALD518 in the treatment of [***] in [***] patients.

A Phase 3 Clinical Trial to investigate [***] of ALD518 in the treatment of [***] in [***] patients.

Alder may also be required to do studies in pediatric cancers.

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Exhibit D

Initial Licensed Field Development Plan

Below are listed the key activities planned to be carried out for the Development of the Licensed Product for the RA Indication.

Non-clinical activities in preparation of Phase 2b Clinical Trial in rheumatoid arthritis patients and in preparation of BLA filing:

• drug substance campaign for Phase 2b Clinical Trial supply ([***])

• release drug substance for Phase 2b Clinical Trial supply

• [***]

• [***]

• [***]

• [***]:

o [***]

o [***]

• [***]—needs to be conducted in support of filing

• [***]—needs to be conducted in support of filing

• drug-drug interaction studies—needs to be conducted in support of filing

• mechanism of action studies—needs to be conducted in support of filing

Clinical Studies:

Phase 2b Clinical Trial dose ranging study in rheumatoid arthritis patients with inadequate response to methotrexate (dose ranging MTX IR; [***]; SC). The study will be conducted using the subcutaneous formulation.

• [***] arm

• [***], 6 months in duration

• approximately 350 patients

• [***]

• [***]

Phase 3 Clinical Trial in rheumatoid arthritis patients with [***].

• [***]

• [***] arms, [***] in duration

• approximately [***] patients

• [***]

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Phase 3 Clinical Trial in rheumatoid arthritis patients with [***].

• [***]

• [***] arms, [***] in duration

• approximately [***] patients

Phase 3 Clinical Trial in rheumatoid arthritis patients who are [***].

• [***] arms, [***] in duration

• approximately [***] patients

• [***]

Phase 3 Clinical Trial safety study in rheumatoid arthritis patients with [***]

• [***] arms, [***] in duration

• approximately [***] patients

• [***]

The proposed development plan timeline for certain of the above activities is shown on the next page.

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[***]

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Exhibit E

BMS Right of Preferred Negotiation for Cancer Field in the U.S.

Right of Preferred Negotiation. If BMS exercises the Option and for so long as BMS has the licenses set forth in Section 7.9, BMS shall have a limited right of preferred negotiation with respect to the Cancer Product in the Cancer Field in the Alder Cancer Territory as set forth in this Exhibit E (the “Right of Preferred Negotiation”).

E1 In the event that Alder desires to pursue entering into a License, Alder will have the right to conduct any process whatsoever with respect thereto [***] subject to the provisions of this Exhibit E. In the event that Alder desires to pursue entering into a License, Alder will provide written notice to BMS of its desire and provide BMS with information in Alder’s possession and Control that is reasonably necessary for BMS to perform its due diligence with respect to the Cancer Product in the Cancer Field in the Alder Cancer Territory (including but not limited to information from or relating to clinical studies, investigator brochures, correspondence with FDA, information regarding Third Party patents, and information regarding the manufacture, sourcing and cost of goods for the Cancer Product) to the extent not previously made electronically available to BMS, and to the extent and consistent with the timing of the delivery of such information and diligence materials as is done with respect to Third Parties who have also indicated in interest in participating in such License negotiations (the “Notice”). Alder shall provide to BMS [***] at the time of such Notice. If BMS notifies Alder in writing of its election to pursue a License within [***] after BMS’ receipt of such Notice, Alder shall enter into good faith negotiations with BMS with respect to such License and Alder and BMS shall agree within [***] of BMS’ notice [***]. During such negotiation, Alder will provide BMS with an opportunity to make a written counter-proposal to the terms and conditions offered by Alder with respect to such a License and Alder will either accept the counter-proposal or provide a counter offer term sheet to BMS, and the Parties shall iterate as they see fit in this manner. [***].

E2 [***].

(a) In the event that Alder intends to enter into a License with a Third Party (based on bona fide arm’s-length negotiations with an unaffiliated Third Party) after following the procedure set forth in this Exhibit E, Alder shall provide BMS with written notice that Alder has followed the procedure set forth in this Exhibit E and that Alder has determined that it shall enter into such License. Alder shall then be free to enter into such Third Party License, provided that such agreement is under the terms and conditions that the Independent Evaluator determined to be More Favorable to Alder than those terms and conditions last offered in writing by Alder to BMS (i.e., in the Last Alder Term Sheet).

(b) [***].

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Alder shall provide BMS in each case at least [***]. Upon receipt, [***]. Alder will consider the determination [***]. Subject to paragraph (c) below, Alder shall then determine, in its sole discretion, [***]. Such determination shall be made in good faith, and shall be final and binding upon the Parties and shall not be subject to appeal or challenge or to any dispute resolution proceeding, except in the case where BMS has a reasonable basis to believe that Alder did not follow the procedure set forth in this Section E2 [***], and any such dispute shall be conclusively resolved [***].

(c) [***] then Alder will have the right to enter into a License with such Third Party having the terms and conditions [***]. In such event, Alder shall not be required to proceed with any such Third Party, or with BMS, but it may proceed in any way it prefers, including, without limitation (i) further negotiating with such Third Party based upon such Third Party Term Sheet [***], or (ii) offering to BMS such terms and conditions [***], and Alder shall be under no obligation to further negotiate with BMS [***].

(d) [***] Alder shall have all rights, but not the obligation [***].

E3 In the event that Alder has not entered into an agreement with a Third Party with respect to a License within the earlier of [***] following the date of the Notice [***], before entering into a License with any Third Party, Alder will first notify BMS of such fact, and will provide again a Notice (including all such information described in Section E1) and a proposal for terms and conditions of a License with BMS in the same manner as set forth above under Section E1 and subject to Section E2.

E4 Any License entered into by Alder with a Third Party in accordance with the procedure set forth in this Exhibit E shall be consistent with the terms and conditions of this Agreement and shall not limit Alder in its ability to fully perform all of its obligations under the Agreement, which will continue in effect.

E5 Certain Definitions. The following capitalized terms shall have the following meanings as set forth below.

[***].

“More Favorable” means, with respect to a Third Party proposal for a License (including the terms and conditions set forth in the Third Party Term Sheet), compared to a License agreement with BMS under the terms and conditions set forth in the Last Alder Term Sheet, that the Third Party proposal taken as a whole is more favorable to Alder than such License with BMS, [***].

[***], or after BMS affirmatively declines to pursue a License or fails to timely notify Alder of BMS’ election to pursue a License.

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Exhibit F

Adverse Event Reporting Procedures Until An SDEA Can Be Signed

Each Party shall notify the other Party as soon as practicable, but not later than [***] after it receives information about the initiation of any investigation, review or inquiry by any Regulatory Authority concerning the safety of a Product.

Individual Case Safety Reports (ICSRs) and pregnancy reports which come to the attention of either Party shall be notified to the other Party, in English, in accordance with the time frames, formats, and method listed below. No source documents shall be exchanged. Each report shall be transmitted to the appropriate contact as set forth below.

Report Type	Timeframe	Format	Method
Unexplained and fatal or life-threatening adverse event associated with use of Product as set forth in ICH guidelines	[***]	[***]	FAX and e-mail
All other serious attributable* (related) ICSRs and pregnancies	[***]	[***]	FAX and e-mail
Serious non-attributable (not related) ICSRs	[***]	[***]	FAX and e-mail
Non-serious attributable* (related) and non-attributable (not related) ICSRs	[***]

Attributable (i.e., [***]) by either the investigator or a Party.

Each Party is responsible for complying with all applicable investigational and post-marketing safety reporting regulations with respect to the use of the Product as subject to the terms of this Agreement. This includes submission of expedited and periodic reports to the appropriate Regulatory Authority(s).

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All information to be reported to a Party under this Exhibit shall be sent as follows (or to such other address, contact person, telephone number, facsimile number or e-mail address as may be specified in writing to the other Party):

To BMS, at:

Bristol-Myers Squibb Company

Adverse Event Processing

311 Pennington-Rocky Hill Road HW 19 1.01

Pennington, NJ 08534

USA

Fax: 609-818-3804

Email: worldwide.safety@bms.com

To Alder, at:

Alder Biopharmaceuticals Inc.

11804 North Creek Parkway South

Bothell, WA 98011

Attention: Chief Medical Officer

Fax: 425-205-2941

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Exhibit G

Joint Press Release

Bristol-Myers Squibb and Alder Biopharmaceuticals

Enter Global Agreement on Rheumatoid Arthritis Biologic

ALD518 is a Phase II Humanized Monoclonal Antibody Targeting IL-6

(PRINCETON, New Jersey, and BOTHELL, Washington, October XX, 2009)—Bristol-Myers Squibb Company (NYSE:BMY) and Alder Biopharmaceuticals, Inc., today announced a global agreement for the development and commercialization of ALD518, a novel biologic that has completed Phase IIa development for the treatment of rheumatoid arthritis.

Under the terms of the collaboration agreement, Alder will grant to Bristol-Myers Squibb worldwide exclusive rights to develop and commercialize ALD518 for all potential indications except cancer, for which Alder will retain rights and grant Bristol-Myers Squibb an option to co-develop and commercialize outside the United States. An upfront cash payment of $85 million, potential development-based and regulatory-based milestone payments of up to $764 million across a range of indications, potential sales-based milestones which under certain circumstances may exceed $200 million, and royalties on net sales are payable to Alder by Bristol-Myers Squibb. Alder has an option to require Bristol-Myers Squibb to make an equity investment of up to $20 million in Alder during an initial public offering.

“With its novel mechanism of action, ALD518 has the potential to offer an exciting new option for patients with rheumatoid arthritis,” said Brian Daniels, M.D., Senior Vice President, Global Development & Medical Affairs, Bristol-Myers Squibb. “We are pleased to have the opportunity to develop this novel monoclonal antibody. As part of our String of Pearls strategy, this transaction provides Bristol-Myers Squibb with the opportunity to strengthen our immunoscience pipeline, and leverage our company’s experience in developing and delivering novel biologics to help patients prevail over rheumatoid arthritis and, potentially, other autoimmune diseases.”

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“Bristol-Myers Squibb and Alder share the vision that ALD518 could become an important part of treating patients with rheumatoid arthritis,” said Randall C. Schatzman, Ph.D., President and Chief Executive Officer of Alder Biopharmaceuticals. “Bristol-Myers Squibb’s extensive development and commercial experience in immunology translate into an exceptionally good fit for Alder, especially at this stage of our corporate development.”

The effectiveness of the collaboration agreement is subject to antitrust clearance by the United States Federal Trade Commission and Department of Justice, under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary regulatory approvals.

About ALD518

ALD518 is a humanized, monoclonal antibody, designed to block a pro-inflammatory molecule called interleukin-6 (IL-6), which plays a key role in the inflammatory cascade leading to the inflammation, swelling, pain, and destruction of large and small joints associated with rheumatoid arthritis. Based on the strong association of IL-6 with inflammatory disease, inhibition of IL-6 with ALD518 represents a promising new anti-inflammatory mechanism that could result in bone and joint preservation. ALD518 has completed Phase IIa development for rheumatoid arthritis. ALD518 is also being studied by Alder for the treatment of cancer and in cancer supportive care.

ABOUT RHEUMATOID ARTHRITIS

Rheumatoid arthritis (RA) is a systemic,¹ chronic, autoimmune disease characterized by inflammation in the lining of joints (or synovium), causing joint damage with chronic pain, stiffness, swelling and fatigue.² RA causes limited range of motion and decreased function as a result of affected joints losing their shape and alignment^.3

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RA affects about one percent of the world’s population,⁴ including more than one million people in the United States.¹ The condition is more common in women than in men, who account for 75 percent of patients diagnosed with RA.²

About Bristol-Myers Squibb

Bristol-Myers Squibb is a global biopharmaceutical company committed to discovering, developing and delivering innovative medicines that help patients prevail over serious diseases. For more information, please visit www.bms.com.

ABOUT ALDER

ALDER BIOPHARMACEUTICALS, INC. UNIQUELY IDENTIFIES, DEVELOPS, AND MANUFACTURES NOVEL ANTIBODY THERAPEUTICS TO ALLEVIATE HUMAN SUFFERING IN THE AUTOIMMUNE AND INFLAMMATORY DISEASE AREAS. ALDER’S MANAGEMENT TEAM COMBINES DECADES OF INDUSTRY EXPERIENCE WITH A PROVEN TRACK RECORD FOR IDENTIFYING AND DEVELOPING NOVEL ANTIBODY THERAPEUTICS AND ENABLING PARTNERS THROUGH THE OUT-LICENSING OF ITS TECHNOLOGIES. IN ADDITION TO BRISTOL-MYERS SQUIBB, PARTNERS INCLUDE SCHERING-PLOUGH, SEATTLE GENETICS, GENMAB, AND TWO NON-DISCLOSED LARGE PHARMACEUTICAL COMPANIES. FOR MORE INFORMATION, VISIT WWW.ALDERBIO.COM.

Bristol-Myers Squibb Forward-Looking Statements

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995, regarding the research, development and commercialization of pharmaceutical products. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among other risks, there can be no guarantee that the compound described in this release will move from early stage development into full product development, that clinical trials of this compound will

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support a regulatory filing, or that the compound will receive regulatory approval or become a commercially successful product. Nor is there any guarantee that the transaction described in this release will receive the necessary regulatory approvals to close. Forward-looking statements in the press release should be evaluated together with the many uncertainties that affect Bristol-Myers Squibb’s business, particularly those identified in the cautionary factors discussion in Bristol-Myers Squibb’s Annual Report on Form 10-K for the year ended December 31, 2008, its Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Bristol-Myers Squibb undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

References

¹  Helmick CG, Felson DT, Lawrence RC, Gabriel S, Hirsch R, Kwoh CK, Liang MH, Kremers HM, Mayes MD, Merkel PA, Pillemer SR, Reveille JD, Stone JH; National Arthritis Data Workgroup. Estimates of the prevalence of arthritis and other rheumatic conditions in the United States. Part I. Arthritis Rheum. 2008;Jan;58(1):15-25.

²  American College of Rheumatology, Patient Education, Rheumatoid Arthritis. Available at: http://www.rheumatology.org/public/factsheets/ra_new.asp?aud=pat2. Accessed May 2006.

³  National Institute of Arthritis and Musculoskeletal and Skin Diseases. National Institutes of Health. U.S. Department of Health and Human Services. Rheumatoid Arthritis. May 2004.

⁴  Lee DM, Weinblatt ME. Rheumatoid Arthritis. The Lancet. 2001;358:903-11.

Bristol-Myers Squibb Media Jennifer Fron Mauer, 609-252-6579 jennifer.mauer@bms.com mailto:spechts@zymogenetics.com or Investors John Elicker, 609-252-4611 john.elicker@bms.com Alder Media and Investors Ian M. Stone, 619-528-2220 ian.stone@russopartnersllc.com   or David Schull, 212-845-4271 david.schull@russopartnersllc.com

###

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Exhibit H

[***].

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EX-10.9

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EXHIBIT 10.9

ADDENDUM NO. 1

TO COLLABORATION AND LICENSE AGREEMENT

THIS ADDENDUM NO. 1 TO COLLABORATION AND LICENSE AGREEMENT (the “Addendum”) is made and entered into effective as of January 21, 2011 (the “Addendum Effective Date”) by and among ALDERBIO HOLDINGS LLC (“AlderHoldings”), a Nevada limited liability company having its principal place of business at 101 Convention Center Drive, Suite 850, Las Vegas, Nevada 89109, ALDER BIOPHARMACEUTICALS INC., a Delaware corporation having its principal place of business at 11804 North Creek Parkway South, Bothell, Washington 98011 (“AlderBio”) and BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation having offices at 345 Park Avenue, New York, New York 10154 (“BMS”). Alder Holdings and AlderBio are collectively referred to herein as “Alder”.

The Parties entered into that certain Collaboration and License Agreement dated as of November 6, 2009 (the “Agreement”).

The purpose of this Addendum is to confirm that Alder and BMS have agreed to undertake, pursuant to the Agreement, certain activities and to specify the terms and conditions agreed upon by Alder and BMS with respect to such activities.

All capitalized terms that are used in this Addendum but are not defined herein shall have the meanings given to them in the Agreement.

As contemplated by Section 6.3(b)(ii) of the Agreement, BMS has notified Alder that it desires to receive and use (solely as permitted by the last sentence of Section 6.3(b)(ii) of the Agreement) the Alder Future Process Know-How for the Future Process developed by [***] pursuant to [***] (such Future Process, the “B2 Process”). Pursuant to Section 6.3(b)(ii) of the Agreement, BMS is obligated to reimburse Alder for fifty percent (50%) of all past and future documented out-of-pocket costs and expenses incurred by Alder in connection with the development or optimization of the B2 Process by [***]. Such reimbursement obligation is subject to the $[***] reimbursement cap specified in Section 6.4(a)(ii) of the Agreement. Since Alder has already incurred more than $[***] in out-of-pocket costs and expenses in connection with the development or optimization of the B2 Process by [***], BMS is obligated to reimburse Alder for $[***] of such costs and expenses. Notwithstanding the procedures and time periods specified in the fifth (5^th) and seventh (7^th) sentences of Section 6.3(b)(ii) of the Agreement for BMS’ reimbursement of such costs and expenses, Alder shall provide BMS with an invoice for $[***] on or promptly after the Addendum Effective Date (as defined above) and another invoice for $[***] on the earlier of (a) the Completion Date (as defined below) or (b) June 30, 2011. BMS shall pay to Alder each invoiced amount within [***] after the receipt of the applicable invoice.

Alder and BMS desire to avoid potential future insufficiency of ALD518 supply and have agreed to undertake certain work directed to optimizing the production strain for ALD518 and to improving the process for manufacturing ALD518. The goal of such work is an improved manufacturing process that, when implemented with the optimized production strain, produces

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[***] of purified ALD518 [***] (the “Goal”). The Parties wish to implement such improved manufacturing process prior to initiating manufacture of ALD518 for use in Phase 3 Clinical Trials. The scope, activities and timelines for such work and the Parties’ rights and obligations with respect thereto are as follows:

1. The work to be conducted is described in Exhibit A (the “Work Plan”). Since the Work Plan includes making changes to the production strain for ALD518 (which is defined in the Agreement as Production Strain Work), the Work Plan is deemed to be a Production Strain Work Plan as contemplated by Section 6.8 of the Agreement and the Parties’ performance of the Work Plan will be overseen by the JMC or a subcommittee thereof as contemplated by Section 6.8 of the Agreement.

2. Alder shall be responsible for conducting the strain development activities specified in the Work Plan. Alder and BMS shall be jointly responsible for conducting the process improvement activities specified in the Work Plan and will use the current optimized ALD518 manufacturing process developed pursuant to [***] (the “B2 Process”) as the starting point for such activities.

3. Each Party shall use commercially reasonable efforts to conduct and complete the Work Plan activities allocated to it within the timeframe specified in the Work Plan; provided, however, that neither Party shall have any obligation to continue performance of the Work Plan after the earlier of: (i) the date of achievement of the Goal (such date, the “Completion Date”); or (ii) [***]. It is expected that the work as set forth in the Work Plan will be completed on or before [***].

4. As specified in Section 6.8 of the Agreement, BMS is to reimburse Alder for out-of-pocket costs and FTE costs (at the FTE Rate) with respect to performing Production Strain Work. Accordingly, BMS shall reimburse Alder for documented out-of-pocket costs and FTE costs (at the FTE Rate) incurred by Alder in the performance of the strain development work specified in the Work Plan in accordance with this Addendum, provided that (i) Alder’s out-of-pocket costs and the level of FTE effort shall be consistent with the applicable provisions of Exhibit A (or an amendment thereto or as otherwise approved in writing by both Parties in advance of being incurred) and (ii) Alder’s total out-of-pocket costs and FTE costs (at the FTE Rate) with respect to such strain development work shall not exceed $[***] without approval in writing by both Parties. Alder has already incurred [***] in the course of performing strain development activities specified in the Work Plan prior to October 1, 2010. On or promptly after the Addendum Effective Date, Alder shall send an invoice to BMS for such amount and BMS shall pay such invoiced amount to Alder within [***] after the receipt of such invoice. Within [***] after each calendar quarter between the Addendum Effective Date and [***], Alder shall provide BMS with an invoice setting forth the out-of-pocket costs and FTE costs (at the FTE Rate) incurred during such calendar quarter (and for the first such invoice, during the period between October 1, 2010 and the Addendum Effective Date) in the course of performing the strain development work specified in the Work Plan in accordance with this Addendum and shall include with such invoice reasonable documentation for such costs. BMS shall pay Alder the amount correctly invoiced within [***] after BMS’ receipt of the invoice.

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5. Each Party shall bear all costs it incurs in the course of performing process improvement activities specified in the Work Plan.

6. Alder and BMS shall share equally all documented out-of-pocket costs and FTE costs (at the FTE Rate) incurred by either Party in the course of performing analytical characterization work specified in the Work Plan in accordance with this Addendum, provided that (i) such out-of-pocket costs and the level of FTE effort shall be consistent with the applicable provisions of Exhibit A (or an amendment thereto or as otherwise approved in writing by both Parties in advance of being incurred) and (ii) each Party’s total out-of-pocket costs and FTE costs (at the FTE Rate) for such analytical characterization work shall not exceed $[***] without approval in writing by both Parties. Within [***] after each calendar quarter between the Addendum Effective Date and [***], [***] shall provide [***] with an invoice setting forth fifty percent (50%) of the out-of-pocket costs and FTE costs (at the FTE Rate) incurred by such Party during such calendar quarter in the course of performing the analytical characterization work specified in the Work Plan in accordance with this Addendum and shall include with such invoice reasonable documentation for such costs. The other Party shall pay such Party the amount correctly invoiced within [***] after the receipt of the invoice.

7. Alder and BMS hereby agree that the FTE Rate with respect to the Parties’ performance of the Work Plan in accordance with this Addendum shall be [***] per FTE per year.

8. If the Parties’ performance of the Work Plan in accordance with this Addendum results in achievement of the Goal, then the ALD518 manufacturing process created thereby shall be deemed the “B3 Process”. The technical transfer and implementation of the B3 Process to a Third Party manufacturer is outside the scope of this Addendum and will be subject to a separate agreement between the Parties.

9. On or about [***], Alder and BMS shall assess the progress and accomplishments of the Parties’ performance of the Work Plan and will discuss what, if any, additional work would need to be performed after [***] to further the B3 Process or to achieve the Goal. Any additional work would be performed pursuant to a separate written agreement between the Parties or an addendum to this Addendum.

10. The Parties acknowledge that, in accordance with Section 6.8 of the Agreement, any production strain generated pursuant to Parties’ performance of the Work Plan in accordance with this Addendum shall be deemed Alder Material for all purposes of the Agreement, and BMS shall use such production strain solely in accordance with, and subject to the terms and conditions of, the Agreement.

11. The Parties acknowledge and agree that any and all inventions and Information conceived, discovered, developed or otherwise made by or on behalf of either Party in the course of conducting the Work Plan shall be Sole Inventions and Joint Inventions, as the case may be, subject to Sections 7.1 and 9.2 of the Agreement. The Parties acknowledge and agree that any such Sole Inventions of BMS shall be deemed to be BMS Improvements, subject to the license to Alder under Section 7.8 of the Agreement and the restrictions set forth in Section 7.14. BMS’ rights and licenses with respect to the use and practice of the Alder Mab Xpress Technology are limited to those rights and licenses set

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forth in Sections 7.4(iii) and 7.9(d) of the Agreement. Accordingly, BMS may be required to obtain additional license(s) to the Alder Mab Xpress Technology in order to use and practice such Sole Inventions of BMS and such Joint Inventions for other purposes. For the purposes of Article 12 of the Agreement, (i) Information generated by Alder in the performance of the Work Plan shall be deemed to be Confidential Information of Alder (notwithstanding the penultimate sentence of Section 12.1) and (ii) Information generated by BMS in the performance of the Work Plan shall be deemed to be Confidential Information of both Parties. Notwithstanding the last sentence of Section 12.1, BMS agrees that Alder may use Information generated by BMS in the performance of the Work Plan for any purpose that does not violate Article 11 or Applicable Law, subject to the [***] licenses granted by Alder to BMS under Article 7 and, with respect to Publication, subject to Section 12.4. BMS confirms that its use of any Alder Material (and any derivatives, parts or progeny thereof) shall be subject to the restrictions set forth in the Agreement, including without limitation those set forth in Section 7.13.

12. The Parties acknowledge that the Work Plan is being conducted under the Agreement and all terms and conditions of the Agreement, except as expressly set forth in this Addendum, apply to the Parties’ performance of the Work Plan.

This Addendum will become effective as of the Addendum Effective Date and shall continue in effect, except to the extent it is amended or terminated in accordance with Section 17.1 of the Agreement, throughout the remainder of the Term.

This Addendum is hereby incorporated into and made part of the Agreement. All the terms and conditions of the Agreement remain in full force and effect, except as expressly indicated otherwise in this Addendum.

IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed by their duly authorized representatives effective as of the Addendum Effective Date.

ALDER BIOPHARMACEUTICALS INC.		ALDERBIO HOLDINGS LLC
By:	/s/ Randall C. Schatzman	By:	/s/ Randall C. Schatzman
	Randall C. Schatzman, Ph.D President and Chief Executive Officer		Randall C. Schatzman, Ph.D Manager

BRISTOL-MYERS SQUIBB COMPANY
By:	/s/ John Tabor
Name: Title:	John Tabor VP, BTPM

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Exhibit A

to Addendum No.1

1. Summary of Strain and Process Improvement Activities

1.1. Statement of Goals for the Strain and Process Improvement

The goal of the strain and process improvement activities are to generate an improved Pichia pastoris strain and/or manufacturing process with an overall target productivity of [***] purified protein [***] of fermentation volume while maintaining or improving current product quality. The approach is that a combination of [***] will yield that target.

1.2. Strain Development Activities (to be carried out by Alder)

• [***] in Pichia pastoris

• Test promising leads in optimized process to evaluate specific potential (specific productivity, whole-broth titer, genetic stability)

• [***] suitable for commercial production of ALD 518.

• Strain-specific optimization of lead production strains

• Provide lead production strains to BMS for further evaluation.

1.3. Process Improvement Activities of B2 Process (to be carried out by Alder and BMS)

• Technical transfer of the B2 Process to BMS at the [***].

• Continued work on the fermentation process potentially with the new lead strains to maximize titer while maintaining product quality (build on work already performed for B2 Process)

• Optimize operating parameters ([***])

• [***]

1.4. Analytical characterization of product quality (work to be done at BMS or outsourced)

2. Details of the Improvement Activities

2.1 Strain Development Activities

2.1.1. [***]

Targeting of [***] will be tested to:

(a) [***]

(b) [***]

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(c) [***]

(d) lead candidate strains will be transferred to BMS for process improvement studies.

2.1.2. [***] Development

(a) Current [***] products have been established to be generated via targeting [***] ALD518

(b) Assessment of the genome will be conducted to identify additional members of [***]

(c) A strategy[***] will be developed and implemented to assess product quality as well as strain productivity and stability

(d) If necessary, [***] will be prepared and characterized as above

2.1.3. On-going technology development

A number of additional enhancements of the production platform will be under investigation as Mab Xpress undergoes its next level of enhancement. It is anticipated that some of these advancements may be applicable to the commercial process for producing ALD518. Outcomes of this work fall outside the scope of this Addendum.

2.1.4. Estimated Cost Projections for Strain Development Activities

Total Project Cost of Strain Development Activities at Alder: ~$[***]

(a) Alder Yeast Expression Work prior to Nov. 2010: ~[***] FTE [***]; ~$[***]

(b) ~[***] man months at Alder ([***]): ~$[***]

2.2. Process Improvement Activities

Outside of these activities is the ongoing [***] support by Alder for the B2 Process (costs are included in the costs and BMS reimbursement payment for the B2 Process as set forth in the Addendum)

2.2.1. Tech Transfer to establish B2 Process at BMS

• Gary Lesnicki to Syracuse mid December, completed

• Z. Li to visit Alder, pending

• Goal: comparable data using same protocol

2.2.2. Assay Transfer to BMS if applicable

• Titer—[***] standardization between Alder and BMS

• Purity—[***] method standardization between Alder and BMS

2.2.3. Screening of new strains at Alder at the [***] fermentation scale

• This activity will start at Alder in [***].

• Each run set contains [***] parallel fermentations

• Total successful run sets: [***]

• FTE requirements: [***]

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2.2.4. Purification at Alder of lead strain candidates ([***])

To assess behavior of molecule during purification and for product quality assessment

• Assumption: [***]

• [***] purifications x [***] x [***] FTEs equals [***]

2.2.5. Fermentation process improvement at BMS at the [***] fermentation scale

Requires successful process transfer to BMS (see 2.2.1.).

The goal is to optimize the fermentation conditions for yield and scalability.

• This activity will start at BMS in [***].

• Each run set contains [***] parallel fermentations

• Total successful run sets: [***]

• FTE requirements: [***] x [***] x [***] FTEs equals [***]

2.2.6. Estimated Cost Projections for Process Development Activities

Approximately [***]: ~$[***]

2.3. Analytical Characterization

Work will be required for analytical characterization of the lead candidates. This will include [***] and [***]. Depending on resource availability this work could be done by BMS in-house or outsourced. Total cost not to exceed $[***] per Party as set forth in paragraph 6 of the Addendum.

3. Summary of Estimated Costs

Activity	Total Cost	Cost incurred by Alder	Cost incurred by BMS
Strain Development1	[***]	[***]	[***]
Process Development2	[***]	[***]	[***]
Analytical Characterization3	[***]	[***]	[***]

¹  [***].

²  [***].

³  [***].

Page 8 to follow.

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Timeline—[***]

[***]

EX-10.10

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EXHIBIT 10.10

MASTER SERVICES AGREEMENT

THIS MASTER SERVICES AGREEMENT (this “Agreement”) is effective as of October 14, 2013 (the “Effective Date”) and is entered into among Alder Biopharmaceuticals Inc., a Delaware corporation (“Alder”) having its principal place of business at 11804 North Creek Parkway South, Bothell, WA 98011, USA, FUJIFILM Diosynth Biotechnologies U.S.A., Inc., a Delaware corporation (“FDBU”), formerly known as Diosynth RTP Inc., having its principal place of business at 101 J. Morris Commons Lane, Morrisville, NC 27560 USA, and FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), having its principal place of business at Belasis Avenue, Billingham, TS23 1LH, United Kingdom (each a “Party”, and, two or all of them, collectively, the “Parties”). In this Agreement, the term “Fujifilm” means, individually and collectively, as the context requires, FDBU and/or FDBK.

The Parties intend that, under this Agreement, from time to time, Alder may desire FDBU and/or FDBK to carry out Programs in relation to the production of Products, and FDBU and FDBK may agree to carry out Programs in relation to the production of Products, under the terms of this Agreement and the applicable Statements of Work (all as defined below).

Now, therefore, for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties agree as follows:

Definitions:

“Affiliate” shall mean in relation to any Party, any corporation, association or other business entity which directly or indirectly controls, is controlled by or is under common control with such Party, and “control” shall mean the legal power to direct or cause the direction of the general management and policies of such entity whether through the ownership of at least 50% of voting securities or capital stock of such business entity or any other comparable equity or ownership interest with respect to a business entity other than a corporation.

“Agreement” shall mean this Agreement (as defined in the preamble), and, as the context requires, this Agreement together with the Quality Agreement, the applicable Statements of Work, and any other documents or agreements incorporated by reference into this Agreement from time to time.

“Alder” shall mean Alder Biopharmaceuticals, Inc.

“Alder’s Confidential Information” shall have the meaning set forth in Section 7(a).

“Alder Process Invention” shall have the meaning set forth in Section 9(a).

“Alder Technology” shall mean all materials, reagents and processes (together with associated data and information) owned or possessed by Alder and their progeny and derivatives, associated with [***], transferred to Fujifilm for use during a Program or transferred to Fujifilm for use under the Prior Agreement. The foregoing includes, without limitation, [***]. Alder Technology shall be included within Alder Confidential Information.

“Assumptions” shall have the meaning set forth in Section 6(a).

“Batch” shall mean the quantity of Product derived from a single run of the Process under this Agreement.

1.

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“Batch Cancellation Fee” shall mean the applicable sum, if any, detailed in the applicable Statement of Work payable by Alder as a result of its cancellation of a GMP Batch or GMP Batches. A Batch Cancellation Fee is a type of “Cancellation Fee”.

“Campaign Cancellation fee” shall mean the applicable sum, if any, detailed in the applicable Statement of Work payable by Alder as a result of its cancellation of an entire GMP Campaign or termination of a GMP Program. A Campaign Cancellation Fee is a type of “Cancellation Fee”.

“cGMP” shall mean the regulatory requirements for Current Good Manufacturing Practices which are applicable to the circumstances in which the term is being used, as each may be amended from time to time, including without limitation the U.S. Federal Food, Drug, and Cosmetic Act, as amended, and its implementing regulations, and Directive 91/356/EEC, as amended by 2003/94/EC, and the Guide to Good Manufacturing Practice (Volume 4 of “The rules governing medicinal products in the European Union”), including the Rules and Guidance for Pharmaceutical Manufacturers and Distributors 2007 part II: Basic Requirements for Active Substances used as Starting Materials, and ICHQ7 — as incorporated in the EU in Annex 18 to the GMP Guide, and in the USA in the Federal Register volume 86 No 186 (ICHQ7).

“Claim” shall have the meaning set forth in Section 15(a).

“Confidential Information” shall mean Alder’s Confidential Information and/or Fujifilm’s Confidential Information, as the context requires.

Conforming GMP Batch and Conforming GNP Product: A GMP Batch (or, as the context requires, GMP Product) that meets all of the following requirements:

(i) has been manufactured in compliance with all cGMP requirements;

(ii) conforms to the Product Specification; and

(iii) conforms to all of the additional requirements, if any, set forth in the applicable Statement of Work.

“Disposition” shall mean the stage during a Program or the process by which all data, records and documentation (including executed batch manufacturing records) related to cGMP manufacture of each GMP Batch is reviewed.

“Disposition Package” shall mean the compilation of data, records and documentation for a GMP Batch, including but not limited to, executed batch manufacturing records, genealogy, certificate of analysis (“COA”) and associated Quality Control data, and any other data, records or documentation required under the Quality Agreement.

“Drug Product” shall mean the final dosage form of the Product which [***] and which contains Product in association with other active or inactive ingredients.

“Facility” shall mean, with respect to FDBU, its manufacturing facility at [***], and, with respect to FDBK, its development and manufacturing facility at [***], or such other facility or facilities identified in the applicable Statement of Work, as the context requires.

“Fujifilm’s Confidential Information” shall have the meaning set forth in Section 7(b).

“Fujifilm Factor” shall mean any of the following factors: (a) [***], (b) the [***], (c) the [***]; (d) the [***], or (e) the [***]. For the avoidance of doubt, [***].

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“Fujifilm Process Invention” shall have the meaning set forth in Section 9(a).

“GMP Batch” shall mean a Batch which is identified in a Statement of Work as a GMP Batch and which is or is intended to be manufactured during a GMP Stage and subject to Disposition, all in accordance with cGMP, and “GMP Product” shall mean the Product from or in the GMP Batch.

“GMP Stages” shall mean the Stages of a Program identified in the applicable Statement of Work during which activity associated with cGMP manufacture of Product is or is intended to take place, including cGMP preparation, engineering runs, cGMP manufacturing (including production and pre- and post-manufacturing cleaning, as well as any cleaning required between Batches), Disposition and reporting.

“Impasse Notice” shall have the meaning set forth in Section 6(b).

“Issued Batch Record” shall mean the batch record Instruction issued from the Master Batch Record for completion in production.

“Legal Requirements” shall mean all laws, rules, regulations, ordinances, guidance, guidelines, and standards of any governmental or regulatory authority which are applicable to the circumstances in which the term “Legal Requirements” is used, including without limitation (a) cGMP, (b) the regulations and regulatory guidance promulgated by the FDA, the MHRA or the EMA (and, subject to express prior written agreement of the Parties, other applicable Regulatory Authorities), and (c) all laws and regulations requiring permits, licenses, filings or certifications with respect to Alder, Fujifilm, a Facility, or the manufacture of Product or performance of other obligations under this Agreement.

“manufacture” or “produce” shall mean all steps and activities performed or to be performed by Fujifilm to produce Product, as set forth in the applicable Statement of Work, including, as applicable, the manufacturing, formulation, filling, finishing, packaging, inspection, labeling, testing, quality control, disposition, release, shipping and storage of Product.

“Master Batch Record” shall mean the document which sets out in detail the master production instructions for production of Product, as defined in sections 6.4 and 6.5 of the Rules and Guidance for Pharmaceutical Manufacturers and Distributors Part II: Basic Requirements for Active Substances Used as Starting Materials. The Master Batch Record, and any changes thereto, must be reviewed and approved by both Parties.

“Modification” shall have the meaning set forth in Section 6(a).

“Non-Conforming GMP Batch” and “Non-Conforming GMP Product” shall mean any GMP Batch or any Product from a GMP Batch which fails to meet any of the following requirements: (i) has been manufactured in compliance with all cGMP requirements; and (ii) conforms to the Product Specification; and (iii) conforms to all of the additional requirements, if any, set forth in the applicable Statement of Work.

“Non-GMP Stages” shall mean the Stages of a Program other than GMP Stages.

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“Party” or “Parties” shall have the meaning set forth in the preamble. As the context requires, the phrase “either Party” or “the Parties” refers to Alder, on the one hand, and FDBU and/or FDBK, on the other hand.

“Prior Agreement” shall mean the bioprocessing services agreement between Alder and FDBU dated [***] (as may have been amended in writing by the Parties from time to time, the “Prior BSA”) under which Fujifilm provided bulk drug manufacturing services and/or the quality agreement between Alder and FDBU that is related to the Prior BSA (the “Prior QA”).

“Process” shall mean the process for manufacture of a Product.

“Process Consumable” or “Consumable” shall mean a consumable item used or intended for use in a Program including, without limitation, reagents, raw materials, packaging components, chromatography resins, filters, filtration membranes, media, buffer bags, refold bags, tubing, hoses, disposable analytical test kits, in-process measurement probes, analytical columns and disposable containers.

“Process Specification” shall mean the document which defines all steps in the Process, including any critical processing parameters and in-process specifications.

“Product” shall mean the proprietary product of Alder which is the subject of a Program as identified in the applicable SoW. When the context requires, the term “Product” also means the tangible forms of Product which are or are to be manufactured by Fujifilm under this Agreement.

“Product Invention” shall have the meaning set forth in Section 9(a).

“Product Specification” shall mean the qualitative, quantitative, functional and analytical specifications that describe testing methods and acceptance criteria for Product, as set out in the quality documents, as agreed and as amended from time to time by the Parties.

“Program” shall mean the services to be performed under this Agreement and the applicable Statement of Work, as set out in the applicable Statement of Work.

“Program Amendment Order” or “PAO” shall mean a document detailing changes to the Agreement and/or a Program, in each case as agreed and signed by the applicable Parties.

“Program Price and Payment Schedule” shall mean the program price and payment schedule attached to or contained in the applicable SoW.

“Quality Agreement” shall mean the quality agreement dated as of the Effective Date entered into by the Parties.

“SoW” or “Statement of Work” shall mean the scope of work or statement of work agreed and signed by the applicable Parties setting out in detail the work to be undertaken during a Program. As the context requires, references to a “Scope” shall be deemed references to the applicable Statement of Work, with the appropriate changes having been made, mutatis mutandis.

“Work Output” shall have the meaning set forth in Section 8(a).

References in this Agreement to “Schedules” refer to the Schedules incorporated into this Agreement. References to Sections and Clauses are references to sections and clauses in this Agreement unless specified otherwise. References to the singular include the plural and vice versa, and “include” and “including”, etc., means including without limitation.

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Section 1.

SoWs /Performance of Programs

a) From time to time, at Alder’s request, the Parties will agree on Programs to be undertaken. It is intended and the Parties agree that each Program will be subject to a separate, numbered, Statement of Work (being “Statement of Work #1”, “Statement of Work #2”, etc.). It is intended and the Parties agree that each Statement of Work shall be signed by Alder and FDBU and/or FDBK, depending on which of them shall be the primary party to perform the work defined under such Statement of Work, and, once its terms are agreed and, on signature, the Statement of Work shall be subject to the terms of and incorporated into this Agreement by this reference.

b) Fujifilm shall perform its obligations in accordance with and as set forth in this Agreement, the Statements of Work and the Quality Agreement. Without limitation, Fujifilm will timely and diligently perform each Program for Alder in accordance with the terms and conditions of this Agreement, the applicable SoW and the Quality Agreement through the devotion of a sufficient number of persons of requisite skill and training. Subject to and in each case as limited by Section 1(g) and Section 1(h), Alder may require that any deficient or defective Program services be reperformed or corrected, at Fujifilm’s expense.

c) Terms defined in the main body of this Agreement shall have same meaning when used in the Sow or Quality Agreement, unless a different meaning is given therein. in the event of any conflict between or among the component parts of this Agreement, then, unless the Parties expressly agree that a particular clause will control over all other component parts, the following order of precedence shall apply:

1. the provisions in the main body of this Agreement;

2. the provisions in the Quality Agreement and

3. the provisions in the SoW.

d) Alder shall perform its obligations in accordance with and as set forth in this Agreement, the applicable SoW and the Quality Agreement, shall support and cooperate with the execution of each Program and shall not knowingly engage in any act or omission, which may reasonably be expected to prevent or delay the successful execution of a Program. The foregoing shall not be construed in derogation of Alder’s rights to terminate this Agreement pursuant and subject to the terms of this Agreement.

e) Fujifilm warrants (as of the time of delivery) and covenants, as applicable, that all Product is and will be [***]. Fujifilm warrants (as of the time of delivery) and covenants, as applicable, that, with respect to each non-GMP Batch that is a development batch, Fujifilm has [***] to ensure that the [***] (including [***]) set forth in the applicable documents. Fujifilm warrants (as of the time of delivery), and covenants, as applicable, that each GMP Batch and all GMP Product: [***].

f) Fujifilm shall provide Alder’s quality assurance department with a Disposition Package within [***] of completion of Disposition of each GMP Batch by Fujifilm and (if appropriate) a recommendation for such batch to be released and, if requested samples of such Batch. Within [***] after Alder’s receipt of the Disposition Package together with any requested samples, Alder shall review the Disposition Package in order to determine, to the extent reasonably ascertainable therefrom and subject to Alder’s rights below, whether it agrees with Fujifilm’s findings in the Disposition Package, and, in particular, with Fujifilm’s determination of conformity or non-conformity. Any complaints of non-conformity by Alder in relation

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to the Disposition Package shall be delivered to Fujifilm in writing within [***] after receipt by Alder of the Disposition Package together with any requested samples (or, in the case of a latent non-conformity that was not readily ascertainable therefrom, within [***] after discovery of such latent non-conformity and in any case within [***] following delivery of the Disposition Package), accompanied by supporting data.

If the Parties do not agree on Fujifilm’s findings in the Disposition Package, and, in particular, with Fujifilm’s determination of conformity or non-conformity, or [***], the matter shall be [***].

g) The following provisions shall apply if Fujifilm determines or the Parties agree [***] that there is Non-Conforming GMP Product:

(i) The Non-Conforming GMP Product shall not be delivered to Alder, unless Alder requests it. If Alder requests delivery of the Non-Conforming Product, Fujifilm shall deliver such Non-Conforming Product. If Alder requests delivery of the Non-Conforming GMP Product, and the parties agree on an equitable price for the Non-Conforming GMP Product (which shall be negotiated in good faith by the parties), then, unless prohibited by applicable Legal Requirements, Fujifilm shall deliver such Non-Conforming GMP Product in accordance with Section 12(a) and Alder shall pay to Fujifilm the agreed price.

(ii) [Reserved]

(iii) The following provisions shall apply if the non-conformity was not caused by any Fujifilm Factor:

(1) Alder shall be obliged to make payment for the manufacture of such Non-Conforming Batch as set out in the applicable Program Price and Payment Schedule.

(2) if Alder wishes Fujifilm to carry out additional work under a Program, such additional work, including the rework or reprocessing of the Non-Conforming GMP Product or the manufacture of a new GMP Batch, shall be carried out at a time to be agreed and subject to agreement of the price payable in respect of such rework, reprocessing or further manufacture, such agreement to be recorded in a PAO.

(iv) The following provisions shall apply if the non-conformity was caused by any Fujifilm Factor(s): Fujifilm shall, at Alder’s option:

(1) Subject to Section 1(g)(iv)(2) below, replace the Non-Conforming GMP Product with Conforming GMP Product, at no additional cost to Alder, either through rework or reprocessing of the Non-Conforming GMP Batch (if Alder consents to such rework or reprocessing), or additional manufacture of Conforming GMP Product, all of which shall be undertaken at Fujifilm’s cost and expense (including with respect to Consumables), as soon as reasonably practicable. For clarity, under this option, the payment due at or following completion of the manufacture of the GMP Batch shall not be due until the date on which the replacement Product is Dispositioned and agreed to be Conforming GMP Product by both parties [***]

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[***]. Subject to availability of Consumables, Fujifilm shall use commercially reasonable efforts to initiate such replacement within [***] of the date on which Fujifilm determines or the Parties agree (or, in the absence of agreement, [***]) that there is Non-Conforming GMP Product.

(2) If (A) Fujifilm is unable to or if Fujifilm reasonably determines that it will be unable to initiate the replacement of the Non-Conforming GMP Product with Conforming GMP Product within the period specified in Section 1(g)(iv)(1) above (which determination shall be promptly notified to Alder), or (B) the Product manufactured under Section 1(g)(iv)(1) is Non-Conforming GMP Product and the non-conformity was caused by any Fujifilm Factor(s), then, in either case, at Alder’s option:

(i) In the case of Section 1(g)(iv)(2)(A), Alder may cancel any such replacement [***], and, in addition, in the case of Section 1(g)(iv)(2)(A) or (B), Alder may issue instructions to Fujifilm for, at Alder’s option, a payment to Alder of [***] and any other part of the Program that is invalid as a result of the Non-Conformity; Alder [***]; if Alder issues instructions [***], Fujifilm shall issue the payment/credit within [***] of receipt of the payment/credit instructions; or

(ii) Alder may issue instructions to Fujifilm for replacement, at a date mutually agreed to by the Parties, under Section 1(g)(iv)(1), and Fujifilm shall proceed accordingly.

(3) For clarity, in addition, and if applicable, Fujifilm shall either, at Fujifilm’s option, [***], to the extent that the life span of such Consumable has been shortened or if such Consumable has been rendered unusable.

h) Except for the indemnities provided in this Agreement and except for any other rights or remedies expressly set forth in this Agreement (including, for example, its termination rights, and its right to [***]), the remedies set out in Section 1(g) shall be Alder’s sole remedies against Fujifilm for any Non-Conforming GMP Batch caused by or arising as a result of a Fujifilm Factor.

i) if the parties do not agree on Fujifilm’s findings in the Disposition Package, and, in particular, with Fujifilm’s determination of conformity or non-conformity, or on the cause of non-conformity, the matter shall be [***] in accordance with this Agreement and the Quality Agreement. If the parties agree to [***] additional testing or analysis of samples, Fujifilm [***] shall perform the testing and analysis activities. The costs of such [***] shall be [***]; provided, however, that if [***] is the

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prevailing party, [***] shall [***] for [***]. The decision [***] shall be in writing [***]. For the avoidance of doubt, the Parties will follow Fujifilm quality procedures and cGMP while accepting or rejecting the disputed Batch.

j) Unless Alder requests delivery of Non-Conforming GMP Product (for clarity, the Parties acknowledge that any such delivery would be subject to applicable Legal Requirements), Fujifilm shall dispose of Non-Conforming GMP Product in accordance with all applicable Legal Requirements, [***] if the non-conformity was caused by any Fujifilm Factor(s) and [***].

k) Alder may cancel one or more Batches comprising a Manufacturing Stage of a Program and, if a Batch Cancellation Fee is applicable under the terms of this Agreement and the related Statement of Work, [***] in consideration for technical consultancy in relation to such cancellation. If Alder cancels all of the Batches in a Program, the applicable Program shall be deemed to have been terminated by Alder for convenience under Section 20(b), unless the parties otherwise agree in writing, and [***] may be applicable under the terms of this Agreement and the related Statement of Work, in which case [***] in consideration for technical consultancy in relation to such cancellation.

l) For each GMP Batch, the Parties will mutually agree on a “Batch Commencement Date” for the Batch (which date may be changed from time to time by mutual agreement of the Parties). The Batch Commencement Date will be used to determine whether [***] payable and, if so, [***]. If a [***] is triggered, Fujifilm shall [***] mitigate its loss in this regard, and the parties shall, acting reasonably and in good faith, negotiate [***].

m) Alder may, in writing, request changes within the general scope of a Program, and, if such change increases or decreases the cost or time required to perform a Program, [***], to reflect the increase or decrease, and the Parties shall enter into a PAO to amend the Statement of Work accordingly.

Section 2.

Alder Deliverables

a) Under each Statement of Work, the Parties will specify with particularity the Alder Deliverables (including any Process Consumables) that are to be provided by Alder for the related Program, and Alder will timely provide Fujifilm with the applicable Alder Deliverables (as listed in the applicable SoW). Failure by Alder to provide Alder Deliverables within the timeframe set forth in the applicable SoW may cause an increase in the cost or time required to perform a Program, and, if so, [***], to reflect the increase or decrease, and shall enter into a Program Amendment Order in accordance with Section 6 of this Agreement.

b) Title to Alder Deliverables shall remain with Alder. [***]. Fujifilm shall not sell, pledge, hypothecate, or otherwise transfer any interest in Alder Deliverables. Fujifilm shall not permit access to Alder Deliverables except to persons who have a need to access in order to perform their duties in carrying out Fujifilm’s

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obligations under this Agreement and shall not part with possession of Alder Deliverables except to Affiliates and other approved subcontractors who have a need to possess in order to perform their duties under this Agreement. Fujifilm shall use Alder Deliverables solely for purposes of performing the applicable Program. Fujifilm shall provide safe and secure storage conditions for Alder Deliverables and protect them from damage and loss while they are at Fujifilm’s location.

c) Fujifilm shall timely procure, all Process Consumables (except Process Consumables to be provided by Alder), subject to reimbursement in accordance with the terms of this Agreement and the related Statement of Work. Fujifilm shall maintain, store and perform testing and evaluation of all Consumables (including Alder-provided Process Consumables), as required by the applicable specifications and cGMP and otherwise in accordance with the Quality Agreement and applicable SOPs. Fujifilm shall use Process Consumables procured for the Programs or provided by Alder for the Programs solely to perform the Programs. Consumables may be subject to a mutually agreed markup, as set out in Section 5(a) of this Agreement or as defined in the applicable Statement of Work.

Section 3.

Compliance with Government Regulations

a) Fujifilm shall perform each Program in a timely and diligently manner; in accordance with the terms and conditions of this Agreement, the applicable SoW and the Quality Agreement; in compliance with all applicable Legal Requirements, including cGMP (as applicable); in compliance with standard operating procedures and protocols already in place at Fujifilm or as agreed upon by the Parties from time to time; and in compliance with all reasonable written directions and requests of Alder. Fujifilm shall manufacture GMP Product in compliance with the Process Specification, cGMP and all other applicable Legal Requirements. Fujifilm shall use the applicable Facility to perform each Program, and shall not use a different facility without the prior written consent of Alder. Fujifilm warrants [***]. This clause is a material clause of this Agreement, and Fujifilm shall promptly notify Alder if it becomes of aware of [***].

b) Alder acknowledges that Fujifilm has consulted with Alder in designing each Program in a manner consistent with current U.S. and European regulatory guidelines. Notwithstanding the foregoing, while Fujifilm [***], Fujifilm [***]. Alder shall have responsibility for determining [***]. The foregoing shall not be construed in derogation of Fujifilm’s obligations set forth in Section 3(a) above.

c) Should any applicable Legal Requirements change, Fujifilm will [***] satisfy the new requirements. In the event that compliance with such new Legal Requirements specifically pertaining to Alder’s Product increases or decreases the cost or time required to perform each Program, the Parties shall negotiate an equitable adjustment in the price or schedule, or both, to reflect the

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increase or decrease, and the Parties shall enter into a Program Amendment Order, as herein after defined, in accordance with Section 6 of this Agreement. Changes to Fujifilm’s facility to entitle it to operate as [***].

d) in the event of a conflict between or among any of the standards set forth in this Section 3, Fujifilm shall comply with the most stringent standard which is permitted by law; in the event of a conflict in Applicable Law, the Parties shall agree on which Applicable Law shall be followed by Fujifilm in its performance of each Program to comply with regulatory requirements and advance the applicable Program.

e) Alder shall notify Fujifilm promptly if any Product is the subject of a recall, withdrawal, field alert or similar action (collectively a “Recall”), and provide Fujifilm with a copy of all documents relating to such Recall. Fujifilm shall reasonably cooperate with Alder in connection with any Recall, [***]. Alder shall [***], and provided further than Alder [***]. For clarity, [***].

Section 4.

Facility Visits; Quality Agreement

a) [***] Alder may carry out one cGMP audit [***], and additional for-cause audits, in accordance with the provisions of the Quality Agreement. [***] audits (other than “for cause” audits) may be carried out subject to [***] and subject to [***]. In addition, Alder may be on-site at the Facility while active production is occurring, in accordance with the provisions of the Quality Agreement. The full terms and conditions of Alder audits and other visits are provided in the Quality Agreement.

b) As soon as possible following execution of this Agreement, the Parties shall execute the Quality Agreement.

c) Upon request, Fujifilm shall provide Alder [***] with the executed batch record for each GMP Batch, in Fujifilm’s standard format or in such other format as may be agreed by the Parties. in addition, Fujifilm shall allow Alder to inspect the following at the Facility and, from the time of manufacture and for at least [***] thereafter, via a web-based portal or other agreed method: copies of applicable Batch Records and other related documentation, data and analytical records, including deviations, discrepancies, out-of-specifications, failures, investigations, and batch-specific environmental monitoring data, water (USP and WFI) and testing data, and all other documentation reasonably requested by Alder related to such Batch, including process data. Fujifilm shall retain and maintain such manufacturing data and documentation in accordance with and for the time periods required by applicable Legal Requirements, and shall not destroy the same without the prior written approval of Alder, provided that Fujifilm may destroy the same if Fujifilm has used Commercially Reasonable Efforts to obtain instructions from Alder and Alder has failed to respond of [***].

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Section 5.

Compensation

a) Each Statement of Work will list in the Program Price and Payment Schedule the research and development and technical consultancy fees for the related Program. In consideration of the research and development and technical consultancy activities performed in accordance with this Agreement, Alder shall make the payments set forth in the Program Price and Payment Schedule when due. Fujifilm will list the [***], and Fujifilm shall provide [***]. Following [***], Fujifilm shall [***], and will [***]. Alder agrees to pay [***] for the Process Consumables purchased for the Program [***], which [***] of [***] (except in the case of chromatography resins, in respect of which the [***]. Unless otherwise specified in the applicable SoW, these amounts will be invoiced [***]. Fujifilm shall [***] purchase Process Consumables [***]. Ownership of such Process Consumables shall be as specified in the applicable SoW.

b) Fujifilm shall issue invoices for the sums due under this Agreement as such sums fall due consistent with the Program Price and Payment Schedule and shall send the invoices electronically to Alder at accounting@alderbio.com or such other email address as Alder may provide, and Alder shall pay amounts due [***] of receipt of the relevant invoice. Late payments are subject to an interest charge of [***]. Unless within [***] of the date of receipt of an invoice, Alder has advised Fujifilm in good faith and in writing the specific basis for disputing an invoice, failure to pay an invoice within [***] from the date of invoice may [***] constitute a material breach of this Agreement. Invoices issued for Product that is the subject of a non-conformity investigation or dispute shall not be due [***] after the matter has been resolved. Invoices will include a summary of activities completed during the invoice period, including activities completed and an indication of Process Consumables purchased.

c) Alder hereby [***] in [***], while it remains [***].

Section 6.

Program Amendment Orders

a) Each Statement of Work will contain certain key assumptions which need to be met in order for Fujifilm to carry out the relevant Program within the total budget for the Program specified in the Program Price and Payment Schedule, the individual budget components and the estimated durations specified in the SoW, which assumptions may include general and Program specific assumptions, as well as the accuracy, timeliness and completeness of Alder’s Deliverables. The assumptions may relate to the Program design and objectives, manpower requirements, timing, capital expenditure requirements, if any, and other matters relating to the completion of the Program, all as set forth in the SoW (“Program Assumptions”). Fujifilm also assumes that Alder will cooperate and perform its obligations under this Agreement and SoW in a timely manner, that no force majeure event described in Section 17 will occur, and that there will be no changes to any applicable laws, rules or regulations that will have a material effect on the cost or time required to perform the related Program (the foregoing assumptions together with the Program Assumptions,

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

collectively, the “Assumptions”). If actual circumstances materially differ from the Assumptions set out in the relevant Statement of Work or as otherwise referred to in this Section 6(a), thereby causing an increase or decrease in the cost or time required to perform the Program, the Parties [***] to reflect the increase or decrease, and the Parties shall enter into a PAO to amend the Statement of Work accordingly. Fujifilm and Alder each represent [***]; provided, however, that Alder [***].

b) In the event a modification contemplated by Section 6(a) (each, a “Modification”) is requested by Alder or is identified by Alder or by Fujifilm, the identifying Party shall notify the other Party as soon as is reasonably possible. Fujifilm shall provide Alder with a draft PAO containing an estimate of the required Modifications to the Program budget, activities and/or estimated duration as specified in the SoW (“Program Amendment Order”) [***] of receiving such notice or providing such notice to Alder. Alder shall respond in writing to such Program Amendment Order [***] of receiving such Program Amendment Order indicating whether or not it approves the proposed Program Amendment Order. Alder shall be deemed to have disapproved the Program Amendment Order if Fujifilm does not receive a written indication from Alder during such [***] period. If Alder does not approve such Program Amendment Order, then Alder and Fujifilm shall [***] agree on a Program Amendment Order that is [***]. If practicable. Fujifilm shall continue work on the Program during any such negotiations, but shall not commence work with respect to the Program Amendment Order unless authorized in writing by Alder. If a Modification results in a Program Amendment Order [***] after issuance of the relevant Program Amendment Order and [***] then Fujifilm shall, if reasonably possible, perform the SoW as modified by previously executed Program Amendment Orders, if any, without regard to the unresolved Program Amendment Order; provided, however, that the estimated timelines shall be adjusted to reflect any delay during the negotiation period. In the event that in Fujifilm’s reasonable judgment such performance in not possible in accordance with the current SoW and Program Price and Payment Schedule, then Fujifilm shall provide written notice to Alder of its inability to perform in the absence of an agreed upon Program Amendment Order (the “Impasse Notice”). Upon issuance of an Impasse Notice, either Party shall have the option to terminate this Agreement or the Program affected by such Program Amendment Order within [***] following such Impasse Notice. For clarity, following issuance of an Impasse Notice, either Party may initiate the arbitration procedures set forth in Section 14 [***], whether or not the Agreement or a Program has been terminated and if such termination has occurred, irrespective of whether such Party was the terminating Party. In determining [***], if any, the arbitrator(s) shall consider [***] and, if so, [***].

Section 7.

Confidential Information/Legal Proceedings

a) Except as otherwise expressly permitted under this Agreement, Fujifilm shall not disclose, without Alder’s written permission, any confidential information pertaining to any Program or any other proprietary, confidential and/or trade secret information or materials disclosed to, delivered to or obtained by Fujifilm under or in anticipation of this Agreement or the Prior Agreement, including, but not limited to, Alder

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Technology (all of the foregoing, “Alder’s Confidential Information”) unless: (i) such disclosure is to an Affiliate of Fujifilm that is under an obligation of confidentiality and non-use and inventions to Fujifilm no less burdensome than such obligations of Fujifilm to Alder and for whose actions Fujifilm shall remain liable, and who has a need to know the Confidential Information to perform the applicable Program or otherwise as necessary to perform Fujifilm’s obligations or exercise its rights under this Agreement (ii) such information is or becomes publicly available through no fault of Fujifilm and through no other breach of an obligation of confidentiality owed to Alder or its Affiliate(s); (iii) such information is disclosed to Fujifilm on a non-confidential basis by a third party entitled to disclose it and who did not acquire it directly or indirectly from Alder; (iv) such information is already known to Fujifilm on a non-confidential basis as shown by its prior written records, and was not acquired directly or indirectly from Alder; or, (v) such disclosure is required by any law, rule, regulation, order decision, decree, subpoena or other legal process to be disclosed. If such disclosure is required by legal process, Fujifilm will make all reasonable efforts to notify Alder of this request promptly prior to any disclosure to permit Alder to oppose such disclosure by appropriate legal action. Fujifilm shall use reasonable precautions to protect the confidentiality of Alder’s Confidential Information comparable to precautions taken to protect its own proprietary information including restricting access to such information to such of its employees as are bound to keep such information confidential and need to have such access for the purpose of this Agreement. Without limitation, Alder Technology, Alder Process Inventions, Disposition Packages, Product Process, Product Inventions, Product Specification, and Work Output, and (other than and not including any of Fujifilm’s Confidential Information or Fujifilm Process Inventions) the material and information comprising, contained in or relating to any of the foregoing, shall be deemed Alder’s Confidential Information, regardless of whether marked or confirmed as confidential, and as to which Alder shall be deemed the disclosing Party.

b) Except as otherwise expressly permitted under this Agreement, Alder shall not disclose, without Fujifilm’s written permission, any proprietary, confidential and/or trade secret information of Fujifilm disclosed to, delivered to or obtained by Alder under this Agreement or the Prior Agreement (all of the foregoing, “Fujifilm’s Confidential Information”) unless: (i) such disclosure is to an Affiliate of Alder that is under an obligation of confidentiality and non-use and inventions to Alder no less burdensome than such obligations of Alder to Fujifilm and for whose actions Alder shall remain liable, and who has a need to know the Confidential Information to perform the applicable Program or otherwise as necessary to perform Alder’s obligations or exercise its rights under this Agreement; (ii) such information is or becomes publicly available through no fault of Alder and through no other breach of an obligation of confidentiality owed to Fujifilm or its Affiliate(s); (iii) such information is disclosed to Alder on a non-confidential basis by a third party entitled to disclose it and who did not acquire it directly or indirectly from Fujifilm; (iv) such information is already known to Alder on a non-confidential basis as shown by its prior written records, and was not acquired directly or indirectly from Fujifilm; or, (v) such disclosure is required by any law, rule, regulation, order decision, decree, subpoena or other legal process to be disclosed. If such disclosure is required by legal process, Alder will make all reasonable efforts to notify Fujifilm of this request promptly prior to any disclosure to permit Fujifilm to oppose such disclosure by appropriate legal action. Alder shall use reasonable precautions to protect the confidentiality of Fujifilm’s Confidential Information comparable to precautions taken to protect its own proprietary information including restricting access to such information to such of its employees as are bound to keep such information confidential and need to have such access for the purpose of this Agreement.

c) If a Party shall be obliged to provide testimony or records containing Confidential Information of the other in any legal or administrative proceeding, then the Party to whom the Confidential Information belongs shall reimburse the other Party for its [***]. This clause shall not apply to disputes between or among the Parties.

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d) For each of the Parties, “Confidential Information” shall mean and include without limitation such types of information as: inventions, methods, plans, processes, specifications, characteristics, raw data, analyses, equipment design, trade secrets, costs, marketing, sales, and performance information, including patents and patent applications, grant applications, notes, and memoranda, whether in writing or presented, stored or maintained electronically, magnetically or by other means, which are directly or indirectly disclosed to, delivered to or obtained by the recipient Party pursuant to this Agreement or the Prior Agreement, or of which a recipient Party may become aware of through the presence of its employees or agents at another Party’s offices or facilities. Each Party will use commercially reasonable efforts to identify to the others, orally or in writing, the confidential nature of its Confidential Information, and, if disclosed orally, to confirm the same in writing within [***] following the first disclosure of such Confidential Information to the receiving Party, but the failure to do so shall not relieve the Party receiving the information or materials of its obligation to protect the same where the cirucmstances of the disclosure and the nature of the information or materials othewise give the receiving Party reason to know of the confidential nature of such information or materials.

e) Each receiving Party agrees to use the other Party’s Confidential Information solely to perform its obligations and exercise its rights under this Agreement.

f) The receiving Party may disclose Confidential Information to or receive Confidential Information through its Affiliates, employees and agents who need to know the Confidential Information to perform the applicable Program or otherwise as necessary to perform obligations or exercise rights under this Agreement, provided that the receiving Party shall procure that prior to disclosure of Confidential Information each Affiliate, employee or agent to whom Confidential Information is to be disclosed is apprised of the confidential nature of the information or material, made aware of the confidentiality, non-use and inventions obligations contained in this Agreement, and agrees to be subject to and is bound by confidentiality, non-use and inventions obligations no less onerous than those contained in this Agreement. Any breaches of the obligations contained in this Agreement by such Affiliate(s), employee(s) or agent(s) shall be treated as a breach of such obligations by the receiving Party.

Section 8.

Work Output

a) All reports specified in the SoW and other cGMP documentation (“Work Output”) will be prepared using Fujifilm’s standard format(s) unless otherwise specified in the SoW.

b) Alder will be supplied with copies of Work Output generated as a result of the Program as set forth in the applicable SoW or Quality Agreement. All Work Output and agreed Product samples will be archived by Fujifilm for a period of [***] following completion of the Program unless otherwise defined by the Program or required by applicable U.S. and European laws or regulations. [***] after completion of the Program, Work Output and Product samples will be sent to Alder and a [***]. Alder may elect to have the materials retained in the Fujifilm archives for an additional period of time [***]. If Alder chooses to have Fujifilm dispose of Work Output and Product samples, [***]. Notwithstanding the foregoing, Fujifilm will continue to retain such written materials and Product samples as required

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by regulations and as may be required by law, pertaining to such activities as well as for archival purposes. All Work Output shall be owned by Alder and shall be its Confidential Information.

Section 9.

Inventions and Patents

a) Fujifilm on behalf of itself, its Affiliates and its subcontractors; and their respective employees and agents, hereby irrevocably assigns and shall assign, at no cost, to Alder:

(i) any invention or discovery that is a modification, addition, improvement, adaptation, enhancement, derivative, variant, or progeny to any Alder Technology or to a Product or to a use of a Product, in each of the foregoing cases that is not included within Alder Process Inventions, whether conceived, created, authored, or reduced to practice solely by one Party (or its Affiliate or subcontractor) and its employees or agents, or jointly by both Fujifilm (or its Affiliate or subcontractor) and Alder (or its Affiliate or subcontractor) and their respective employees or agents, whether or not patentable, arising as a result of performing a Program under this Agreement or through other use of or reference to Alder Technology or other Confidential Information of Alder (all of the foregoing, “Product Inventions”), and

(ii) any inventive manufacturing or analytical methods and processes, in each of the foregoing cases that are not included within Fujifilm Process Inventions, whether conceived, created, authored, or reduced to practice solely by one Party (or its Affiliate or subcontractor) and its employees or agents, or jointly by both Fujifilm (or its Affiliate or subcontractor) and Alder (or its Affiliate or subcontractor) and their respective employees or agents, whether or not patentable, arising as a result of performing a Program under this Agreement or though other use of or reference to Alder Technology or other Confidential Information of Alder (all of the foregoing, “Alder Process Inventions”).

Fujifilm shall promptly disclose to Alder all Product Inventions and Alder Process Inventions. At Alder’s request [***], Fujifilm will execute any and all applications, assignments or other instruments and give testimony which shall be necessary to apply for and obtain Letters of Patent of the US or of any foreign country with respect to Product Inventions and Alder Process Inventions, and perfect Alder’s title thereto, and Alder [***]. Fujifilm warrants that all Product Inventions and Alder Process-Inventions made in whole or in party by Fujifilm (or its Affiliate or subcontractor) and any employees (subject to any applicable law that protects employee inventors) or agents are [***]. With respect to Product Inventions and Alder Process Inventions assigned pursuant to this section, Alder hereby grants to Fujifilm a [***] license, to the extent necessary for Fujifilm to perform its obligations under this Agreement, for the [***] purpose of performing the applicable Program, for the term of this Agreement. The Alder Technology shall [***]. For the avoidance of doubt, “Alder Technology” shall not include, for purposes of this Agreement, any information that, at the time of disclosure to, delivery to or acquisition by Fujifilm, was either (i) in the public domain, or (ii) as shown by

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Fujifilm’s prior written records, was already known by Fujifilm on a non-confidential basis, and was not acquired directly or indirectly from Alder or conceived, created, authored, or reduced to practice by Fujifilm under this Agreement or the Prior Agreement, or (iii) subsequently enters the public domain through no fault of Fujifilm and through no other breach of an obligation of confidentiality owed to Alder or its Affiliate(s). Notwithstanding anything to the contrary in the immediately preceding sentence, information that is the subject of pending patent applications or issued patents of Alder or its Affiliates or their respective licensors shall not be deemed to be in the “public domain” by virtue thereof.

b) Fujifilm [***] to any invention or discovery, whether or not patentable, that meets all of the following conditions: (i) it relates to manufacturing or analytical methods and processes, (ii) it is conceived, created, authored, or reduced to practice [***] by Fujifilm and its employees or agents or jointly by both Fujifilm (or its Affiliate or subcontractor) and Alder (or its Affiliate or subcontractor) and their respective employees or agents in connection with the Program, (iii) is generally applicable to the development or manufacture of biological products, (iv) does not require the use of or reference to a Product or any element of the Alder Technology, and (v) when used, does not reveal or disclose any of Alder’s Confidential Information, Alder Technology, or Product(s) (all of the foregoing, “Fujifilm Process Inventions”). [***] Alder will execute any and all applications, assignments or other instruments and give testimony which shall be necessary to apply for and obtain Letters of Patent of the US or of any foreign country with respect to the Fujifilm Process Inventions and [***], and Fujifilm shall compensate Alder for the time devoted to such activities and reimburse it for [***]. Fujifilm hereby grants to Alder a [***] license [***] to [***] Products manufactured under this Agreement [***]. Pre-existing Fujifilm inventions and know-how shall remain the sole and exclusive property of Fujifilm, and shall be subject only to such licenses as may be expressly set forth in this Agreement.

c) The Parties intend that the Process shall be fully portable by Alder, [***]. If requested by Alder, Fujifilm shall [***] provide technology transfer services in support of the transfer to Alder (or its designee) of the Process for the Product and certain manufacturing technology and know-how related thereto (the “Technology Transfer”), such as (i) providing additional copies of pertinent information necessary to manufacture the Product and/or to support regulatory filings for the Product, including analytical testing methods, protocols, process descriptions, batch records, manufacturing documentation, raw data, and other process and manufacturing data and documentation; and (ii) providing Alder or its designee with access to Fujifilm employees with expertise in manufacturing to answer questions related to such Technology Transfer. The parties agree that this provision assumes that the Programs carried out for Alder will not involve the use of any Intellectual Property to which Fujifilm would normally grant access to under a commercial licence. in the event that a Program would require use of any such Intellectual Property, Fujifilm will notify Alder in advance and shall only use such Intellectual Property in a Program with Alder’s written consent. The Statement of Work applicable to such Program shall identify such Intellectual Property and shall prominently describe in the main body of the Statement of Work the agreed variations to this Section 9.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Section 10.

Independent Contractor

Fujifilm shall perform each Program as an independent contractor of Alder, and Fujifilm shall have complete and exclusive control over its facilities, equipment, employees and agents. The provisions of this Agreement shall not be construed to establish any form of partnership, agency or other joint venture of any kind between Fujifilm and Alder, nor to constitute either Party as the agent, employee or legal representative of the other. All persons furnished by either Party to accomplish the intent of this Agreement shall be considered solely as the furnishing Party’s employees or agents and the furnishing Party shall be solely responsible for compliance with all laws, rules and regulations involving, but not limited to, employment of labor, hours of labor, working conditions, workers’ compensation, payment of wages, and withholding and payment of applicable taxes, including, but not limited to income taxes, unemployment taxes, and social security taxes. No Party shall hold itself out to any third party as purporting to act on behalf of, or serving as the agent of, any other Party.

Section 11.

Insurance

a) Fujifilm shall secure and maintain in full force and effect throughout the performance of the Programs and through the date that is [***] after the expiration date of all Product manufactured under this Agreement, policies of insurance appropriate to the conduct of that Party’s business, including without limitation: (a) workmen’s compensation (or United Kingdom equivalent), (b) commercial general liability, (c) public and product liability, and contractual liability, in each case having policy limits, deductibles and other terms appropriate to the conduct of Fujifilm’s business [***].

b) Alder shall secure and maintain in full force and effect throughout the performance of the Programs and through the date that is [***] after the expiration date of all Product manufactured under this Agreement, policies of insurance appropriate to the conduct of that Party’s business, including without limitation: for (a) commercial general liability and (b) clinical trials/product liability, in each case having policy limits, deductibles and other terms appropriate to the conduct of Alder’s business [***].

Section 12.

Delivery and [***]

a) Delivery of all material manufactured for or purchased by Alder under this Agreement, including any quantity of Product manufactured during a Program or Process Consumables purchased by Alder under an SoW, will be made Ex Works, the Facility (Incoterms 2010), when Fujifilm notifies Alder that such material is available for collection and places Product at the disposal of Alder at the Facility, or, in the case of any Batch produced during a manufacturing stage of a Program, either [***] following notification by Fujifilm that Fujifilm has completed Disposition in respect of such Batch and has made such material available for collection, or [***], whichever occurs first. Unless otherwise agreed by the Parties, Fujifilm shall deliver a Certificate of Analysis, if applicable, not later than the date of delivery. Fujifilm shall package and label Product for delivery in accordance with the Product Specification, standard operating procedures and all applicable Legal Requirements. Risk in and title to all material manufactured for or purchased by Alder under this Agreement [***]. Fujifilm will co-operate with Alder’s chosen shipper/supplier with regard to achieving timely and efficient transport matters.

b) Alder shall have the option, [***], to request that Fujifilm [***], and may also request that, [***], Fujifilm [***], in each case [***]. In the absence of exercise of such option and agreement on the terms of such [***], Fujifilm shall not be obliged to [***]. Prior to completion of the applicable Program, Alder shall notify Fujifilm which [***], and, if

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Alder does not notify Fujifilm [***], then Fujifilm shall request instructions from Alder and shall, in accordance with such instructions, [***]. Nothing in this paragraph shall be construed in derogation of Fujifilm’s obligations with respect to [***].

c) Fujifilm shall provide reasonable assistance to Alder as may be necessary for complying with import, export, and customs laws, regulations and like requirements, as applicable to the shipment of Product, the cell banks, and samples (including in-process samples) of the Product, etc., including issuing any documentation that may be required to be issued by Fujifilm by law or regulation. Without limitation, Fujifilm and Alder will cooperate and provide such assistance to each other as may be reasonably necessary to permit the export of Product from England into other countries, and Fujifilm shall provide reasonable assistance to Alder as may be necessary for obtaining permits from the United States Department of Agriculture for the shipment of Product from England to the USA for toxicology studies. Alder shall be responsible [***].

Section 13.

Default/Limitation of Warranty

a) If Fujifilm is in default of any material obligation under this Agreement or a Statement of Work, then Alder shall promptly notify Fujifilm in writing of any such default. Fujifilm shall have a period of [***] from the date of receipt of such notice within which to cure such default (if such breach is capable of remedy and provided that Fujifilm has commenced a cure within the [***] period and is diligently pursuing efforts to cure such breach); provided that if Fujifilm falls to cure such breach within the specified cure period, this Agreement or Statement of Work, as applicable, may, at Alder’s option, immediately terminate. For clarity, the Parties agree that if Alder exercises its right to terminate this Agreement under this clause, the termination will be effective with respect to both of the Fujifilm Parties.

b) If Alder is in default of any material obligation under this Agreement or a Statement of Work, Fujifilm shall promptly notify Alder in writing of any such default. Alder shall have a period of [***] from the date of receipt of such notice within which to cure such default (if such breach is capable of remedy and provided that Alder has commenced a cure within the [***] period and is diligently pursuing efforts to cure such breach); provided that if Alder fails to cure such breath within the specified cure period, this Agreement or Statement of Work, as applicable, may, at Fujifilm’s option, immediately terminate.

c) Subject to Section 13(e) and the last sentence of this paragraph, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING IN CONNECTION WITH THE DEFAULT OR BREACH OF ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT, THE STATEMENT OF WORK OR ANY DOCUMENTS OR APPENDICES RELATED

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

THERETO. Subject to Section 13(e) and the last sentence of this paragraph, [***]. This Section 13(c) shall not limit Fujifilm’s obligations under Section 1(g) or Section 3(e).

d) THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, AND, EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, INCLUDING THE WARRANTIES IF ANY THAT MAY BE SET FORTH IN THE STATEMENTS OF WORK, (I) NEITHER PARTY PROVIDES TO THE OTHER PARTY HERETO ANY WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATERIALS AND SERVICES PROVIDED HEREUNDER, (II) ALL SUCH WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE WAIVED AND (III) FUJIFILM MAKES NO WARRANTIES THAT THE EXECUTION OF THE SOW WILL RESULT IN ANY SPECIFIC QUANTITY OR QUALITY OF PRODUCT OR THAT FUJIFILM WILL HAVE AVAILABLE CAPACITY FOR FUTURE PRODUCTION OF PRODUCT.

e) The limitations of liability and disclaimers in Section 13(c) and Section 13(d) shall [***].

Section 14.

Dispute Resolution

a) In the event any dispute shall arise between Alder and Fujifilm with respect to any of the terms and conditions of this Agreement or a Program, then senior executives of Alder and Fujifilm shall meet as promptly as practicable after notice of such dispute to resolve in good faith such dispute.

b) If Alder and Fujifilm are unable to satisfactorily resolve the dispute within [***] following referral to the senior executives, then either Party may request that the dispute be [***] arbitrator in accordance with this Section 14. The arbitration will be [***], and except as noted below, shall be conducted [***] by a neutral arbitrator possessing demonstrated qualifications in a field relevant to the dispute who is agreeable to both Parties. If the Parties do not agree on an arbitrator [***], [***] shall appoint an arbitrator to hear the case [***]. The arbitrator shall [***] or to [***] and shall [***]. The Parties intend that any arbitration proceedings [***], and the Parties [***], any information submitted during the arbitration, any documents submitted in connection with it, any oral submissions or testimony, transcripts, or any award [***]. No Party shall be precluded from seeking preliminary, provisional, interim or conservatory measure or taking such interim formal steps as may be considered necessary to protect such Party’s position at any time either before or after the tribunal has been appointed or while the procedures referred to in this Section are pursued.

c) Any decision by the arbitrator shall be [***] and may be entered [***] in any court having jurisdiction. The cost of any arbitration proceeding shall be [***]. The arbitrator shall render his final decision in writing to the Parties.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Section 15.

Limitation and Indemnification

15.1 Indemnification by Fujifilm. Subject to and except to the extent of any indemnification from Alder pursuant to Section 15.2 below, Fujifilm shall defend, indemnify and hold harmless each of Alder and its Affiliates and their respective directors, officers, employees and agents and the successors and assigns of any of the foregoing (all of the foregoing, the “Alder Indemnitees”) from and against all claims made or lawsuits brought by a third party, [***] (collectively “Claims and Losses”), to the extent such Claims and Losses arise out of: (a) breach of this Agreement by Fujifilm or any other Fujifilm Indemnitee, (b) the negligent or more culpable acts or omissions of Fujifilm or any other Fujifilm Indemnitee, or (c) any claims alleging that Alder’s use of Fujifilm Intellectual Property for permitted purposes in the performance of a Program under and in accordance with this Agreement (excluding use thereof in combination with Alder Intellectual Property for permitted purposes under and in accordance with this Agreement, if there would have been no infringement absent the combination) infringes any valid Intellectual Property rights vested in a third party.

15.2 Indemnification by Alder. Subject to and except to the extent of any indemnification from Fujifilm pursuant to Section 15.1 above, Alder shall defend, indemnify and hold harmless each of Fujifilm and its Affiliates and subcontractors and the respective directors, officers, employees and agents and the successors and assigns of any of the foregoing (all of the foregoing, the “Fujifilm Indemnitees”) from and against all Claims and Losses to the extent such Claims and Losses arise out of: (a) breach of this Agreement by Alder or any other Alder Indemnitee, (b) the negligent or more culpable acts or omissions of Alder or any other Alder Indemnitee; (c) any claims alleging Fujifilm’s use of the Alder Intellectual Property for permitted purposes in the performance of a Program under and in accordance with this Agreement (excluding use thereof in combination with Fujifilm Intellectual Property for permitted purposes under and in accordance with this Agreement, if there would have been no infringement absent the combination) infringes any valid Intellectual Property rights vested in any third party, or (d) [***]; or (e) use or operation of the Process (or part of the Process) by or on behalf of Alder (other than use or operation by Fujifilm or any other Fujifilm Indemnitee).

15.3 Indemnification Procedure. If a Fujifilm Indemnitee or Alder Indemnitee (the “Indemnitee”) intends to claim indemnification under Section 15.1 or Section 15.2 (as applicable), it shall promptly notify the other Party (the “Indemnitor”) in writing of such alleged liability. The Indemnitor shall have the right to full control of the defense and settlement thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee; provided, however, that any Indemnitee shall have the right to retain its own counsel at its own expense, for any reason, including if representation of any Indemnitee by the counsel retained by the Indemnitor would be

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

inappropriate due to actual or potential differing interests between such Indemnitee and any other Party reasonably represented by such counsel in such proceeding. The Indemnitee, its employees and agents, shall cooperate fully with the Indemnitor and its legal representatives in the investigation, defense and settlement of any liability covered by Section 15.1/15.2, provided that no settlement shall include an admission of fault, liability or a financial obligation on the part of the Indemnified parties without their prior written consent, which consent shall not be withheld or delayed unreasonably. The obligations of the Indemnitor to the Indemnitee under Section 15.1/15.2 are expressly conditioned on the following: (a) that the Indemnified parties do not make any admission in respect of such claim or suit or take any action prejudicial to the defense of such claim or suit without the prior written consent of the Indemnitor, which shall not be unreasonably withheld (provided that this condition shall not be treated as breached by any statement properly made by any Party in connection with the operation of its internal complaint procedures, accident reporting procedures or disciplinary procedures, or where such a statement is required by law); and (b) that the indemnified parties do not enter into any settlement or resolution of such claim or suit or part thereof without the prior written consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The obligations of the Indemnitor to the Indemnitee under Section 15.1/15.2 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, shall, to the extent prejudicial to its ability and rights to defend or settle such action, relieve the Indemnitor of any obligation to the Indemnitee under Section 15.1/15.2. It is understood that only Fujifilm and Alder may claim indemnity under Section 15.1/15.2 (on its own behalf or on behalf of its Indemnitees), and other Indemnitees may not directly claim indemnity hereunder.

Section 16.

Representations and Warranties

a) Each Party represents and warrants to the others that it has the full right and authority to enter into this Agreement and to perform in accordance with the terms and conditions set forth herein. Each Party represents and warrants to the others that neither it nor any of its officers, directors, or its employees performing services under this Agreement [***].

b) Each Party represents and warrants to the others that it has obtained and will at all times during the term of this Agreement, hold and comply with all licenses, permits and authorizations necessary to perform this Agreement as now or hereafter required under any applicable statutes, laws, ordinances, rules and regulations of the United States and any applicable foreign, state, and local governments and governmental entities.

c) Alder hereby represents and warrants to Fujifilm that it has legal title and/or a valid license to the Alder Technology as it considers necessary to conduct the Programs and [***] the use of its intellectual property, including Alder Technology, in the performance of the Programs, as presently contemplated and in accordance with the terms of this Agreement, will not violate or infringe on the patents, trademarks, trade names, service marks or copyrights of any other party.

d) Fujifilm’s represents that, (i) [***] the use of its intellectual property in the performance of the Programs, as presently contemplated and in accordance with the terms of this Agreement, will not violate or infringe on the patents, trademarks, trade names, service marks or copyrights of any other party and

(ii) it will [***] ensure that no process modification made pursuant to this Agreement will violate or infringe on the patents, trademarks, trade names, service marks or copyrights of any other party.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Section 17.

Force Majeure

No Party shall be in breach of this Agreement for any failure to perform its respective obligations under this Agreement if its performance is delayed or prevented by any event beyond such Party’s reasonable control and without the fault or negligence of such Party, which may include, without limitation, acts of God, fire, explosion, weather, disease, war, insurrection, civil strife, riots, government action, acts of terrorism or power failure, provided that such performance shall be excused only to the extent of and during such disability. Force majeure shall not include failure of any Product or drug product in clinical trials or failure of any Product or drug product to gain regulatory approval. The Party subject to such event shall promptly notify the other Party of the occurrence thereof and, if known, the expected duration. Any time specified or estimated for completion of performance in the applicable SoW falling due during or subsequent to the occurrence of any or such events shall be automatically extended for a period of time to recover from such disability. Fujifilm will promptly notify Alder if, by reason of any of the events referred to herein, Fujifilm is unable to meet any such time for performance specified or estimated in the applicable SoW. If any part of a Program is invalid as a result of such disability, Fujifilm will, upon written request from Alder, but at Fujifilm’s sole cost and expense, repeat that part of the Program affected by the disability. Without prejudice to and in addition to any other rights of termination under this Agreement, the non-affected Party may terminate this Agreement or the applicable SoW to the extent that such event continues or will continue for a period of at least [***]. Termination of an SoW or this Agreement as a result of a force majeure event shall take effect as if the SoW or Agreement were terminated under Section 20(b) save that no Cancellation Fee shall be payable.

Section 18.

Allocation of Resources

If delays in the agreed commencement or performance of a Program occur because of Alder’s request for a delay or its inability to supply Fujifilm by the deadline set forth in the applicable Statement of Work with agreed Alder Deliverables or any information required to begin or perform the Program, and the delay continues for [***] or more, and Fujifilm wishes to reallocate resources being held for performance of the Program, it shall advise Alder accordingly. In such event, unless Alder is willing to pay a reasonable amount to Fujifilm to compensate for further delay, Fujifilm may reallocate such resources without incurring liability to Alder, and Fujifilm shall be relieved of its obligation to perform the Program as set forth in the SoW, except that upon such delay being removed or remedied, Fujifilm will [***] allocate resources to performance of the Program as set forth in the SoW. Except as expressly set forth in this Agreement, no such delay shall give rise to a right of action or remedy to Fujifilm.

Section 19.

Use of Names

No Party may issue any press releases or other announcements or other form of publicity relating to this Agreement or the activities contemplated hereby or any ancillary matter without the prior written consent of the other Parties. Without limitation, no Party shall use the name of the other Party or the names of the employees of the other Party in any advertising or sales promotional material or in any publication without prior written permission of such Party. No Party shall disclose to any third party the contents of the Agreement without the prior written consent of the other Party. Notwithstanding the foregoing to the contrary, each Party shall be entitled to make disclosures as required in connection with regulatory filings, patent filings, or as may otherwise be required by law, rule or regulation.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Section 20.

Term/Termination

a) This Agreement shall take effect on the Effective Date first written above and continue in effect until the earlier of completion of the Programs as acknowledged by the Parties, or termination.

b) In addition to the termination rights set forth in Section 13 and Section 17, Alder may at any time terminate a Statement of Work or this Agreement prior to completion of the Programs by giving not less than [***] written notice to Fujifilm. In the event Alder elects to terminate a Statement of Work or this Agreement for convenience under this Section 20(b), or in the event that Fujifilm terminates a Statement of Work or this Agreement pursuant to Section 13, Alder shall pay Fujifilm [***] following receipt of Fujifilm’s invoice, the following amounts:

(i) [***]; plus

(ii) All unpaid costs incurred or committed for non-cancellable Process Consumables, which shall become Alder property; plus

(iii) The applicable Cancellation Fee, if any.

c) The termination or expiration of this Agreement for any reason shall not prejudice the acquired rights of any Party under this Agreement, or relieve any Party of its obligation to the other(s) under this Agreement, including in respect of: (i) confidentiality and non-use; (ii) consents for advertising purposes and publications; (ill) indemnification; (iv) inventions and patents; (v) compensation for services previously performed; and (vi) dispute resolution. The provisions of Section 1(g), Section 1(h), Section 3(e), Section 4(c), Section 5, Section 7, Section 8(b), Section 9, Section 11, Section 13(c), Section 13(d), Section 13(e), Section 14, Section 15, Section 19, Section 20 and Section 25 shall survive indefinitely the expiration or termination of this Agreement, as will any other provision that by its intent or meaning should have validity beyond the expiration or termination of this Agreement.

d) The termination of this Agreement shall automatically and without further action cause the termination of all Programs and Statements of Work.

e) Upon the expiration or termination of the Agreement for whatever reason: (1) Fujifilm shall cease all use of and, as directed by Alder, dispose of or return to Alder all information, materials and property of Alder, and any materials therefrom, and, upon request, shall certify to the foregoing; and Fujifilm shall refund within [***] of the effective date of such expiration or termination all amounts, if any, paid to Fujifilm in excess of amounts owed to Fujifilm under this Agreement and (2) Alder shall cease all use of and, as directed by Fujifilm, dispose of or return to Alder all information, materials and property of Fujifilm, and, upon request, shall certify to the foregoing; and Alder shall pay to Fujifilm within [***] of the effective date of such expiration or termination all amounts, if any, owed to Fujifilm under this Agreement, including, for the avoidance of doubt, any amounts payable to Fujifilm on termination under this Section 20.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Section 21.

Assignment

This Agreement shall not be assigned in whole or in part by any Party without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed. Any attempt to assign this Agreement without such consent shall be void and of no effect. Notwithstanding the foregoing, Alder, FDBK or FDBU shall be entitled, without the prior written consent of any other Party, to assign all or a part of its rights under this Agreement to a purchaser of all or substantially all of its assets, and Alder may assign this Agreement without consent to a third party who has entered into a strategic collaboration agreement or similar agreement with Alder for the development and commercialization of a Product, provided that the assignee agrees in writing to assume all obligations undertaken by its assignor in this Agreement. No assignment shall relieve the assigning Party of responsibility for the performance of any of its obligations hereunder. The terms of this Agreement shall inure to the benefit of successors and assigns.

Section 22.

Notice

All notices to be given as required in this Agreement shall be in writing and shall be delivered personally, or mailed by a reputable overnight carrier, postage prepaid, to the Parties at the addresses respectively set forth below or such other addresses as the Parties may respectively designate in writing. Such notice shall be effective on the date received.

If to Alder:

Mark Litton, Ph.D.

Chief Business Officer

Alder Biopharmaceuticals Inc.

11804 North Creek Parkway South

Bothell WA 98011 USA

P: +1-425-205-2900

F: +1-425-205-2901

with a copy to:

Sonya F. Erickson

Cooley LLP

1700 Seventh Avenue, Suite 1900

Seattle WA 98101 USA

P: +1-206-452-8700

F: +1-206-452-8800

If to Fujifilm:

President FUJIFILM Diosynth Biotechnologies U.S.A., Inc. 101 J. Morris Commons Lane Morrisville, NC 27560 P: +1-919-337-4404 F: +1-919-337-0899	Managing Director FUJIFILM Diosynth Biotechnologies UK Limited Belasis Avenue, Billingham TS23 1LH, United Kingdom F: (+44)(0)1642 364463
With copies to: General Counsel FUJIFILM Diosynth Biotechnologies Belasis Avenue Billingham, Cleveland, TS 23 1LH, UK Facsimile No.: +44 1642 364463

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

General Counsel

FUJIFILM Holdings America Corporation

200 Summit Lake Drive

Valhalla, New York 10595-1356

F: +1-914-789-8514

Section 23.

Choice of Law

This Agreement shall be construed and enforced in accordance with the laws of the [***] except that its choice of law rules shall not be invoked for the purpose of applying the law of another jurisdiction.

Section 24.

Waiver/Severability

No waiver of any provision of this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or be construed as a further or continuing waiver of any such provision, or of any other provision or condition of this Agreement. If any provisions hereof shall be determined to be invalid or unenforceable, the validity and effect of the other provisions of this Agreement shall not be affected thereby.

Section 25.

Nonsolicitation

For the term of this Agreement [***] neither Alder nor Fujifilm shall, directly, solicit, or attempt to solicit on behalf of Alder or Fujifilm, as the case may be, any employees of the other who were directly involved in the Programs, unless otherwise approved by the other Party. The foregoing shall not preclude a Party from soliciting or hiring a person responding to a job posting, notice or general advertising for a position.

Section 26.

Entire Agreement; Modification/Counterparts

a) This instrument including the attached Appendices sets forth the entire agreement between the Parties hereto with respect to the performance of the Programs by Fujifilm for Alder and as such, supersedes all prior and contemporaneous negotiations, agreements, representations, understandings, and commitments with respect thereto and shall take precedence over all terms, conditions and provisions on any purchase order form or form of order acknowledgment or other document purporting to address the same subject matter. This Agreement shall not be changed or modified in any manner except by an instrument signed by the duly authorized officers of each of the Parties hereto, which instrument shall make specific reference to this Agreement and shall express the plan or intention to modify same. For the avoidance of doubt, this Agreement neither affects, replaces nor supersedes the Prior BSA or the Prior QA, the terms of which shall remain in fun force and effect as set forth therein in relation to activities, rights, liabilities and obligations of each party thereunder.

b) This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

c) This Agreement becomes effective and binding on all Parties on and as of the last date that the Parties hereto have executed this Agreement.

[signatures on following page]

25

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Alder BioPharmaceuticals, Inc.		FUJIFILM Diosynth Biotechnologies U.S.A., Inc.
By:	/s/ Mark J. Litton	By:	/s/ Henrik Edeback
Name:	Mark J. Litton	Name:	Henrik Edeback
Title:	CBO	Title:	VP Finance
Date:	10/16/13	Date:	Oct 16, 2013
		FUJIFILM Diosynth Biotechnologies U.S.A., Inc.
		By:	/s/ Stephen A. Spearman
		Name:	Stephen A. Spearman
		Title:	President
		Date:	16 October 2013
		FUJIFILM Diosynth Biotechnologies UK Limited
		By:	/s/ Stephen C. Tayler
		Name:	Stephen C. Tayler
		Title:	VP Commercial
		Date:	16 October 2013

26

EX-10.11

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

EXHIBIT 10.11

EXHIBIT B

LICENSE AGREEMENT

This AGREEMENT is made and entered into this 15^th of October, 2004 (“Effective Date”) by and between the Keck Graduate Institute of Applied Life Sciences, a corporation duly organized and existing under the laws of the State of California, having a principal place of business at 535 Watson Drive, Claremont, CA 91711 (hereinafter “KGI”) and Alder BioPharmaceutical, Inc., a Delaware corporation, having a principal place of business at 4750 Carillon Point, Kirkland, WA 98033, (hereinafter called “LICENSEE”).

WHEREAS, KGI and LICENSEE entered into that certain Option Agreement dated November 18, 2002; and

WHEREAS, LICENSEE has duly and timely exercised its option pursuant to said Option Agreement and KGI has agreed, pursuant to the Option Agreement, to enter into this License Agreement concerning certain inventions specified in the attached Exhibit A (“Licensed Inventions”) resulting from the Research Program described in the attached Exhibit B;

ACCORDINGLY, the parties agree as follows:

1. DEFINITIONS.

“Antibody” means a [***] antibody, whether multiple or single chain, recombinant or naturally occurring or a combination of the foregoing, whole or fragment, monospecific or bispecific, and any analogs, constructs, conjugates, fusions or chemical modifications and other attachments thereof.

“Field” means the production and optimization of Antibodies in yeast.

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

“Licensed Inventions” are the inventions specified on Exhibit A, attached hereto.

“Licensed Patents” are all patents and patent applications claiming the Licensed Inventions, including those listed on Exhibit A, and all provisionals, divisionals, substitutions, continuations and continuations-in-part, and reissues, re-examinations, and extensions of the preceding, patents issuing on each of the preceding, and all foreign counterparts of each of the preceding.

“Licensed Products” are products covered by a valid issued claim of a Licensed Patent or a claim of a pending patent application in the country in which such Licensed Product is sold, or products made using a process covered by a valid issued claim of a Licensed Patent or a claim of a pending patent application in the country in which such Licensed Product is sold.

“Licensed Services” are services covered by a valid issued claim of a Licensed Patent or a claim of a pending patent application in the country in which such Licensed Services are sold, or services rendered using a process covered by a valid issued claim of a Licensed Patent or a claim of a pending patent application in the country in which such Licensed Services are sold.

“Qualified Financing” shall mean the gross proceeds to LICENSEE from equity or debt financing or research contracts or grants, in a single or series of transactions, in an aggregate amount not less than [***] dollars ($[***]).

“Research Program” is as described in the attached Exhibit B.

“Technology” consists of all proprietary information, know-how, procedures, methods, prototypes, designs, technical data, reports and data owned or controlled by KGI as of the Effective Date of this Agreement that is necessary or useful in the development of Licensed Products or Licensed Services.

-2-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

2. LICENSE GRANT.

Subject to the terms and conditions of this Agreement, KGI hereby grants to LICENSEE a worldwide, exclusive license, with the right to sublicense, under the Licensed Patents, to make, have made, import, use, sell and otherwise distribute Licensed Products and Licensed Services for all research and commercial applications (the “License”). KGI additionally grants to LICENSEE a worldwide, exclusive license, with the right to sublicense, to the Technology in the Field. Subject to Article 6 herein, KGI retains and reserves the [***] right [***] to practice [***]. KGI further retains and reserves the [***] right [***] to practice the (i) Licensed Patents and (ii) Technology within the Field solely for noncommercial educational, research, [***] and publishing purposes.

3. COMMERCIALIZATION.

LICENSEE will use commercially reasonable efforts to bring the Licensed Products and Licensed Services to market through a thorough, diligent program for exploitation of the Licensed Products and Licensed Services, subject to market, competition and financial considerations. For purposes of this requirement, efforts of LICENSEE’s sublicensees shall be considered efforts of LICENSEE.

4. TERM AND TERMINATION.

a. This Agreement shall terminate on a country-by-country basis upon the expiration of the last to expire Licensed Patent in such country. LICENSEE shall have the right to terminate the Agreement with respect to any Licensed Patent or [***], on thirty (30) days written notice.

b. This Agreement can be terminated by either party for material breach by the other party of any obligation arising hereunder, by giving ninety (90) days prior written notice to the other party specifying the cause for the termination; provided, however, that

-3-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

if the breach is cured within the ninety (90) day period, the notice shall be withdrawn and shall be of no effect. Upon a material breach by KGI that is not cured within the applicable period, LICENSEE shall retain [***] to the [***] and [***].

c. Upon a breach of this Agreement by LICENSEE that results in termination of this Agreement, all sublicenses granted by LICENSEE under this Agreement shall automatically convert to direct licenses between KGI and the respective Sublicensee.

5. PAYMENTS.

a. Equity. Upon execution of this Agreement, LICENSEE shall issue to KGI shares of its Common Stock representing [***] of the [***]. For purposes of this Agreement, “[***]” shall mean [***] and [***] prior to the Qualified Financing [***]. Such shares shall be issued pursuant to a Common Stock Purchase Agreement on terms mutually agreeable to KGI and LICENSEE.

b. [***] License Fee. LICENSEE shall pay KGI a [***] license fee of [***] dollars ($[***]) commencing on the [***] of the Effective Date and [***] thereafter during the term of the Agreement.

c. [***] Fees. LICENSEE agrees to reimburse KGI for the services described in Exhibit B and performed under the Research Program in amounts equal to [***]

-4-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

[***] and to make payment of such reimbursements on or before the later of (i) [***] following receipt of an invoice from KGI [***] or (ii) [***] following the closing of a Qualified Financing.

6. CONFIDENTIALITY.

a. “LICENSEE Confidential Information” shall mean the Technology within the Field, unpublished Licensed patents and information provided by LICENSEE that is designated as confidential by LICENSEE. “KGI Confidential Information” shall mean any information provided by KGI (including the Technology outside the Field) that is designated confidential by KGI. For a period of [***] from the date of disclosure, each party (a) shall treat as confidential all Confidential Information of the other party, (b) shall not use such Confidential Information except as expressly permitted under the terms of this Agreement or otherwise authorized in writing by the other party, (c) shall implement reasonable procedures to prohibit the disclosure, unauthorized duplication, misuse or removal of such Confidential Information and (d) shall not disclose the other’s Confidential Information to any third party. Without limiting the foregoing, each of the parties shall use at least the same procedures and degree of care to prevent the disclosure of Confidential Information as it uses to prevent the disclosure of its own confidential information of like importance.

b. Notwithstanding the above, neither party shall have liability to the other with regard to any Confidential Information of the other party that: (i) was generally known and available to the public at the time it was disclosed, or becomes generally known and available to the public through no fault of the receiving party; (ii) was known to the receiver at the time of disclosure as shown by the receiving party’s written records in existence at the time of disclosure; (iii) is disclosed by the receiving party with the prior written approval of the party providing the Confidential Information; (iv) becomes known to the receiving party from a source other than the disclosing party without breach

-5-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

of this Agreement by the receiving party and in a manner that is otherwise not in violation of the disclosing party’s rights; (v) is disclosed as required by law, including without limitation any securities law, patent laws or pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, that the receiving party shall provide reasonable advance notice to enable the disclosing party to seek a protective order or otherwise prevent such disclosure; or (vi) is disclosed as required by law or regulation in obtaining approval to import, distribute or use Licensed Products, Licensed Services or Technology in the manner authorized under this Agreement.

c. Nothing in this Agreement shall be construed as prohibiting either party from teaching, presenting, demonstrating or publishing any of the results of their own research on the Licensed Inventions, including without limitation research results which constitute Confidential Information; provided, however, each party agrees to provide the other party with a copy of any proposed publication of Confidential Information at least [***] prior to submission to the publisher or such time (not to exceed [***]) as is sufficient to allow the steps necessary to protect intellectual property, including the filing of any patent applications. The right of publication set forth herein shall not extend to any subject matter developed exclusively by LICENSEE and provided to KGI designated as confidential.

7. PATENT RIGHTS.

a. Patent Prosecution and Maintenance. From and after the date of this Agreement, the provisions of this Section 7a shall control the prosecution and maintenance of any patent included within Licensed Patents. During the term of this Agreement, [***] shall direct and control at [***]: (i) the preparation, filing and prosecution of the United States and foreign patent applications within the Licensed

-6-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Patents (including any interferences and foreign oppositions) and (ii) maintain the patents issuing therefrom. [***]. In the event that LICENSEE declines to seek patent protection on any Licensed Invention, [***] or [***], [***] shall give [***] notice thereof at least [***] prior to the date on which [***] is required by law to make a filing in order to preserve rights to patent protection in such country, and [***].

b. Prosecution and Defense of Infringements. [***] shall have the [***] to prosecute any and all infringements of any Licensed Patents and shall have the [***] to defend all charges of infringement arising as a result of [***], its Affiliates or sublicensees, unless otherwise agreed to between [***] and [***]. If [***] fails to resolve such infringement claims or initiate a lawsuit within [***] of its receipt of notice of such infringement or claim of infringement, [***], to prosecute such infringement or defend against such claims. [***] may enter into settlements, stipulated judgments or other arrangements respecting such infringement, [***].[***] shall hold [***] harmless from any costs, expenses or liability respecting all such infringements or charges of infringement that [***]. KGI and LICENSEE each agree to provide reasonable assistance that the party undertaking an action under this Section may require in the litigation, provided that the party providing such assistance to the other shall be [***]. Any damages or other recovery from an action undertaken by LICENSEE or KGI pursuant to this Section shall be allocated [***], and the balance will be allocated among the parties [***].

-7-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

8. INDEMNIFICATION, INSURANCE, LIMITATION OF LIABILITY.

a. Indemnification. LICENSEE agrees to indemnify and hold harmless KGI and all its directors, officers and employees (collectively, the “Indemnitees”) from and against any and all claims, demands and actions, and resulting liabilities, judgments, costs and expenses arising out of or related in any way to LICENSEE’s exercise of its right to use, make, have made, import, offer for sale or sell the Licensed Products, Licensed Services or Technology; provided that KGI promptly notifies LICENSEE of any such claims of which it has knowledge and fully cooperates with LICENSEE and its legal representatives in the investigation and defense of any action, claim or liability covered by this indemnification. The foregoing indemnity shall not apply to the extent any such liability is attributable to the sole negligence or willful misconduct of KGI.

b. Insurance. At such time as LICENSEE or its sublicensees begin to sell or distribute Licensed Products or Licensed Services, LICENSEE shall, at its sole expense, procure and maintain insurance policies, [***] with commercially reasonable scope and coverage terms. Such insurance shall specifically designate KGI as an additional insured. LICENSEE shall provide KGI with a certificate of such insurance, issued by the insurer and shall maintain the insurance and provide certificates for each subsequent policy period. LICENSEE shall provide KGI with notice at least [***] prior to any cancellation, non-renewal or material change in such insurance.

c. Limitation of Liability. IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES SUFFERED BY THE OTHER PARTY ARISING IN ANY WAY OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, INCLUDING WITHOUT LIMITATION ANY ACT OF FAILURE TO ACT OF ANY NATURE BY EITHER PARTY. THIS LIMITATION WILL APPLY EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

-8-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

9. MISCELLANEOUS.

a. Governing Law; Dispute Resolution. This Agreement and any dispute arising out of or in connection herewith shall be governed by the laws of the State of California, without reference to conflicts of laws principles. Any dispute or claim arising out of or in connection with this Agreement shall be resolved as follows: (a) for a period of [***] after a dispute arises the respective appropriate officers of the parties shall negotiate in good faith in an effort to resolve the dispute; and (b) if the dispute has not been resolved at the close of such [***] period, the matter will be [***]. [***] may be entered in any court having jurisdiction over the parties. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief without breach of this arbitration provision.

b. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given for all purposes hereof if mailed by first class certified or registered mail, postage prepaid, or sent via overnight delivery service (e.g., FedEx, DHL) addressed to the party to be notified at its address shown above or such other address as may have been furnished in writing to the notifying party.

c. Warranty. KGI warrants that it (i) is the sole and exclusive owner or co-owner of all right, title and interest in the Licensed Inventions and Licensed Patents; (ii) has the right to enter into this Agreement and (iii) has not previously granted and during the term of this Agreement will not grant to any third party any rights inconsistent with

-9-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

the rights granted herein. To the best of KGI’s actual knowledge, the Licensed Inventions do not infringe or conflict with any patent or other proprietary right of any third party and there is no claim or basis therefore that might limit the use of the Licensed Inventions as provided in the license grant to LICENSEE herein.

d. Assignment. This Agreement may [***].

e. Waiver. Failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of such rights nor shall a waiver by either party in one or more instances by construed as constituting a continuing waiver or as a waiver in other instances.

f. Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all written and oral prior agreements and understandings with respect thereto. This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by both parties.

g. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be deemed the same agreement.

h. Severability. If any provision of this Agreement is finally held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first written above.

KECK GRADUATE INSTITUTE OF APPLIED LIFE SCIENCES		ALDER BIOPHARMACEUTICAL, INC.
By:	/s/ Sheldon M. Schuster	By:	/s/ Randall C. Schatzman
	Sheldon M. Schuster President		Randall C. Schatzman President

-11-

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

EXHIBIT A

List of all Licensed Inventions and Licensed Patents under this Agreement:

Licensed Patents:

A) METHODS OF SYNTHESIZING HETEROMULTIMERIC POLYPEPTIDES IN YEAST USING A HAPLOID MATING STRATEGY (provisional patent filed October 22, 2004)

Inventors: Randal Schatzman, Mark Litton, John Latham, Ilya Tolstorukov and James M. Cregg

Description: Methods are provided for the sythesis and secretion of recombinant hetero-multimeric proteins in mating competent yeast. A first expression vector is transformed into a first haploid cell; and a second expression vector is transformed into a second haploid cell. The transformed halpod cells, each individually synthesizing a non-identical polypeptide, are identified and then genetically crossed or fused. The resulting diploid strains are utlized to produce and secrete fully assembled and biologically funcional hetero-multimeric protein.

B) [***].

EX-10.12

EXHIBIT 10.12

EARLY ENTRY AGREEMENT

Reference is made to that Lease dated August 5, 2005 between RREEF AMERICA REIT II CORP. KK, a Maryland corporation (“Landlord”) and ALDER BIOPHARMACEUTICALS, a Delaware corporation (“Tenant”), for the lease of certain Premises located in the City of Bothell, County of King, State of Washington, in the building commonly known as North Creek Parkway Center, Building 6, 11804 North Creek Parkway, Bothell, WA 98011 and situated on the land legally described therein (“Lease”).

It is hereby agreed that, notwithstanding anything to the contrary contained in the Lease, upon full execution of the Lease and Landlord’s receipt of Tenant’s insurance certificates evidencing Tenant’s insurance policies required by Section 11 of the Lease, Tenant’s qualified vendors, who shall be approved in advance by Landlord, may enter onto the Premises to perform the tenant improvements described in Part I of Exhibit B to the Lease, or such other alterations, additions, or improvements as are consented to by Landlord in accordance with Section 6 of the Lease, in preparation for Tenant’s occupancy as of the Commencement Date. Tenant shall not otherwise use or occupy the Premises for the conduct of its business until the Commencement Date. The first Monthly Installment of Rent is due on February 1, 2006.

Landlord and Tenant agree that all the terms and conditions of the above referenced Lease are in full force and effect as of the date Tenant’s qualified vendors first enter onto the Premises.

LANDLORD:		TENANT:
RREEF AMERICA REIT II CORP. KK,		ALDER BIOPHARMACEUTICALS,
a Maryland corporation		a Delaware corporation
By:	RREEF Management Company,
	a Delaware corporation
By:	/s/ Chris Eckmann	By:	/s/ Randall C. Schatzman
Name:	Chris Eckmann	Name:	Randall Schatzman
Title:	District Manager	Title:	Chief Executive Officer
Dated:	9/21/05	Dated:	09/19/2005

10/31/01 MTIN

Revised 7/03

ONLY USE FOR: Washington State Properties

LEASE

RREEF AMERICA REIT II CORP. KK,

a Maryland corporation

Landlord

and

ALDER BIOPHARMACEUTICALS,

a Delaware corporation

Tenant

TABLE OF CONTENTS

		Page
1.	USE AND RESTRICTIONS ON USE		1
2.	TERM		2
3.	RENT		3
4.	RENT ADJUSTMENTS		4
5.	SECURITY DEPOSIT		6
6.	ALTERATIONS		6
7.	REPAIR		7
8.	LIENS		8
9.	ASSIGNMENT AND SUBLETTING		8
10.	INDEMNIFICATION		10
11.	INSURANCE		11
12.	WAIVER OF SUBROGATION		11
13.	SERVICES AND UTILITIES		11
14.	HOLDING OVER		12
15.	SUBORDINATION		12
16.	RULES AND REGULATIONS		12
17.	REENTRY BY LANDLORD		12
18.	DEFAULT		13
19.	REMEDIES		14
20.	TENANTS BANKRUPTCY OR INSOLVENCY		17
21.	QUIET ENJOYMENT		17
22.	CASUALTY		17
23.	EMINENT DOMAIN		18
24.	SALE BY LANDLORD		19
25.	ESTOPPEL CERTIFICATES		19
26.	SURRENDER OF PREMISES		19
27.	NOTICES		20
28.	TAXES PAYABLE BY TENANT		20
29.	DEFINED TERMS AND READINGS		20
30.	TENANTS AUTHORITY		21
31.	FINANCIAL STATEMENTS AND CREDIT REPORTS		21

i

32.	COMMISSIONS	21
33.	TIME AND APPLICABLE LAW	21
34.	SUCCESSORS AND ASSIGNS	21
35.	ENTIRE AGREEMENT	21
36.	EXAMINATION NOT OPTION	21
37.	RECORDATION	22
38.	LIMITATION OF LANDLORD’S LIABILITY	22
39.	ADA COMPLIANCE	22
40.	BUILDING SEPARATION	22

ADDENDUM TO LEASE

EXHIBIT A – FLOOR PLAN DEPICTING THE PREMISES

EXHIBIT A-1 – SITE PLAN

EXHIBIT A-2 – LEGAL DESCRIPTION

EXHIBIT B – INITIAL ALTERATIONS

EXHIBIT C – COMMENCEMENT DATE MEMORANDUM

EXHIBIT D – RULES AND REGULATIONS

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ii

MULTI-TENANT INDUSTRIAL NET LEASE

REFERENCE PAGES

BUILDING:	North Creek Parkway Center, Building 6
LANDLORD:	RREEF AMERICA REIT II CORP. KK, a Maryland corporation
LANDLORD’S ADDRESS:	RREEF 16000 Christensen Road, Suite 101 Tukwila WA 98188
WIRE INSTRUCTIONS AND/OR ADDRESS FOR RENT PAYMENT:	RREEF AMERICA REIT II CORP. KK North Creek Parkway Center 75 Remittance Drive, Suite 6143 Chicago, IL 60675-6143
LEASE REFERENCE DATE:	August 5, 2005
TENANT:	ALDER BIOPHARMACEUTICALS, a Delaware corporation.
TENANTS NOTICE ADDRESS:
(a) As of beginning of Term:	11804 North Creek Parkway Bothell, WA 98011
(b) Prior to beginning of Term (if different):	N/A
PREMISES ADDRESS:	11804 North Creek Parkway Bothell, WA 98011
PREMISES RENTABLE AREA:	Approximately 16,702 sq ft (for outline of Premises see Exhibit A)
USE:	General office, research, laboratories and manufacturing facility for a biomedical company.
COMMENCEMENT DATE:	October 1, 2005
RENT COMMENCEMENT DATE:	February 1, 2006
TERM OF LEASE:	Approximately five (5) years, four (4) months and zero (0) days beginning on the Commencement Date and ending on the Termination Date.
TERMINATION DATE:	January 31, 2011

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iii

ANNUAL RENT and MONTHLY INSTALLMENT OF

RENT (Article 3):

Period		Rentable Square Footage	Annual Rent Per Square Foot		Annual Rent		Monthly Installment of Rent *
from	through
10/1/2005	1/31/2006	16,702	$	0.00	$	0.00	$	0.00
2/1/2006	7/31/2006	10,702	$	21.50	$	230,088.00	$	19,174.00
8/1/2006	1/31/2007	16,702	$	21.50	$	359,088.00	$	29,924.00
2/1/2007	1/31/2008	16,702	$	22.15	$	369,948.00	$	30,829.00
2/1/2008	1/31/2009	16,702	$	22.80	$	380,808.00	$	31,734.00
2/1/2009	1/31/2010	16,702	$	23.50	$	392,496.00	$	32,708.00
2/1/2010	1/31/2011	16,702	$	24.20	$	404,184.00	$	33,682.00

* For the Period February 1, 2006 through July 31, 2006 the description of the Premises and the Premises Rentable Area remain unchanged, however Tenant is required to pay rent only on 10,702 rentable square feet. Tenant shall pay its Proportionate Share of Taxes and Expenses on the entire 16,702 rentable square feet at all times during the Term.

INITIAL ESTIMATED MONTHLY INSTALLMENT OF RENT ADJUSTMENTS (Article 4):	$5,679.00 plus utility charges assessed to Tenant per Section 13 of Lease.
TENANT’S PROPORTIONATE SHARE:	65.65% of Building 6 8.12% of total property
SECURITY DEPOSIT:	Security Deposit, in the form of cash or a Letter of Credit issued and confirmed by a financial institution approved by Landlord shall be held by Landlord per Section 5 of the Lease for the following durations and amounts: 10/1/05 – 3/31/07 = $190,400.00 4/1/07 – 3/31/08 = $158,700.00 4/1/08 – 3/31/09 = $127,000.00 4/1/09 –1/31/11 = $ 95,200.00
ASSIGNMENT/SUBLETTING FEE:	$1,000.00
REAL ESTATE BROKER DUE COMMISSION:	Sean Barnes, Staubach Company, and Tom Erlandson, Alexander Commercial Real Estate, to be paid solely by Landlord
TENANT’S SIC CODE:	7391

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iv

AMORTIZATION RATE: 10.00%

The Reference Pages information is incorporated into and made a part of the Lease. In the event of any conflict between any Reference Pages information and the Lease, the Lease shall control. This Lease includes Addendum to Lease and Exhibits A through D, all of which are made a part of this Lease.

LANDLORD:		TENANT:
RREEF AMERICA REIT II CORP. KK		ALDER BIOPHARMACEUTICALS,
a Maryland corporation		a Delaware corporation
By:	RREEF Management Company,
	a Delaware corporation, Its Manager
By:	/s/ Chris Eckmann	By:	/s/ Randall C. Schatzman
Name:	Chris Eckmann	Name:	Randall Schatzman
Title:	District Manager	Title:	Chief Executive Officer
Dated:	9/21/05	Dated:	09/19/2005

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LEASE

By this Lease Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Building as set forth and described on the Reference Pages (the “Premises”). This Lease is solely a lease of space in the Building and does not constitute a lease of any land. The Premises are depicted on the floor plan attached hereto as Exhibit A, and the Building is depicted on the site plan attached hereto as Exhibit A-1. The Reference Pages, including all terms defined thereon, are incorporated as part of this Lease.

1. USE AND RESTRICTIONS ON USE.

1.1 Tenant shall have access to the Premises twenty-four (24) hours per day, seven days per week, and shall have the ability to operate all Building systems after standard building operating hours of 7a.m. – 6p.m., Monday through Friday. All costs incurred by Landlord arising out of Tenant’s operation of Building systems after standard budding operating hours shall be directly paid by Tenant, or if paid by Landlord, shall be reimbursed by Tenant to Landlord. The Premises are to be used solely for the purposes set forth on the Reference Pages. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Budding or injure, annoy, or disturb them, or allow the Premises to be used for any improper, immoral, unlawful, or objectionable purpose, or commit any waste. Tenant shall not do, permit or suffer in, on, or about the Premises the sale of any alcoholic liquor without the written consent of Landlord first obtained. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises and its occupancy and shall promptly comply with all governmental orders and directions for the correction, prevention and abatement of any violations in the Building or appurtenant land, caused or permitted by, or resulting from the specific use by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant’s sole expense. Tenant shall not do or permit anything to be done on or about the Premises or bring or keep anything into the Premises which will in any way increase the rate of, invalidate or prevent the procuring of any insurance protecting against loss or damage to the Building or any of its contents by fire or other casualty or against liability for damage to property or injury to persons in or about the Building or any part thereof.

1.2 Tenant shall not, and shall not direct, suffer or permit any of its agents, contractors, employees, licensees or invitees (collectively, the “Tenant Entities”) to at any time handle, use, manufacture, store or dispose of in or about the Premises or the Building any (collectively “Hazardous Materials”) flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, or other similar substances, petroleum products or derivatives or any substance subject to regulation by or under any federal, state and local laws and ordinances relating to the protection of the environment or the keeping, use or disposition of environmentally hazardous materials, substances, or wastes, presently in effect or hereafter adopted, all amendments to any of them, and all rules and regulations issued pursuant to any of such laws or ordinances (collectively “Environmental Laws”) except as used in the ordinary course of Tenant’s business and except in a manner fully compliant with all Environmental Laws, in the Premises or the Building and appurtenant land, and shall not allow such Hazardous Materials to contaminate the Premises, Building, appurtenant land, or the environment.

Tenant shall, in connection with its handling, use, manufacture, storage, and disposal of Hazardous Materials, comply timely and completely with all governmental requirements for reporting of its handling, use, manufacture, storage, and disposal of Hazardous Materials and shall provide to Landlord copies of all permits, plans, reports, and other records required to be maintained for or to be submitted to any governmental body or agency in connection with Tenant’s handling, use, manufacture, storage, and disposal of Hazardous Materials.

Tenant shall protect, defend, indemnify and hold each and all of the Landlord Entities (as defined in Article 29) harmless from and against any and all loss, claims, liability or costs (including court costs and attorneys’ fees) incurred by reason of any actual or asserted failure of Tenant to fully comply with all applicable Environmental Laws, or the presence, handling, use or disposition in or from the Premises of any Hazardous Materials by Tenant or any Tenant Entity (even though permissible under all applicable Environmental Laws or the provisions of this Lease), or by reason of any actual or asserted failure of Tenant to keep, observe, or perform any provision of this Section 1.2

Landlord shall protect, defend, indemnify, and hold Tenant and Tenant Entities harmless from and against any and all loss, claims, liability, or costs (including court costs and attorneys’ fees) imposed upon or assessed or asserted against Tenant or Tenant Entities arising from the use, manufacture, storage or disposal of Hazardous Materials in the Building by Landlord or third parties prior to the Commencement Date or after the Expiration Date.

1.3 Tenant and the Tenant Entities will be entitled to the non-exclusive use of the common areas of the Building as they exist from time to time during the Term, including the parking facilities, subject to Landlord’s rules and regulations regarding such use. In addition, Landlord shall provide to Tenant and Tenant Entities, and they shall have the right to use and occupy, forty-one (41) parking stalls in the Building parking lot. The foregoing shall not be deemed to provide Tenant with an exclusive right to any parking spaces.

1.4 Existing Equipment. During the term of this Lease, Tenant shall be entitled to use any existing laboratory equipment, case work, or fume hoods left in the Premises by the prior tenants (collectively, the “Existing Equipment”) so long as Existing Equipment complies with current governmental regulations. Tenant hereby accepts the Existing Equipment in its as-is, where is condition. Tenant acknowledges that it has been afforded a full opportunity to inspect the Existing Equipment and that its use of the Existing Equipment is at its own risk and expense. Tenant further acknowledges that, notwithstanding any prior or contemporaneous oral or written representations, statements, documents or understandings, Landlord has not made and does not make any representations or warranties of any kind whatsoever, either express or implied, including but not limited to any implied warranties of merchantability or fitness for a particular purpose, with respect to the Existing Equipment. Tenant shall be solely responsible at its cost for maintaining, repairing and/or replacing the Existing Equipment during the term of this Lease. Tenant hereby releases and agrees to indemnify and defend Landlord from and against any claims or damages related to the Existing Equipment arising out of Tenant’s use of the Existing Equipment.

1.5 Tenant’s Equipment and Installations. Tenant shall install and shall at all times maintain in good working condition, such handling and safety equipment as is necessary for the appropriate and safe handling of all Hazardous Materials generated, used, stored of disposed of on the Premises by Tenant. Such equipment shall include but not be limited to (i) such hoods, ducting filters, and air treatment equipment as is necessary to ensure that the air both within the Premises and after venting is in compliance with all Environmental Requirements, and (ii) such storage and containment vessels for the handling and disposal of Hazardous Materials as are reasonably necessary to prevent any release thereof in violation of environmental requirements, and (iii) such emergency response equipment, including but not limited to showers, decontamination equipment, and the like, as is reasonably necessary to respond appropriately to any release of Hazardous Materials that threatens damage to persons or property or is otherwise in violation of environmental requirements.

1.6 Decommissioning. Prior to the expiration or earlier termination of the Lease Term, Tenant shall provide a decommissioning report prepared or reviewed by an independent third party showing Tenant’s compliance with all decommissioning rules and regulations and demonstrating that the Premises have been left in a clean and uncontaminated state.

1.7 Survival. The provisions of this section 1 shall survive the expiration or termination of the Lease with respect to any events occurring during the Lease Term and prior to such expiration or termination

2. TERM.

2.1 The Term of this Lease shall begin on the Commencement Date as shown on the Reference Pages (“Commencement Date”). This Lease shall terminate on the date as shown on the Reference Pages (“Termination Date”), unless sooner terminated by the provisions of this Lease. Landlord shall tender possession of the Premises on the Commencement Date and in advance of the completion of Landlord’s Work, which is to be performed by Landlord after Tenant takes possession pursuant to Exhibit B to this Lease. Tenant shall, at Landlord’s request, execute and deliver a memorandum agreement provided by Landlord in the form of Exhibit C attached hereto, setting forth the actual Commencement Date, Termination Date and, if

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necessary, a revised rent schedule. Should Tenant fail to do so within thirty (30) days after Landlord’s request, the information set forth in such memorandum provided by Landlord shall be conclusively presumed to be agreed and correct.

2.2 Tenant agrees that in the event of the inability of Landlord to deliver possession of the Premises on the scheduled Commencement Date for any reason, Landlord shall not be liable for any damage resulting from such inability, but Tenant shall not be liable for any rent until the time when Landlord can, after notice to Tenant, deliver possession of the Premises to Tenant. No such failure to give possession on the scheduled Commencement Date shall affect the other obligations of Tenant under this Lease, except that if Landlord is unable to deliver possession of the Premises within one hundred twenty (120) days after the scheduled Commencement Date (other than as a result of strikes, shortages of materials, holdover tenancies or similar matters beyond the reasonable control of Landlord and Tenant is notified by Landlord in writing as to such delay), Tenant shall have the option to terminate this Lease unless said delay is as a result of an act or omission on the part of Tenant (a “Tenant Delay”). If any delay is the result of a Tenant Delay, the Commencement Date and the payment of rent under this Lease shall be accelerated by the number of days of such Tenant Delay.

2.3 In the event Landlord permits Tenant, or any agent, employee or contractor of Tenant, to enter, use or occupy the Premises prior to the Commencement Date, such entry, use or occupancy shall be subject to all the provisions of this Lease other than the payment of rent, including without limitation, Tenant’s compliance with the insurance requirements of Article 11. Said early possession shall not advance the Termination Date.

3. RENT.

3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time to time by paying the Monthly Installment of Rent then in effect on or before the first day of each full calendar month during the Term beginning on the Rent Commencement Date, except that the first full month’s rent shall be paid upon the execution of this Lease. The Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12) of the Annual Rent in effect at such time. Rent for any period during the Term which is less than a full month shall be a prorated portion of the Monthly installment of Rent based upon the number of days in such month. Said rent shall be paid to Landlord, without deduction or offset and without notice or demand, at the Rent Payment Address, as set forth on the Reference Pages, or to such other person or at such other place as Landlord may from time to time designate in writing. If an Event of Default occurs and such Event of Default continues beyond any applicable cure period, Landlord may require by notice to Tenant that all subsequent rent payments be made by an automatic payment from Tenant’s bank account to Landlord’s account; without cost to Landlord. Tenant must implement such automatic payment system prior to the next scheduled rent payment or within thirty (30) days after Landlord’s notice, whichever is later. Unless specified in this Lease to the contrary, all amounts and sums payable by Tenant to Landlord pursuant to this Lease shall be deemed additional rent.

3.2 Tenant recognizes that late payment of any rent or other sum due under this Lease will result in administrative expense to Landlord, the extent of which additional expense is extremely difficult and economically impractical to ascertain. Tenant therefore agrees that if rent or any other sum is not paid when due and payable pursuant to this Lease, a late charge shall be imposed in an amount equal to the greater of (a) Fifty Dollars ($50.00), or (b) four percent (4%) of the unpaid rent or other payment. The amount of the late charge to be paid by Tenant shall be reassessed and added to Tenant’s obligation for each successive month until paid. The provisions of this Section 3.2 in no way relieve Tenant of the obligation to pay rent or other payments on or before the date on which they are due, nor do the terms of this Section 3.2 in any way affect Landlord’s remedies pursuant to Article 19 of this Lease in the event said rent or other payment is unpaid after date due.

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4. RENT ADJUSTMENTS.

4.1 For the purpose of this Article 4, the following terms are defined as follows:

4.1.1 Lease Year: Each calendar year, that is each twelve (12) month period beginning on January 1, falling partly or wholly within the Term, or as otherwise reasonably determined by Landlord pursuant to Landlord’s accounting policies or procedures.

4.1.2 Expenses: All reasonable costs of operation, maintenance, repair, replacement in the ordinary course of Landlord’s maintenance activities, and management of the Building as determined in accordance with generally accepted accounting principles, including the following costs by way of illustration, but not limitation: water and sewer charges; insurance charges of or relating to all insurance policies and endorsements reasonably deemed by Landlord to be reasonably necessary or desirable and relating in any manner to the protection, preservation, or operation of the Building or any part thereof; utility costs unless separately metered to a tenant, including but not limited to, the cost of heat, light, power, steam, gas; waste disposal; the cost of security and alarm services (including any central station signaling system); costs of cleaning, repairing, replacing in the ordinary course of Landlord’s maintenance activities, and maintaining the common areas, including parking and landscaping window cleaning costs; third party labor costs; costs and expenses of managing the Building including management and/or administrative fees which as of the Commencement Date are approximately three (3) percent of gross Building revenues and which during the Term shall not exceed four (4) percent of gross Building revenues; air conditioning maintenance costs; elevator maintenance fees and supplies; material costs; equipment costs including the cost of maintenance, repair and service agreements and rental and leasing costs; purchase costs of equipment; current rental and leasing costs of equipment necessary to maintain, repair, and make replacements in the ordinary course of Landlord’s maintenance activities to the Building; tool costs; licenses, permits and inspection fees; wages and salaries; employee benefits and payroll taxes to the extent attributable to the operation, maintenance, and management of the Building accounting and legal fees; any sales, use or service taxes incurred in connection therewith. In addition, Landlord shall be entitled to recover, as additional rent (which, along with any other capital expenditures constituting Expenses, Landlord may either include in Expenses or cause to be billed to Tenant along with Expenses and Taxes but as a separate item), Tenant’s Proportionate Share of (i) an allocable portion of the cost of capital improvement items which are reasonably calculated to reduce operating expenses; (ii) the cost of fire sprinklers and suppression systems and other life safety systems; and (iii) other capital expenses which are required under any governmental laws, regulations or ordinances which were not applicable to the Building as of the Commencement Date; but the costs described in this sentence shall be amortized over the reasonable life of such expenditures in accordance with such reasonable life and amortization schedules as shall be determined by Landlord in accordance with generally accepted accounting principles, with interest on the unamortized amount at one percent (1%) in excess of the Wall Street Journal prime lending rate announced from time to time. Expenses shall not include those repairs, improvements, and equipment for which Landlord has agreed to be responsible under Section 7.1; costs incurred by Landlord for the repair of damage to the Building to the extent that Landlord is reimbursed by insurance proceeds therefor, costs, including permit, license and inspection costs incurred with respect to the installation of other tenants’ improvements in the Building or incurred in renovating or otherwise improving vacant space for tenants of the Building Landlord’s general corporate overhead expenses; rental and other related expenses incurred in leasing HVAC systems and elevators except for expenses in connection with making minor repairs on or keeping building infrastructure in operation while minor repairs are being made; capital expenses other than those set forth above, depreciation or amortization of the Building or equipment in the Building except as provided herein; loan principal payments, loan fees and charges; leasing commissions; interest expenses on short and long-term borrowings, or advertising costs. Controllable expenses shall not exceed Five Percent (5%) over any previous calendar year during the initial lease term

4.1.3 Taxes: Real estate taxes and any other taxes, charges and assessments which are levied with respect to the Building or the land appurtenant to the Building or with respect to any improvements, fixtures and equipment or other property of Landlord, real or personal, located in the Building and used solely in connection with the operation of the Building and said land, any payments to any ground lessor in reimbursement of tax payments made by such lessor, and all fees, expenses and costs incurred by Landlord in investigating, protesting contesting or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining to any Taxes to be paid by Landlord in any Lease Year. Taxes shall not include any corporate franchise, or estate, inheritance or net income tax, or tax imposed upon any transfer by Landlord of its interest in this Lease or the Building or any taxes to be paid by Tenant pursuant to Article 28.

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4.2 Tenant shall pay as additional rent for each Lease Year Tenant’s Proportionate Share of Expenses and Taxes incurred for such Lease Year, beginning on the Commencement Date.

4.3 The annual determination of Expenses shall be made by Landlord and shall be binding upon Landlord and Tenant, subject to the provisions of this Section 4.3. Landlord shall use commercially reasonable efforts to deliver to Tenant on or before March 31^st of each calendar year an annual reconciliation of Expenses for the prior calendar year. In any event, such annual reconciliation shall be delivered to Tenant no later than April 30 of each calendar year unless Landlord’s preparation of such statement is delayed by causes beyond Landlord’s reasonable control, in which case Landlord shall use commercially reasonable efforts to deliver the statement as soon as possible thereafter. During the Term, Tenant may review, at Tenant’s sole cost and expense, the books and records supporting such determination in an office of Landlord, or Landlord’s agent, during normal business hours, upon giving Landlord five (5) days advance written notice within ninety (90) days after receipt of such determination, but in no event more often than once in any one (1) year period, subject to execution of a confidentiality agreement acceptable to Landlord, and provided that if Tenant utilizes an independent accountant to perform such review it shall be one which is reasonably acceptable to Landlord, is not compensated on a contingency basis and is also subject to such confidentiality agreement. If Tenant fails to object to Landlord’s determination of Expenses within ninety (90) days after receipt, or if any such objection fails to state with specificity the reason for the objection, Tenant shall be deemed to have approved such determination and shall have no further right to object to or contest such determination. In the event that during all or any portion of any Lease Year, the Building is not fully rented and occupied Landlord shall make an appropriate adjustment in occupancy-related Expenses for such year for the purpose of avoiding distortion of the amount of such Expenses to be attributed to Tenant by reason of variation in total occupancy of the Building, by employing consistent and sound accounting and management principles to determine Expenses that would have been paid or incurred by Landlord had the Building been at least ninety-five percent (95%) rented and occupied, and the amount so determined shall be deemed to have been Expenses for such Lease Year.

4.4 Prior to the actual determination thereof for a Lease Year, Landlord shall use commercially reasonable efforts to estimate by January 31^st of each calendar year, Tenant’s liability for Expenses and/or Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or portion thereof. Landlord will give Tenant written notification of the amount of such estimate and Tenant agrees that it will pay, by increase of its Monthly Installments of Rent due in such Lease Year, additional rent in the amount of such estimate. Any such increased rate of Monthly Installments of Rent pursuant to this Section 4.4 shall remain in effect until further written notification to Tenant pursuant hereto. Failure of Landlord to deliver such estimate shall not relieve Tenant of its obligation to pay its Proportionate Share of Expenses and Taxes and absent Landlords estimate for the next Lease Year, Tenant shall continue to pay the monthly amount it had paid in the prior Lease Year.

4.5 When the above mentioned actual determination of Tenant’s liability for Expenses and/or Taxes is made for any Lease Year and when Tenant is so notified in writing, then:

4.5.1 If the total additional rent Tenant actually paid pursuant to Section 4.3 on account of Expenses and/or Taxes for the Lease Year is less than Tenant’s liability for Expenses and/or Taxes, then Tenant shall pay such deficiency to Landlord as additional rent in one lump sum within thirty (30) days of receipt of Landlord’s bill therefor; and

4.5.2 If the total additional rent Tenant actually paid pursuant to Section 4.3 on account of Expenses and/or Taxes for the Lease Year is more than Tenant’s liability for Expenses and/or Taxes, then at Tenant’s option Landlord shall either credit the difference against the then next due payments to be made by Tenant under this Article 4, or refund the difference to Tenant in cash within thirty (30) days after such difference has been determined, or, if the Lease has terminated, refund the difference in cash.

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4.6 If the Commencement Date is other than January 1 or if the Termination Date is other than December 31, Tenant’s liability for Expenses and Taxes for the Lease Year in which said Date occurs shall be prorated based upon a three hundred sixty-five (365) day year.

4.7 If Tenant’s audit of Landlord’s determination of Expenses under Section 4.3 discloses that Landlord has overcharged Tenant by five percent (5%) or more, Landlord shall bear the reasonable cost of Tenant’s audit.

5. SECURITY DEPOSIT. Tenant shall deposit the Security Deposit with Landlord upon the execution of this Lease. Said sum shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants and conditions of this Lease to be kept and performed by Tenant and not as an advance rental deposit or as a measure of Landlord’s damage in case of Tenants default. If Tenant defaults with respect to any provision of this Lease, Landlord may use any pact of the Security Deposit for the payment of any rent or any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. If any portion is so used, Tenant shall within thirty (30) days after written demand therefor, deposit with Landlord an amount sufficient to restore the Security Deposit to its original amount and Tenant’s failure to do so shall be a material breach of this Lease. Except to such extent, if any, as shall be required by law, Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on such deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be pertained by it, the Security Deposit or any balance thereof shall be returned to Tenant at such time after termination of this Lease when Landlord shall have determined that all of Tenants obligations under this Lease have been fulfilled, but not later than thirty (30) days after Landlords receipt of its contractor’s invoice for repair and restoration of the Premises pursuant to Section 26, or if no repair or restoration is needed in Landlord’s determination, within sixty (60) days after the Termination Date.

6. ALTERATIONS.

6.1 Except for those, if any, specifically provided for in Exhibit B to this Lease, Tenant shall not make or suffer to be made any alterations, additions, or improvements, including but not limited to, the attachment of any fixtures or equipment in, on, or to the Premises or any part thereof or the making of any improvements as required by Article 7, without the prior written consent of Landlord, except that Landlord’s consent shall not be required for any interior, nonstructural alteration, addition, or improvement that does not exceed Fifteen Thousand Dollars ($15,000) in cost per project so long as (a) such alteration, addition, or improvement does not impact the base structural components or systems of the Building and (b) such alteration, addition or improvement is not visible from the outside of the Building. When applying for such consent, Tenant shall, if requested by Landlord, furnish complete plans and specifications for such alterations, additions and improvements. Landlord’s consent shall not be unreasonably withheld with respect to alterations which (i) are not structural in nature, (ii) are not visible from the exterior of the Building (iii) do not affect or require modification of the Buildings electrical, mechanical, plumbing, HVAC or other systems, and (iv) in aggregate do not cost more than $5.00 per rentable square foot of that portion of the Premises affected by the alterations in question.

6.2 Whether or not Landlord’s consent is required for the making of any such alteration, addition or improvement by Tenant, the same shall be made by using either Landlords contractor or a contractor reasonably approved by Landlord, in either event at Tenant’s sole cost and expense. If Tenant shall employ any contactor other than Landlords contactor and such other contactor or any subcontractor of such other contactor shall employ any non-union labor or supplier, Tenant shall be responsible for and hold Landlord harmless from any and all delays, damages and extra costs suffered by Landlord as a result of any dispute with any labor unions concerning the wage, hours, terms or conditions of the employment of any such labor. Tenant may, at its option, engage Landlord to provide construction management services, and in such event, Landlord may charge Tenant a construction management fee to cover its overhead as it relates to such proposed work, plus third-party costs actually incurred by Landlord in connection with the proposed work and the design thereof, with all such amounts being due ten (10) days after Landlords written demand.

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6.3 All alterations, additions or improvements proposed by Tenant shall be constructed in accordance with all government laws, ordinances, rules and regulations, using Building standard materials where applicable, and Tenant shall, prior to construction, provide the additional insurance required under Article 11 in such case, and also all such assurances to Landlord as Landlord shall reasonably require to assure payment of the costs thereof including but not limited to, notices of non-responsibility, waivers of lien, surety company performance bonds and funded construction escrows and to protect Landlord and the Building and appurtenant land against any loss from any mechanic’s, materialmen’s or other liens. Tenant shall pay in addition to any sums due pursuant to Article 4, any increase in real estate taxes attributable to any such alteration, addition or improvement for so long, during the Term, as such increase is ascertainable; at Landlord’s election said sums shall be paid in the same way as sums due under Article 4. At Tenant’s request upon Tenant’s application to Landlord for consent to the making of an alteration, addition or improvement to the Premises, Landlord shall advise Tenant as to whether Landlord requires Tenant to remove such alteration, addition or improvement upon expiration of the Lease Term. In no event shall Tenant be obligated to remove any alteration, addition or improvement which exists upon the Premises on or before the execution of this Lease or any alteration, addition, or improvement which Landlord had not advised Tenant to remove upon expiration of the Lease Term when consenting to such alteration, addition, or improvement.

7. REPAIR.

7.1 Prior to the Commencement Date, Landlord shall carry out, at its sole cost and without any right of reimbursement from Tenant under Section 4.1 hereof, all those repairs, replacements, and refurbishments identified in Schedule 7.1 of Exhibit B hereto other than item 1(e). Within thirty (30) days of the Commencement Date, Tenant may deliver to Landlord a punchlist of its in Schedule 7.1 of Exhibit B not completed, and Landlord agrees to proceed with due diligence to perform its obligations regarding such items. Following the Lease Commencement Date, Landlord shall permit Tenant to participate in the repair, replacement and refurbishment process, which shall include inviting Tenant to attend planning and construction meetings and permitting Tenant to have a representative at the job site. Landlord agrees, at its sole cost and without any right of reimbursement from Tenant under Section 4.1 hereof to install in the Building a new building HVAC control unit consistent with item 1(e) of Schedule 7.1 of Exhibit B. Landlord shall use commercially reasonable efforts to commence the installation in late December 2005, to diligently pursue the same to completion, and to avoid disruption to Tenant’s business. Landlord further agrees, at its sole cost and expense and without any right of reimbursement from Tenant under Section 4.1 hereof, to install in the Building a new HVAC unit for the sole use and benefit of the Premises, comparable to the 90-ton unit existing in the Building as of the Commencement Date, and which will provide up to eight (8) air changes per hour. Landlord shall use commercially reasonable efforts to commence the installation of the unit in the first quarter of calendar year 2007, to diligently pursue the same completion, and to avoid disruption to Tenants business. The costs of these replacements shall not be included in the tenant improvement allowance set forth in Exhibit B.

7.2 Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises, except as specified in Exhibit B if attached to this Lease and except that Landlord shall repair, maintain, and replace as needed the structural portions of the root foundation and walls of the Building. By taking possession of the Premises, Tenant accepts them as being in good order, condition and repair and in the condition in which Landlord is obligated to deliver them, except as set forth in the punch list to be delivered pursuant to Section 21 and except as provided in Section 7.1. It is hereby understood and agreed that no representations respecting the condition of the Premises or the Building have been made by Landlord to Tenant, except as specifically set forth in this Lease. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant.

7.3 Subject to Section 7.1, Tenant shall at its own cost and expense keep and maintain all parts of the Premises and such portion of the Building and improvements as are within the exclusive control of Tenant in good condition, promptly making all necessary repairs and replacements, whether ordinary or extraordinary, with materials and workmanship of the same character, kind and quality as the original (including but not limited to, repair and replacement of all fixtures installed by Tenant, water heaters serving the Premises,

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windows, glass and plate glass, doors, exterior stairs, skylights, any special office entries, interior walls and finish work, floors and floor coverings, heating and air conditioning systems serving the Premises, electrical systems and fixtures, sprinkler systems, dock boards, truck doors, dock bumpers, plumbing work and fixtures, and performance of regular removal of trash and debris). Tenant as part of its obligations hereunder shall keep the Premises in a clean and sanitary condition. Tenant will, as far as possible keep all such parts of the Premises from deterioration due to ordinary wear and from falling temporarily out of repair, and upon termination of this Lease in any way Tenant will yield up the Premises to Landlord in good condition and repair, loss by fire or other casualty excepted (but not excepting any damage to glass). Tenant shall, at its own cost and expense, repair any damage to the Premises or the Building resulting from and/or caused in whole or in part by the negligence or misconduct of Tenant, its agents, employees, contactors, invitees, or any other person entering upon the Premises as a result of Tenant’s business activities or caused by Tenant’s default hereunder.

7.4 Except as provided in Article 22, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or to fixtures, appurtenances and equipment in the Building. Except to the extent, if any, prohibited by law, Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect.

7.5 Tenant shall enter into a regularly scheduled preventive maintenance/service contract with a maintenance contractor approved by Landlord for servicing all heating and air conditioning systems and equipment serving the Premises, including the fume exhaust system and including systems and equipment which serve both the Premises and other portions of the Building (and a copy of the contract shall be furnished to Landlord). The service contract must include all services suggested by the equipment manufacturer in the operation/maintenance manual and must become effective within thirty (30) days of the date Tenant takes possession of the Premises. The service contact shall provide that Landlord shall pay directly to the maintenance contractor that portion of the cost of the contract services attributable to portions of the Building which are not the Premises and that Tenant shall pay directly to the maintenance contractor the balance of the cost of the contract services. Should Tenant fail to enter into the maintenance contract in accordance with this section, Landlord may, upon notice to Tenant, enter into such a maintenance/ service contract on behalf of Tenant or perform the work and in either case, charge Tenant its share of the cost thereof along with a reasonable amount for Landlord’s overhead.

8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land and Tenant’s leasehold interest in the Premises free from any liens arising out of any services, work or materials performed, furnished, or contracted for by Tenant, or obligations incurred by Tenant. In the event that Tenant fails, within ten (10) business days following the imposition of any such lien, to either cause the same to be released of record or provide Landlord with insurance against the same issued by a major title insurance company or such other protection against the same as Landlord shall accept (such failure to constitute an Event of Default), Landlord shall have the right to cause the same to be released by such means as it shall deem proper, including payment of the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith shall be payable to it by Tenant within five (5) business days of Landlord’s written notice.

9. ASSIGNMENT AND SUBLETTING.

9.1 Tenant shall not have the right to assign or pledge this Lease or to sublet the whole or any part of the Premises whether voluntarily or by operation of law, or permit the use or occupancy of the Premises by anyone other than Tenant, and shall not make, suffer or permit such assignment, subleasing or occupancy without the prior written consent of Landlord, such consent not to be unreasonably withheld, conditioned or delayed, and said restrictions shall be binding upon any and all assignees of the Lease and subtenants of the Premises. In the event Tenant desires to sublet, or permit such occupancy of the Premises, or any portion thereof, or assign this Lease, Tenant shall give written notice thereof to Landlord at least thirty (30) days but no more than one hundred twenty (120) days prior to the proposed commencement date of such subletting or assignment which notice shall set forth the name of the proposed subtenant or assignee, the relevant terms of

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any sublease or assignment and copies of financial reports and other relevant financial information of the proposed subtenant or assignee. Landlord shall provide Tenant with a written response to the request for consent within thirty (30) days of receipt of Tenant’s written notice and the above described information required to be submitted by Tenant, however in no event shall Landlord’s failure to respond be deemed consent.

9.2 Notwithstanding any assignment or subletting permitted or otherwise, Tenant shall at all times remain directly, primarily and fully responsible and liable for the payment of the rent specified in this Lease and for compliance with all of its other obligations under the terms, provisions and covenants of this Lease. Upon the occurrence of an Event of Default and the continuation of such Event of Default beyond any applicable cure period, if the Premises or any part of them are then assigned or sublet, Landlord, in addition to any other remedies provided in this Lease or provided by law, may, at its option, collect directly from such assignee or subtenant all rents due and becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord from Tenant under this Lease, and no such collection shall be construed to constitute a novation or release of Tenant from the further performance of Tenant’s obligations under this Lease.

9.3 In addition to Landlord’s right to approve of any subtenant or assignee, Landlord shall have the option, in its sole discretion, in the event of any proposed subletting or assignment of the entire Premises, to terminate this Lease, or in the case of a proposed subletting of fifty percent (50%) or more of the entire Premises, to recapture the portion of the Premises to be sublet, as of the date the subletting or assignment is to be effective. The option shall be exercised, if at all, by Landlord giving Tenant written notice given by Landlord to Tenant within thirty (30) days following Landlord’s receipt of Tenant’s written notice as required above. However, if Tenant notifies Landlord, within five (5) business days after receipt of Landlord’s termination notice, that Tenant is rescinding its proposed assignment or sublease, the termination notice shall be void and the Lease shall continue in full force and effect. If this Lease shall be terminated with respect to the entire Premises pursuant to this Section, the Term of this Lease shall end on the date stated in Tenant’s notice as the effective date of the sublease or assignment as if that date had been originally fixed in this Lease for the expiration of the Term. If Landlord recaptures under this Section only a portion of the Premises, the rent to be paid from time to time during the unexpired Term shall abate proportionately based on the proportion by which the approximate square footage of the remaining portion of the Premises shall be less than that of the Premises as of the date immediately prior to such recapture. Tenant shall, at Tenant’s own cost and expense, discharge in full any outstanding commission obligation which may be due and owing as a result of any proposed assignment or subletting whether or not the Premises are recaptured pursuant to this Section 9.3 and rented by Landlord to the proposed tenant or any other tenant.

9.4 In the event that Tenant sells, sublets, assigns or transfers this Lease, Tenant shall pay to Landlord as additional rent an amount equal to one hundred percent (100%) of any Increased Rent (as defined below), less the Costs Component (as defined below), when and as such Increased Rent is received by Tenant. As used in this Section, “Increased Rent” shall mean the excess of (i) all rent and other consideration which Tenant is entitled to receive by reason of any sale, sublease, assignment or other transfer of this Lease, over (ii) the rent otherwise payable by Tenant under this Lease at such time. For purposes of the foregoing any consideration received by Tenant in form other than cash shall be valued at its fair market value as determined by Landlord in good faith. The “Costs Component” is that amount which, if paid monthly, would fully amortize on a straight-line basis, over the entire period for which Tenant is to receive Increased Rent, the reasonable costs incurred by Tenant for leasing commissions and tenant improvements in connection with such sublease, assignment or other transfer.

9.5 Notwithstanding any other provision hereof, it shall be considered reasonable for Landlord to withhold its consent to any assignment of this Lease or sublease of any portion of the Premises if at the time of either Tenants notice of the proposed assignment or sublease or the proposed commencement date thereof, there shall exist any uncured default of Tenant or matter which will become a default of Tenant with passage of time unless cured, or if the proposed assignee or sublessee is an entity: (a) with which Landlord is already in negotiation; (b) is already an occupant of the Building unless Landlord is unable to provide the amount of space required by such occupant; (c) is a governmental agency, (d) is incompatible with the character of

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occupancy of the Building (e) with which the payment for the sublease or assignment is determined in whole or in part based upon its net income or profits; or (f) would subject the Premises to a use which would (i) involve excess wear and tear upon the Building (ii) violate any exclusive right granted to another tenant of the Building (iii) require any addition to or modification of the Premises or the Building in order to comply with building code or other governmental requirements; or, (iv) involve a violation of Section 1.2. Tenant expressly agrees that for the purposes of any statutory or other requirement of reasonableness on the part of Landlord, Landlord’s refusal to consent to any assignment or sublease for any of the reasons described in this Section 9.5, shall be conclusively deemed to be reasonable.

9.6 Upon any request to assign or sublet, Tenant will pay to Landlord the Assignment/Subletting Fee plus, on demand, a sum equal to Landlord’s reasonable attorneys fees, incurred in investigating and considering any proposed or purported assignment or pledge of this Lease or sublease of any of the Premises, regardless of whether Landlord shall consent to, refuse consent, or determine that Landlord’s consent is not required for, such assignment, pledge or sublease. Any purported sale, assignment, mortgage, transfer of this Lease or subletting which does not comply with the provisions of this Article 9 shall be void.

9.7 If Tenant is a corporation, limited liability company, partnership or trust, any transfer or transfers of or change or changes within any twelve (12) month period in the number of the outstanding voting shares of the corporation or limited liability company, the general partnership interests in the partnership or the identity of the persons or entities controlling the activities of such partnership or trust resulting in the persons or entities owning or controlling a majority of such shares, partnership interests or activities of such partnership or trust at the beginning of such period no longer having such ownership or control shall be regarded as equivalent to an assignment of this Lease to the persons or entities acquiring such ownership or control and shall be subject to all the provisions of this Article 9 to the same extent and for all intents and purposes as though such an assignment.

10. INDEMNIFICATION.

10.1 None of the Landlord Entities shall be liable and Tenant hereby waives all claims against them for any damage to any property or any injury to any person in or about the Premises or the Building by or from any cause whatsoever (including without limiting the foregoing, rain or water leakage of any character from the roof, windows, walls, basement, pipes, plumbing works or appliances, the Building not being in good condition or repair, gas, fire, oil, electricity or theft), except to the extent caused by or arising from the gross negligence or willful misconduct of Landlord or its agents, employees or contractors. Tenant shall protect, indemnify and hold the Landlord Entities harmless from and against any and all loss, claims, liability or costs (including court costs and attorneys fees) arising from all third party claims inclined by reason of (a) any damage to any property (including but not limited to property of any Landlord Entity) or any personal injury, including loss of life, occurring in, on or about the Premises or the Building to the extent that such injury or damage shall be caused by or arise from any actual or alleged act, neglect, fault; or omission by or of Tenant or any Tenant Entity to meet any standard of care imposed by any duty or law with respect to the injury or damage; (b) Tenants conduct of its business in or about the Premises or from transactions or other activities of the Tenant or a Tenant Entity on or about the Premises; (c) Tenant’s or Tenant Entity’s failure to comply with any and all governmental laws, ordinances and regulations applicable to it or to its occupancy or use of the Premises or; (d) any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of the Tenant to be performed pursuant to this Lease; or (e) any act, omission, or negligence of Tenant or any Tenant Entity with respect to any duty of Tenant related to the Premises or its obligations under this Lease. Tenant’s indemnification obligations pursuant to this Section 10.1 shall not apply to the extent the loss, claims, liability, or costs are caused in whole or in part by the negligence or willful misconduct of Landlord or a Landlord Entity.

10.2 Landlord shall protect, indemnify, and hold the Tenant and Tenant Entities harmless from and against any and all loss, claims, liability or costs (including court costs and reasonable attorneys’ fees) arising from third party claims incurred by reason of (a) any damage to any property, including but not limited to property of Tenant or any Tenant Entity, or any personal injury, including loss of life, occurring in, on, or about the Premises or the Building to the extent such injury or damage shall be caused by or arise from any

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actual or alleged act, neglect, fault, or omission by or of a Landlord Entity to meet any standard of care imposed by any duty or law with respect to the injury or damage; (b) Landlord’s conduct of its business in or about the Building or from transactions or other activities of a Landlord Entity on or about the Building; (c) a Landlord Entity’s failure to comply with any and all governmental laws, ordinances, and regulations applicable to it possession or use of the Building; (d) any breach or default on the part of Landlord in the performance of any covenant or agreement on the part of Landlord to be performed pursuant to this Lease; or (e) any act, omission, or negligence of a Landlord Entity with respect to any duty of Landlord related to the Building or its obligations under this Lease. Landlord’s indemnification obligations pursuant to this Section 10.2 shall not apply to the extent the loss, claims, liability, or costs are caused in whole or in part by the negligence or willful misconduct of Tenant or a Tenant Entity.

10.3 The provisions of this Article shall survive the termination of this Lease with respect to any claims or liability accruing prior to such termination.

11. INSURANCE.

11.1 Tenant shall keep in force throughout the Term: (a) a Commercial General Liability insurance policy or policies to protect the Landlord Entities against any liability to the public or to any invitee of Tenant or a Landlord Entity incidental to the use of or resulting from any accident occurring in or upon the Premises with a limit of not less than $1,000,000 per occurrence and not less than $2,000,000 in the annual aggregate, or such larger amount as Landlord may prudently require from time to time, covering bodily injury and property damage liability and $1,000,000 products/completed operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident; (c) Employers Liability Insurance with limits of $500,000 each accident; $500,000 disease policy limit, $500,000 disease—each employee; (d) All Risk or Special Form coverage protecting Tenant against loss of or damage to Tenant’s alterations, additions, improvements, carpeting, floor coverings, panelings, decorations, fixtures, inventory and other business personal property situated in or about the Premises to the full replacement value of the property so insured; and, (e) Business Interruption Insurance with limit of liability representing loss of at least approximately six (6) months of income.

11.2 The aforesaid policies shall (a) be provided at Tenant’s expense; (b) name the Landlord Entities as additional insureds (General Liability) and loss payee (Property—Special Form); (c) be issued by an insurance company with a minimum Best’s rating of “AVII” during the Term; and (d) provide that said insurance shall not be canceled unless thirty (30) days prior written notice (ten days for non-payment of premium) shall have been given to Landlord; a certificate of Liability insurance on ACORD Form 25 and a certificate of Property insurance on ACORD Form 27 shall be delivered to Landlord by Tenant upon the Commencement Date and at least thirty (30) days prior to each renewal of said insurance.

11.3 Whenever Tenant shall undertake any alterations, additions or improvements in, to or about the Premises (“Work”) the aforesaid insurance protection must extend to and include injuries to persons and damage to property arising in connection with such Work, without limitation including liability under any applicable structural work act, and such other insurance as Landlord shall require; and the policies of or certificates evidencing such insurance must be delivered to Landlord prior to the commencement of any such Work.

12. WAIVER OF SUBROGATION. So long as their respective insurers so permit, Tenant and Landlord hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage, All Risks or other insurance now or hereafter existing for the benefit of the respective party but only to the extent of the net insurance proceeds payable under such policies. Each party shall obtain any special endorsements required by their insurer to evidence compliance with the aforementioned waiver.

13. SERVICES AND UTILITIES. Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler system charges and other utilities and services used on or from the Premises, together with any taxes, penalties, and surcharges or the like pertaining thereto and any maintenance charges for utilities. Subject to Section 7.1 hereof, Tenant shall furnish all electric light bulbs, tubes and ballasts, battery packs for

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emergency lighting and fire extinguishers. If any such services are not separately metered to Tenant, Tenant shall pay its Proportionate Share of all charges jointly metered with other premises as determined by Landlord. Any such charges paid by Landlord and assessed against Tenant shall be immediately payable to Landlord on demand and shall be additional rent hereunder. Tenant will not, without the written consent of Landlord, contract with a utility provider to service the Premises with any utility, including but not limited to, telecommunications, electricity, water, sewer or gas, which is not previously providing such service to other tenants in the Building. Landlord shall in no event be liable for any interruption or failure of utility services on or to the Premises.

14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains possession of the Premises or part of them after termination of this Lease by lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One Hundred Fifty Percent (150%) of the amount of the Annual Rent for the last period prior to the date of such termination plus all Rent Adjustments under Article 4, prorated on a daily basis, and shall also pay all damages sustained by Landlord by reason of such retention. If Landlord gives notice to Tenant of Landlord s election to such effect, such holding over shall constitute renewal of this Lease for a period from month to month at the Holdover Rate, but if the Landlord does not so elect, no such renewal shall result notwithstanding acceptance by Landlord of any sums due hereunder after such termination; and instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have been created. In any event, no provision of this Article 14 shall be deemed to waive Landlord’s right of reentry or any other right under this Lease or at law.

15. SUBORDINATION. Without the necessity of any additional document being executed by Tenant for the purpose of effecting a subordination, this Lease shall be subject and subordinate at all times to ground or underlying leases and to the lien of any mortgages or deeds of trust now or hereafter placed on, against or affecting the Building Landlord’s interest or estate in the Building or any ground or underlying lease; provided, however, this Lease shall be subordinate to future mortgages and deeds of trust affecting the Building only if the holder thereof agrees in writing to recognize this Lease in the event of foreclosure so long as Tenant is not in default and provided further that if the lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust elects to have Tenant’s interest in this Lease be superior to any such instrument, then, by notice to Tenant, this Lease shall be deemed superior, whether this Lease was executed before or after said instrument. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver within ten (10) days of Landlord’s request such further instruments evidencing such subordination or superiority of this Lease as may be required by Landlord.

16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all the rules and regulations as set forth in Exhibit D to this Lease and all reasonable and non-discriminatory modifications of and additions to them from time to time put into effect by Landlord. Landlord shall use commercially reasonable efforts to avoid disruption to Tenant’s business when effecting such modifications of and additions to the rules and regulations. Landlord shall not be responsible to Tenant for the non-performance by any other tenant or occupant of the Building of any such rules and regulations.

17. REENTRY BY LANDLORD.

17.1 Landlord reserves and shall at all times have the right to re-enter the Premises, upon reasonable prior notice to Tenant except in the case of emergency, to inspect the same, to show said Premises to prospective purchasers, mortgagees or tenants, and to alter, improve or repair the Premises and any portion of the Building without abatement of rent, and may for that purpose erect, use and maintain scaffolding, pipes, conduits and other necessary structures and open any wall, ceiling or floor in and through the Building and Premises where reasonably required by the character of the work to be performed, provided entrance to the Premises shall not be blocked thereby, and further provided that the business of Tenant shall not be interfered with unreasonably. Landlord shall have the right at any time to change the arrangement and/or locations of entrances, or passageways, doors and doorways, and corridors, windows, elevators, stairs, toilets or other public parts of the Building and to change the name, number or designation by which the Building is commonly known. In the event that Landlord damages any portion of any wall or wall covering, ceiling or floor or floor covering within the Premises, Landlord shall repair or replace the damaged portion to match the

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original as nearly as commercially reasonable but shall not be required to repair or replace more than the portion actually damaged. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned by any action of Landlord authorized by this Article 17.

17.2 For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in the Premises, excluding Tenant’s vaults and safes or special security areas (designated in advance), and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in an emergency to obtain entry to any portion of the Premises. As to any portion to which access cannot be had by means of a key or keys in Landlord’s possession, Landlord is authorized to gain access by such means as Landlord shall elect and the reasonable cost of repairing any damage occurring in doing so shall be borne by Tenant and paid to Landlord within five (5) days of Landlord’s demand.

18. DEFAULT.

18.1 Except as otherwise provided in Article 20, the following events shall be deemed to be Events of Default under this Lease:

18.1.1 Tenant shall fail to pay when due any sum of money becoming due to be paid to Landlord under this Lease, whether such sum be any installment of the rent reserved by this Lease, any other amount treated as additional rent under this Lease, or any other payment or reimbursement to Landlord required by this Lease, whether or not treated as additional rent under this Lease, and such failure shall continue for a period of five (5) business days after written notice that such payment was not made when due, but if any such notice shall be given, for the twelve (12) month period commencing with the date of such notice, the failure to pay within five (5) business days after due any additional sum of money becoming due to be paid to Landlord under this Lease during such period shall be an Event of Default, without notice.

18.1.2 Tenant shall fail to comply with any term, provision or covenant of this Lease which is not provided for in another Section of this Article and shall not cure such failure within twenty (20) days (forthwith, if the failure involves a hazardous condition) after written notice of such failure to Tenant provided, however, that such failure shall not be an event of default if such failure could not reasonably be cured during such twenty (20) day period, Tenant has commenced the cure within such twenty (20) day period and thereafter is diligently pursuing such cure to completion, but the total aggregate cure period shall not exceed ninety (90) days.

18.1.3 Tenant shall fail to vacate the Premises immediately upon termination of this Lease, by lapse of time or otherwise, or upon termination of Tenant’s right to possession only.

18.1.4 Tenant shall become insolvent, admit in writing its inability to pay its debts generally as they become due, file a petition in bankruptcy or a petition to take advantage of any insolvency statute, make an assignment for the benefit of creditors, make a transfer in fraud of creditors, apply for or consent to the appointment of a receiver of itself or of the whole or any substantial part of its property, or file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws, as now in effect or hereafter amended, or any other applicable law or statute of the United States or any state thereof.

18.1.5 A court of competent jurisdiction shall enter an order, judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of the whole or any substantial part of its property, without the consent of Tenant, or approving a petition filed against Tenant seeking reorganization or arrangement of Tenant under the bankruptcy laws of the United States, as now in effect or hereafter amended, or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof.

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19. REMEDIES.

19.1 Except as otherwise provided in Article 20, upon the occurrence of any of the Events of Default described or referred to in Article 18, Landlord shall have the option to pursue any one or more of the following remedies without any notice or demand whatsoever, concurrently or consecutively and not alternatively:

19.1.1 Landlord may, at its election, terminate this Lease or terminate Tenant’s right to possession only, without terminating the Lease.

19.1.2 Upon any termination of this Lease, whether by lapse of time or otherwise, or upon any termination of Tenant’s right to possession without termination of the Lease, Tenant shall surrender possession and vacate the Premises immediately, and deliver possession thereof to Landlord, and Tenant hereby grants to Landlord full and free license to enter into and upon the Premises in such event and to repossess Landlord of the Premises as of Landlord’s former estate and to expel or remove Tenant and any others who may be occupying or be within the Premises and to remove Tenant’s signs and other evidence of tenancy and all other property of Tenant therefrom without being deemed in any manner guilty of trespass, eviction or forcible entry or detainer, and without incurring any liability for any damage resulting therefrom, Tenant waiving any right to claim damages for such re-entry and expulsion, and without relinquishing Landlord’s right to rent or any other right given to Landlord under this Lease or by operation of law.

19.1.3 Upon any termination of this Lease, whether by lapse of time or otherwise, Landlord shall be entitled to recover as damages, all rent, including any amounts treated as additional rent under this Lease, and other sums due and payable by Tenant on the date of termination, plus as liquidated damages and not as a penalty, an amount equal to the sum of (a) an amount equal to the then present value of the rent reserved in this Lease for the residue of the stated Term of this Lease including any amounts treated as additional rent under this Lease and all other sums provided in this Lease to be paid by Tenant, minus the fair rental value of the Premises for such residue; (b) the value of the time and expense necessary to obtain a replacement tenant or tenants, and the estimated expenses described in Section 19.1.4 relating to recovery of the Premises, preparation for reletting and for reletting itself; and (c) the cost of performing any other covenants which would have otherwise been performed by Tenant.

19.1.4 Upon any termination of Tenant’s right to possession only without termination of the Lease:

19.1.4.1 Neither such termination of Tenant’s right to possession nor Landlord’s taking and holding possession thereof as provided in Section 19.1.2 shall terminate the Lease or release Tenant, in whole or in part, from any obligation, including Tenant’s obligation to pay the rent, including any amounts treated as additional rent, under this Lease for the full Term, and if Landlord so elects Tenant shall continue to pay to Landlord the entire amount of the rent as and when it becomes due, including any amounts treated as additional rent under this Lease, for the remainder of the Term plus any other sums provided in this Lease to be paid by Tenant for the remainder of the Term.

19.1.4.2 Landlord shall use commercially reasonable efforts to relet the Premises or portions thereof to the extent required by applicable law. Landlord and Tenant agree that Landlord shall be required to use commercially reasonable efforts to lease the Premises and shall not be required to give any preference or priority to the showing or leasing of the Premises or portions thereof over any other space that Landlord may be leasing or have available and may place a suitable prospective tenant in any such other space regardless of when such other space becomes available and that Landlord shall have the right to relet the Premises for a greater or lesser term than that remaining under this Lease, the right to relet only a portion of the Premises, or a portion of the Premises or the entire Premises as apart of a larger area, and the right to change the character or use of the Premises. In connection with or in preparation for any reletting, Landlord may, but shall not be required to, make repairs, alterations and additions in or to the Premises and redecorate the same to the extent Landlord deems necessary or desirable, and Tenant shall pay the cost thereof together with Landlord’s expenses of reletting, including, without limitation, any commission incurred by Landlord,

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within five (5) business days of Landlord’s demand. Landlord shall not be required to observe any instruction given by Tenant about any reletting or accept any tenant offered by Tenant unless such offered tenant has a credit-worthiness acceptable to Landlord and leases the entire Premises upon terms and conditions including a rate of rent (after giving effect to all expenditures by Landlord for tenant improvements, broker’s commissions and other leasing costs) all no less favorable to Landlord than as called for in this Lease, nor shall Landlord be required to make or permit any assignment or sublease for more than the current term or which Landlord would not be required to permit under the provisions of Article 9.

19.1.4.3 Until such time as Landlord shall elect to terminate the Lease and shall thereupon be entitled to recover the amounts specified in such case in Section 19.1.3, Tenant shall pay to Landlord upon demand the full amount of all rent, including any amounts treated as additional rent under this Lease and other sums reserved in this Lease for the remaining Term, together with the costs of repairs, alterations, additions, redecorating and Landlord’s expenses of reletting and the collection of the rent accruing therefrom (including reasonable attorney’s fees and broker’s commissions), as the same shall then be due or become due from time to time, less only such consideration as Landlord may have received from any reletting of the Premises; and Tenant agrees that Landlord may file suits from time to time to recover any sums falling due under this Article 19 as they become due. Any proceeds of reletting by Landlord in excess of the amount then owed by Tenant to Landlord from time to time shall be credited against Tenant’s future obligations under this Lease but shall not otherwise be refunded to Tenant or inure to Tenant’s benefit.

19.2 Upon the occurrence of an Event of Default, Landlord may (but shall not be obligated to) cure such default at Tenant’s sole expense. Without limiting the generality of the foregoing, Landlord may, at Landlord’s option, enter into and upon the Premises if Landlord determines in its sole discretion that Tenant is not acting within a commercially reasonable time to maintain, repair or replace anything for which Tenant is responsible under this Lease or to otherwise effect compliance with its obligations under this Lease and correct the same, without being deemed in any manner guilty of trespass, eviction or forcible entry and detainer and without incurring any liability for any damage or interruption of Tenant’s business resulting therefrom and Tenant agrees to reimburse Landlord within five (5) days of Landlord’s demand as additional rent, for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease, plus interest from the date of expenditure by Landlord at the Wall Street Journal prime rate.

19.3 Tenant understands and agrees that in entering into this Lease, Landlord is relying upon receipt of all the Annual and Monthly Installments of Rent to become due with respect to all the Premises originally leased hereunder over the full Initial Term of this Lease for amortization, including interest at the Amortization Rate. For purposes hereof the “Concession Amount” shall be defined as the aggregate of all amounts forgone or expended by Landlord as free rent under the lease, under Exhibit B hereof for construction allowances (excluding therefrom any amounts expended by Landlord for Landlord’s Work, as defined in Exhibit B), and for brokers’ commissions payable by reason of this Lease. Accordingly, Tenant agrees that if this Lease or Tenant’s right to possession of the Premises leased hereunder shall be terminated as of any date (“Default Termination Date”) prior to the expiration of the full Initial Term hereof by reason of a default of Tenant, there shall be due and owing to Landlord as of the day prior to the Default Termination Date, as rent in addition to all other amounts owed by Tenant as of such Date, the amount (“Unamortized Amount”) of the Concession Amount determined as set forth below; provided, however, that in the event that such amounts are recovered by Landlord pursuant to any other provision of this Article 19, Landlord agrees that it shall not attempt to recover such amounts pursuant to this Paragraph 19.3. For the purposes hereof, the Unamortized Amount shall be determined in the same manner as the remaining principal balance of a mortgage with interest at the Amortization Rate payable in level payments over the same length of time as from the effectuation of the Concession concerned to the end of the full Initial Term of this Lease would be determined. The foregoing provisions shall also apply to and upon any reduction of space in the Premises, as though such reduction were a termination for Tenant’s default, except that (i) the Unamortized Amount shall be reduced by any amounts paid by Tenant to Landlord to effectuate such reduction and (ii) the manner of application shall be that the Unamortized Amount shall first be determined as though for a full termination as of the Effective Date of the elimination of the portion, but then the amount so determined shall be multiplied by the fraction of which the numerator is the rentable square footage of the eliminated portion and the denominator is the rentable square footage of the Premises originally leased hereunder, and the amount thus obtained shall be the Unamoritized Amount.

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19.4 If on account of any breach or default by either party in its obligations under the terms and conditions of this Lease, it shall become necessary or appropriate for the nonbreaching or nondefaulting party to employ or consult with an attorney or collection agency concerning or to enforce or defend any of such party’s rights or remedies arising under this Lease or to collect any sums due from the breaching or defaulting party, the breaching or defaulting party agrees to pay all costs and fees so incurred by the nonbreaching or nondefaulting party, including, without limitation, reasonable attorneys’ fees and costs. TENANT EXPRESSLY WAIVES ANY RIGHT TO: (A) TRIAL BY JURY; AND (B) SERVICE OF ANY NOTICE REQUIRED BY ANY PRESENT OR FUTURE LAW OR ORDINANCE APPLICABLE TO LANDLORDS OR TENANTS BUT NOT REQUIRED BY THE TERMS OF THIS LEASE.

19.5 Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies provided in this Lease or any other remedies provided by law (all such remedies being cumulative), nor shall pursuit of any remedy provided in this Lease constitute a forfeiture or waiver of any rent due to Landlord under this Lease or of any damages accruing to Landlord by reason of the violation of any of the terms, provisions and covenants contained in this Lease.

19.6 No act or thing done by Landlord or its agents during the Term shall be deemed a termination of this Lease or an acceptance of the surrender of the Premises, and no agreement to terminate this Lease or accept a surrender of said Premises shall be valid, unless in writing signed by Landlord. No waiver by Landlord of any violation or breach of any of the terms, provisions and covenants contained in this Lease shall be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions and covenants contained in this Lease. Landlord’s acceptance of the payment of rental or other payments after the occurrence of an Event of Default shall not be construed as a waiver of such Default, unless Landlord so notifies Tenant in writing. Forbearance by Landlord in enforcing one or more of the remedies provided in this Lease upon an Event of Default shall not be deemed or construed to constitute a waiver of such Default or of Landlord’s right to enforce any such remedies with respect to such Default or any subsequent Default.

19.7 To secure the payment of all rentals and other sums of money becoming due from Tenant under this Lease, Landlord shall have and Tenant grants to Landlord a first lien upon the leasehold interest of Tenant under this Lease, which lien may be enforced in equity, and a continuing security interest upon all goods, wares, equipment, fixtures, furniture, inventory, accounts, contract rights, chattel paper and other personal property of Tenant situated on the Premises, and such property shall not be removed therefrom without the consent of Landlord until all arrearages in rent as well as any and all other sums of money then due to Landlord under this Lease shall first have been paid and discharged. Upon the occurrence of an Event of Default, Landlord shall have, in addition to any other remedies provided in this Lease or by law, all rights and remedies under the Uniform Commercial Code, including without limitation the right to sell the property described in this Section 19.7 at public or private sale upon five (5) days’ notice to Tenant. Tenant shall execute all such financing statements and other instruments as shall be deemed necessary or desirable in Landlord’s discretion to perfect the security interest hereby created.

19.8 Any and all property which may be removed from the Premises by Landlord pursuant to the authority of this Lease or of law, to which Tenant is or may be entitled, may be handled, removed and/or stored, as the case may be, by or at the direction of Landlord but at the risk, cost and expense of Tenant, and Landlord shall in no event be responsible for the value, preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all expenses incurred in such removal and all storage charges against such property so long as the same shall be in Landlord’s possession or under Landlord’s control. Any such property of Tenant not retaken by Tenant from storage within thirty (30) days after removal from the Premises shall, at Landlord’s option, be deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale without further payment or credit by Landlord to Tenant

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19.9 If more than three (3) Events of Default occur during the Term or any renewal thereof, Tenant’s renewal options, expansion options, purchase options and rights of first offer and/or refusal, if any are provided for in this Lease, shall be null and void.

20. TENANTS BANKRUPTCY OR INSOLVENCY.

20.1 If at any time and for so long as Tenant shall be subjected to the provisions of the United States Bankruptcy Code or other law of the United States or any state thereof for the protection of debtors as in effect at such time (each a “Debtor’s Law”):

20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or receiver of Tenant’s assets (each a “Tenant’s Representative”) shall have no greater right to assume or assign this Lease or any interest in this Lease, or to sublease any of the Premises than accorded to Tenant in Article 9, except to the extent Landlord shall be required to permit such assumption, assignment or sublease by the provisions of such Debtor’s Law. Without limitation of the generality of the foregoing, any right of any Tenant’s Representative to assume or assign this Lease or to sublease any of the Premises shall be subject to the conditions that:

20.1.1.1 Such Debtor’s Law shall provide to Tenant’s Representative a right of assumption of this Lease which Tenant’s Representative shall have timely exercised and Tenant’s Representative shall have fully cured any default of Tenant under this Lease.

20.1.1.2 Tenant’s Representative or the proposed assignee, as the case shall be, shall have deposited with Landlord as security for the timely payment of rent an amount equal to the larger of: (a) three (3) months’ rent and other monetary charges accruing under this Lease; and (b) any sum specified in Article 5; and shall have provided Landlord with adequate other assurance of the future performance of the obligations of the Tenant under this Lease. Without limitation, such assurances shall include, at least, in the case of assumption of this Lease, demonstration to the satisfaction of the Landlord that Tenant’s Representative has and will continue to have sufficient unencumbered assets after the payment of all secured obligations and administrative expenses to assure Landlord that Tenant’s Representative will have sufficient funds to fulfill the obligations of Tenant under this Lease; and, in the case of assignment, submission of current financial statements of the proposed assignee, audited by an independent certified public accountant reasonably acceptable to Landlord and showing a net worth and working capital in amounts determined by Landlord to be sufficient to assure the future performance by such assignee of all of the Tenant’s obligations under this Lease.

20.1.1.3 The assumption or any contemplated assignment of this Lease or subleasing any part of the Premises, as shall be the case, will not breach any provision in any other lease, mortgage, financing agreement or other agreement by which Landlord is bound

20.1.1.4 Landlord shall have, or would have had absent the Debtor’s Law, no right under Article 9 to refuse consent to the proposed assignment or sublease by reason of the identity or nature of the proposed assignee or sublessee or the proposed use of the Premises concerned.

21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant, while paying the rental and performing its other covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the terms and provisions of this Lease. Landlord shall not be liable for any interference or disturbance by other tenants or third persons, nor shall Tenant be released from any of the obligations of this Lease because of such interference or disturbance.

22. CASUALTY.

22.1 In the event the Premises or the Building are damaged by fire or other cause and in Landlord’s reasonable estimation such damage can be materially restored within one hundred eighty (180) days, Landlord shall forthwith repair the same and this Lease shall remain in full force and effect, except that

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Tenant shall be entitled to a proportionate abatement in rent from the date of such damage. Such abatement of rent shall be made pro rata in accordance with the extent to which the damage and the making of such repairs shall interfere with the use and occupancy by Tenant of the Premises from time to time. Within forty-five (45) days from the date of such damage, Landlord shall notify Tenant, in writing, of Landlord’s reasonable estimation of the length of time within which material restoration can be made, and Landlord’s determination shall be binding on Tenant. For purposes of this Lease, the Building or Premises shall be deemed “materially restored” if they are in such condition as would not prevent or materially interfere with Tenant’s use of the Premises for the purpose for which it was being used immediately before such damage.

22.2 If such repairs cannot, in Landlord’s reasonable estimation, be made within one hundred eighty (180) days, Landlord and Tenant shall each have the option of giving the other, at any time within ninety (90) days after such damage, notice terminating this Lease as of the date of such damage. In the event of the giving of such notice, this Lease shall expire and all interest of the Tenant in the Premises shall terminate as of the date of such damage as if such date had been originally fixed in this Lease for the expiration of the Term. In the event that neither Landlord nor Tenant exercises its option to terminate this Lease, then Landlord shall repair or restore such damage, this Lease continuing in full force and effect, and the rent hereunder shall be proportionately abated as provided in Section 22.1.

22.3 Landlord shall not be required to repair or replace any damage or loss by or from fire or other cause to any panelings, decorations, partitions, additions, railings, ceilings, floor coverings, office fixtures or any other property or improvements installed on the Premises by, or belonging to, Tenant. Any insurance which may be carried by Landlord or Tenant against loss or damage to the Building or Premises shall be for the sole benefit of the party carrying such insurance and under its sole control.

22.4 In the event that Landlord should fail to complete such repairs and material restoration within sixty (60) days after the date estimated by Landlord therefor as extended by this Section 22.4, Tenant may at its option and as its sole remedy terminate this Lease by delivering written notice to Landlord, within fifteen (15) days after the expiration of said period of time, whereupon the Lease shall end on the date of such notice or such later date fixed in such notice as if the date of such notice was the date originally fixed in this Lease for the expiration of the Term; provided, however, that if construction is delayed because of changes, deletions or additions in construction requested by Tenant; strikes, lockouts, casualties, Acts of God, war, material or labor shortages, government regulation or control or other causes beyond the reasonable control of Landlord, the period for restoration, repair or rebuilding shall be extended for the amount of time Landlord is so delayed.

22.5 Notwithstanding anything to the contrary contained in this Article: (a) Landlord shall not have any obligation whatsoever to repair, reconstruct; or restore the Premises when the damages resulting from any casualty covered by the provisions of this Article 22 occur during the last twelve (12) months of the Term or any extension thereof, but if Landlord determines not to repair such damages Landlord shall notify Tenant and if such damages shall render any material portion of the Premises untenantable Tenant shall have the right to terminate this Lease by notice to Landlord within fifteen (15) days after receipt of Landlord’s notice; and (b) in the event the holder of any indebtedness secured by a mortgage or deed of trust covering the Premises or Building requires that any insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days after such requirement is made by any such holder, whereupon this Lease shall end on the date of such damage as if the date of such damage were the date originally fixed in this Lease for the expiration of the Term.

22.6 In the event of any damage or destruction to the Building or Premises by any peril covered by the provisions of this Article 22, it shall be Tenant’s responsibility to properly secure the Premises and upon notice from Landlord to remove forthwith, at its sole cost and expense, such portion of all of the property belonging to Tenant or its licensees from such portion or all of the Building or Premises as Landlord shall request.

23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be taken or appropriated by any public or quasi public authority under the power of eminent domain, or conveyance in lieu of such appropriation, either party to this Lease shall have the right, at its option, of giving the other, at any time within

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thirty (30) days after such taking, notice terminating this Lease, except that Tenant may only terminate this Lease by reason of taking or appropriation, if such taking or appropriation shall be so substantial as to materially interfere with Tenant’s use and occupancy of the Premises. If neither party to this Lease shall so elect to terminate this Lease, the rental thereafter to be paid shall be adjusted on a fair and equitable basis under the circumstances. In addition to the rights of Landlord above, if any substantial part of the Building shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain or conveyance in lieu thereof, and regardless of whether the Premises or any part thereof are so taken or appropriated, Landlord shall have the right, at its sole option, to terminate this Lease. Landlord shall be entitled to any and all income, rent, award, or any interest whatsoever in or upon any such sum, which may be paid or made in connection with any such public or quasi-public use or purpose, and Tenant hereby assigns to Landlord any interest it may have in or claim to all or any part of such sums, other than any separate award which may be made with respect to Tenant’s trade fixtures and moving expenses; Tenant shall make no claim for the value of any unexpired Term.

24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the Building, the same shall operate to release Landlord from any future liability upon any of the covenants or conditions, expressed or implied, contained in this Lease in favor of Tenant, and in such event Tenant agrees to look solely to the responsibility of the successor in interest of Landlord in and to this Lease. Except as set forth in this Article 24, this Lease shall not be affected by any such sale and Tenant agrees to attorn to the purchaser or assignee so long as the successor in interest agrees to acquire and accept the interest in the Premises subject to this Lease and to carry out all of the covenants and obligations of Landlord pursuant to this Lease. If any security has been given by Tenant to secure the faithful performance of any of the covenants of this Lease, Landlord may transfer or deliver said security, as such, to Landlord’s successor in interest and thereupon Landlord shall be discharged from any further liability with regard to said security.

25. ESTOPPEL CERTIFICATES. Within fifteen (15) days following any written request which Landlord may make from time to time, Tenant shall execute and deliver to Landlord or mortgagee or prospective mortgagee a sworn statement certifying (a) the date of commencement of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there have been modifications to this Lease, that this Lease is in full force and effect, as modified, and stating the date and nature of such modifications); (c) the date to which the rent and other sums payable under this Lease have been paid; (d) the fact that there are no current defaults under this Lease by either Landlord or Tenant except as specified in Tenant’s statement; and (e) such other matters as may be requested by Landlord. Landlord and Tenant intend that any statement delivered pursuant to this Article 25 may be relied upon by any mortgagee, beneficiary or purchaser, and Tenant shall be liable for all loss, cost or expense resulting from the failure of any sale or funding of any loan caused by any material misstatement contained in such estoppel certificate. Tenant irrevocably agrees that if Tenant fails to execute and deliver such certificate within such fifteen (15) day period Landlord or Landlord’s beneficiary or agent may execute and deliver such certificate on Tenant’s behalf, and that such certificate shall be fully binding on Tenant.

26. SURRENDER OF PREMISES.

26.1 Tenant shall arrange to meet Landlord for two (2) joint inspections of the Premises, the first to occur at least thirty (30) days (but no more than sixty (60) days) before the last day of the Term, and the second to occur not later than forty-eight (48) hours after Tenant has vacated the Premises. In the event of Tenant’s failure to arrange such joint inspections and/or participate in either such inspection, Landlord’s inspection at or after Tenant’s vacating the Premises shall be conclusively deemed correct for purposes of determining Tenant’s responsibility for repairs and restoration.

26.2 All alterations, additions, and improvements in, on, or to the Premises made or installed by or for Tenant (collectively, “Alterations”), shall be and remain the property of Tenant during the Term. Upon the expiration or sooner termination of the Term, all Alterations shall become a part of the realty and shall belong to Landlord without compensation, and title shall pass to Landlord under this Lease as by a bill of sale. At the end of the Term or any renewal of the Term or other sooner termination of this Lease, Tenant will peaceably deliver up to Landlord possession of the Premises, together with all Alterations by whomsoever made, in the

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same conditions received or first installed, broom clean and free of all debris, excepting only ordinary wear and tear and damage by fire or other casualty. Notwithstanding the foregoing, if Landlord has notified Tenant in the course of consenting to Alterations as set forth in Article 6 hereof, or if where no consent of Landlord was required to Alterations and Landlord elects by notice given to Tenant at least ten (10) days prior to expiration of the Term, Tenant shall, at Tenant’s sole cost, remove any Alterations so designated by Landlord’s notice, and repair any damage caused by such removal. Tenant must, at Tenant’s sole cost, remove upon termination of this Lease, any and all of Tenant’s furniture, furnishings, movable partitions of less than full height from floor to ceiling and other trade fixtures and personal property, as well as all data/telecommunications cabling and wiring installed by or on behalf of Tenant, whether inside walls, under any raised floor or above any ceiling (collectively, “Personalty”). Personalty not so removed shall be deemed abandoned by the Tenant and title to the same shall thereupon pass to Landlord under this Lease as by a bill of sale, but Tenant shall remain responsible for the cost of removal and disposal of such Personalty, as well as any damage caused by such removal. In lieu of requiring Tenant to remove Alterations and Personalty and repair the Premises as aforesaid, Landlord may, by written notice to Tenant delivered at least thirty (30) days before the Termination Date, require Tenant to pay to Landlord, as additional rent hereunder, the cost of such removal and repair in an amount reasonably estimated by Landlord.

26.3 All obligations of Tenant under this Lease not fully performed as of the expiration or earlier termination of the Term shall survive the expiration or earlier termination of the Term. Upon the expiration or earlier termination of the Term, Tenant shall pay to Landlord the amount, as estimated by Landlord, necessary to repair and restore the Premises as provided in this Lease and/or to discharge Tenant’s obligation for unpaid amounts due or to become due to Landlord. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant, with Tenant being liable for any additional costs upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied. Any otherwise unused Security Deposit shall be credited against the amount payable by Tenant under this Lease.

27. NOTICES. Any notice or document required or permitted to be delivered under this Lease shall be addressed to the intended recipient, by fully prepaid registered or certified United States Mail return receipt requested, or by reputable independent contract delivery service furnishing a written record of attempted or actual delivery, and shall be deemed to be delivered when tendered for delivery to the addressee at its address set forth on the Reference Pages, or at such other address as it has then last specified by written notice delivered in accordance with this Article 27, or if to Tenant at either its aforesaid address or its last known registered office or home of a general partner or individual owner, whether or not actually accepted or received by the addressee. Any such notice or document may also be personally delivered if a receipt is signed by and received from, the individual, if any, named in Tenant’s Notice Address.

28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be paid by Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any and all taxes payable by Landlord (other than taxes imposed on Landlord based upon Landlords net income and any Washington State or local Business & Occupation taxes imposed on Landlord based upon Landlord’s gross income) whether or not now customary or within the contemplation of the parties to this Lease: (a) upon, allocable to, or measured by or on the gross or net rent payable under this Lease, including without limitation any excise tax levied by the State, any political subdivision thereof, or the Federal Government with respect to the receipt of such rent; (b) upon or with respect to the possession, leasing operation, management, maintenance, alteration, repair, use or occupancy of the Premises or any portion thereof, including any sales, use or service tax imposed as a result thereof, (c) upon or measured by the Tenant’s gross receipts or payroll or the value of Tenant’s equipment, furniture, fixtures and other personal property of Tenant or leasehold improvements, alterations or additions located in the Premises; or (d) upon this transaction or any document to which Tenant is a party creating or transferring any interest of Tenant in this Lease or the Premises. In addition to the foregoing Tenant agrees to pay, before delinquency, any and all taxes levied or assessed against Tenant and which become payable during the team hereof upon Tenant’s equipment, furniture, fixtures and other personal property of Tenant located in the Premises.

29. DEFINED TERMS AND READINGS. The Article headings shown in this Lease are for convenience of reference and shall in no way define, increase, limit or describe the scope or intent of any

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provision of this Lease. Any indemnification or insurance of Landlord shall apply to and inure to the benefit of all the following “Landlord Entities”, being Landlord, Landlord’s investment manager, and the trustees, boards of directors, officers, general partners, beneficiaries, stockholders, employees and agents of each of them. Any option granted to Landlord shall also include or be exercisable by Landlord’s trustee, beneficiary, agents and employees, as the case may be. In any case where this Lease is signed by more than one person, the obligation under this Lease shall be joint and several. The terms “Tenant” and “Landlord” or any pronoun used in place thereof shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and their and each of their respective successors, executors, administrators and permitted assigns, according to the context hereof. The term “rentable area” shall mean the rentable area of the Premises or the Building as calculated by the Landlord on the basis of the plans and specifications of the Building including a proportionate share of any common areas. Tenant hereby accepts and agrees to be bound by the figures for the rentable square footage of the Premises and Tenant’s Proportionate Share shown on the Reference Pages; however, Landlord may adjust either or both figures if there is manifest error, addition or subtraction to the Building or any business park or complex of which the Building is apart, remeasurement or other circumstance reasonably justifying adjustment. The term “Building” refers to the structure in which the Premises are located and the common areas (parking lots, sidewalks, landscaping, etc.) appurtenant thereto. If the Building is part of a larger complex of structures, the team “Building” may include the entire complex, where appropriate (such as shared Expenses or Taxes) and subject to Landlord’s reasonable discretion.

30. TENANT’S AUTHORITY. If Tenant signs as a corporation, partnership, trust or other legal entity each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant has been and is qualified to do business in the state in which the Building is located, that the entity has full right and authority to enter into this Lease, and that all persons signing on behalf of the entity were authorized to do so by appropriate actions. Tenant agrees to deliver to Landlord, simultaneously with the delivery of this Lease, a corporate resolution, proof of due authorization by partners, opinion of counsel or other appropriate documentation reasonably acceptable to Landlord evidencing the due authorization of Tenant to enter into this Lease.

31. FINANCIAL STATEMENTS AND CREDIT REPORTS. At Landlord’s request, Tenant shall deliver to Landlord a copy, certified by an officer of Tenant as being a true and correct copy, of Tenant’s most recent audited financial statement, or, if unaudited, certified by Tenant’s chief financial officer as being true, complete and correct in all material respects. Tenant hereby authorizes Landlord to obtain one or more credit reports on Tenant at any time, and shall execute such further authorizations as Landlord may reasonably require in order to obtain a credit report.

32. COMMISSIONS. Each of the parties represents and warrants to the other that it has not dealt with any broker or finder in connection with this Lease, except as described on the Reference Pages.

33. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its provisions. This Lease shall in all respects be governed by the laws of the state in which the Building is located.

34. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms, covenants and conditions contained in this Lease shall be binding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties to this Lease.

35. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all agreements of the parties to this Lease and supersedes any previous negotiations. There have been no representations made by the Landlord or any of its representatives or understandings made between the parties other than those set forth in this Lease and its exhibits. This Lease may not be modified except by a written instrument duly executed by the parties to this Lease.

36. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a reservation of the Premises. Landlord shall not be bound by this Lease until it has received a copy of this Lease duly executed by Tenant and has delivered to Tenant a copy of this Lease duly executed by Landlord, and until such delivery Landlord reserves the right to exhibit and lease the Premises to other prospective tenants.

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Notwithstanding anything contained in this Lease to the contrary, Landlord may withhold delivery of possession of the Premises from Tenant until such time as Tenant has paid to Landlord any security deposit required by Article 5, the first month’s rent as set forth in Article 3 and any sum owed pursuant to this Lease.

37. RECORDATION. Tenant shall not record or register this Lease or a short form memorandum hereof without the prior written consent of Landlord, and then shall pay all charges and taxes incident such recording or registration.

38. LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building. The obligations of Landlord under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damages.

39. ADA COMPLIANCE. As of the Commencement Date, Landlord represents and warrants that to the best of Landlord’s knowledge, the Building and Premises are in compliance with the requirements of the Americans with Disabilities Act of 1990, as amended, and all regulations issued thereunder (the, “ADA”).

40. BUILDING SEPARATION. After execution of the Early Entry Agreement by Landlord and Tenant and in accordance with its terms, Landlord shall permit Tenant to cap the then-existing distilled water, steam and gas pipes and take such other reasonable action to make a closed system for Tenant.

In the event that the Premises are substantially and physically separated from the other rentable spaces in the Building during the Term, Tenant shall maintain, operate and repair, at no cost to Landlord, the backup electric generator and shall be entitled to collect from the other tenants in the Building that elect to use the backup electric generator, the other tenants’ reasonable share of the cost of such maintenance, operation and repairs based upon the parties’ respective uses. In the event other tenants in the Building elect not to use the backup electric generator, Tenant may, at Tenant’s sole cost and expense, and subject to Landlord’s prior written approval in accordance with Section 6 of this Lease, separate the backup electric generator service from the spaces in the Building occupied by tenants electing not to use it.

LANDLORD:		TENANT:
RREEF AMERICA REIT II CORP. KK,		ALDER BIOPHARMACEUTICALS,
a Maryland corporation		a Delaware corporation
By:	RREEF Management Company,
	a Delaware corporation, Its Manager
By:	/s/ Chris Eckmann	By:	/s/ Randall C. Schatzman
Name.	Chris Eckmann	Name:	Randall Schatzman
Title:	District Manager	Title:	Chief Executive Officer
Dated:	9/21/05	Dated:	09/19/2005

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CORPORATE ACKNOWLEDGMENT

STATE OF WASHINGTON	)
	) ss.
COUNTY OF KING	)

On this as 21^st day of September, 2005 before me, the undersigned, a Notary Public in and for the State of Washington personally appeared Chris Eckmann, to be known or shown through satisfactory evidence to be the District Manager of RREEF Management Company, a Delaware corporation, and acknowledged to me that he executed the same on behalf of said corporation freely and voluntarily for the uses and purposes therein mentioned.

Witness my hand and official seal the day and year in this certificate first above written.

	/s/ Jane L. Alcorn
[SEAL]	Jane L. Alcorn
	Notary Public in and for the State of Washington residing at King county
	My commission expires: February 1, 2009

CORPORATE ACKNOWLEDGMENT

STATE OF WASHINGTON	)
	) ss.
COUNTY OF KING	)

On this as 19 day of September, 2005 before me, the undersigned, a Notary Public in and for the State of Washington personally appeared Randall Schatzman, to be known or shown through satisfactory evidence to be the Chief Executive Officer of Alder Biopharmaceuticals, a Delaware corporation, and acknowledged to me that he executed the same on behalf of said corporation freely and voluntarily for the uses and purposes therein mentioned.

Witness my hand and official seal the day and year in this certificate first above written.

	/s/ Marilyn N. Singer
[SEAL]	Print Name:	Marilyn N. Singer
	Notary Public in and for the State of Washington residing at Everett, WA
	My commission expires: January 22, 2009

ADDENDUM TO LEASE

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

In the event of any conflict between the terms of Addendum to Lease and the Lease, the terms of Addendum to Lease shall control.

RENEWAL OPTION

Tenant shall, provided the Lease is in full force and effect and Tenant is not in default under any of the other terms and conditions of the Lease at the time of notification or commencement, have one option to renew this Lease for a term of three (3) years and one option to renew this Lease for a term of two (2) years, for the portion of the Premises being leased by Tenant as of the date the renewal term is to commence, on the same terms and conditions set forth in the Lease, except as modified by the terms, covenants and conditions as set forth below:

a. If Tenant elects to exercise said option, then Tenant shall provide Landlord with written notice no earlier than the date which is three hundred sixty (360) days prior to the expiration of the then current term of the Lease but no later than the date which is two hundred seventy (270) days prior to the expiration of the then current term of this Lease. If Tenant fails to provide such notice, Tenant shall have no further or additional right to extend or renew the term of the Lease.

b. The Annual Rent and Monthly Installment in effect at the expiration of the then current term of the Lease shall be increased to reflect the current fair market rental for comparable space in the Building and in other similar buildings in the same rental market as of the date the renewal term is to commence, including tenant improvements and leasing commissions, taking into account the specific provisions of the Lease which will remain constant. Landlord shall advise Tenant of the proposed Annual Rent and Monthly Installment for the Premises no later than thirty (30) days after receipt of Tenant’s written request therefor. Said request shall be made no earlier than thirty (30) days prior to the first date on which Tenant may exercise its option under this Paragraph. Said notification of the new Annual Rent may include a provision for its escalation to provide for a change in fair market rental between the time of notification and the commencement of the renewal term. In no event shall the Annual Rent and Monthly Installment for any option period be less than the Annual Rent and Monthly Installment in the preceding period. If Tenant disagrees with Landlord’s proposed Annual Rent and Monthly Installment for the Premises, Tenant shall so advise Landlord in writing and the parties shall promptly meet and attempt in good faith to resolve their differences. If the parties are unable to agree upon such amounts within thirty (30) days of Landlord’s receipt of Tenant’s notice, then Landlord and Tenant shall each appoint an independent, qualified MAI appraiser experienced in appraising rental rates of similarly situated commercial properties, and the two appraises shall appoint a third independent, qualified MAI appraiser with similar experience. The appraisers shall, by the agreement of the majority of them, determine in writing the fair market rental of the Premises and the Annual Rent and Monthly Installment for the upcoming renewal term. Such determination shall be binding upon Landlord and Tenant. The appraisers shall have no power to modify the provisions of this Lease. Each party shall pay the fees and expenses of its respective appraiser and both shall share equally in the fees and expenses of the third appraiser.

c. This option is not transferable; the parties hereto acknowledge and agree that they intend that the aforesaid option to renew this Lease shall be “personal” to Tenant as set forth above and that in no event will any assignee or sublessee have any rights to exercise the aforesaid option to renew.

d. As each renewal option provided for above is exercised, the number of renewal options remaining to be exercised is reduced by one and upon exercise of the last remaining renewal option Tenant shall have no further right to extend the term of the Lease.

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EXHIBIT A – FLOOR PLAN DEPICTING THE PREMISES

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

Premises Address: North Creek Parkway Center, Building 6, 11804 North Creek Parkway, Bothell, WA 98011

Approximate Square Footage of Premises: 16,702 sq. ft.

Exhibit A is intended only to show the general layout of the Premises as of the beginning of the Term of this Lease. It does not in anyway supersede any of Landlord’s rights set forth in Article 17 with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or location. It is not to be scaled; any measurements or distances shown should be taken as approximate.

EXHIBIT A-1 – SITE PLAN

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

Premises Address: North Creek Parkway Center, Building 6, 11804 North Creek Parkway, Bothell, WA 98011

Exhibit A-1 is intended only to show the general layout of the Premises as of the beginning of the Term of this Lease. It does not in anyway supersede any of Landlord’s rights set forth in Article 17 with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or locations. It is not to be scaled; any measurements or distances shown should be taken as approximate.

EXHIBIT A-2 —LEGAL DESCRIPTION

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

LOT 1

THOSE PORTIONS OF LOTS 30 AND 31, QUADRANT BUSINESS PARK – BOTHELL, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 131 OF PLATS, PAGES 87 THROUGH 91, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF LOT 29, SAID PLAT, THENCE NORTH 88°10’00” EAST 238.59 FEET… THENCE SOUTH 28°06’02” EAST 203.07 FEET ALONG SAID NORTHEASTERLY LINE TO THE TRUE POINT OF BEGINNING; THE PARCEL DESCRIBED ABOVE CONTAINS 71,686 SQUARE FEET (1.949 ACRES), MORE OR LESS. SITUATED IN THE CITY OF BOTHELL, KING COUNTY, WASHINGTON.

LOT 2

THAT PORTION OF LOT 31, QUADRANT BUSINESS PARK – BOTHELL, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 131 OF PLATS, PAGES 87 THROUGH 91, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF LOT 29, SAID PLAT, THENCE NORTH 88°19’10” WEST 96.21 FEET ALONG THE SOUTH LINE THEREOF… THENCE SOUTH 28°06’92” EAST 203.70 FEET ALONG SAID NORTHEASTERLY LINE TO THE TRUE POINT OF BEGINNING; THE PARCEL DESCRIBED ABOVE CONTAINS 71,686 SQUARE FEET (1.646 ACRES), MORE OR LESS. SITUATED IN THE CITY OF BOTHELL, KING COUNTY, WASHINGTON.

LOT 3

THOSE PORTIONS OF LOTS 30 AND 31, QUADRANT BUSINESS PARK – BOTHELL, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 131 OF PLATS, PAGES 87 THROUGH 91, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF LOT 29, SAID PLAT, THENCE NORTH 88°19’10” WEST 96.21 FEET ALONG THE SOUTH LINE THEREOF… THENCE SOUTH 88°11’53” EAST 204.14 FEET TO THE TRUE POINT OF BEGINNING; THE PARCEL DESCRIBED ABOVE CONTAINS 101,485 SQUARE FEET (3.330 ACRES), MORE OR LESS. SITUATED IN THE CITY OF BOTHELL, KING COUNTY, WASHINGTON.

LOT 4

THOSE PORTIONS OF LOTS 29 AND 30, QUADRANT BUSINESS PARK – BOTHELL, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 131 OF PLATS, PAGES 87 THROUGH 91, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF LOT 29, THENCE NORTH 88°19’10” WEST 96.21 FEET ALONG THE SOUTH LINE THEREOF TO A POINT HEREINAFTER REFERRED TO AS POINT “A”;… THENCE SOUTH 88°11’53” WEST 204.14 FEET TO THE TRUE POINT OF BEGINNING, THE PARCEL DESCRIBED ABOVE CONTAINS 112,173 SQUARE FEET (2.575 ACRES), MORE OR LESS. SITUATED IN THE CITY OF BOTHELL, KING COUNTY, WASHINGTON.

LOT 5

THOSE PORTIONS OF LOTS 28, 29 AND 30, QUADRANT BUSINESS PARK – BOTHELL, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 131 OF PLATS, PAGES 87 THROUGH 91, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 29, THENCE NORTH 88°19’10” WEST 96.21 FEET ALONG THE SOUTH LINE THEREOF;… THENCE NORTH 88°19’00” WEST 386.21 FEET TO THE TRUE POINT OF BEGINNING; THE PARCEL DESCRIBED ABOVE CONTAINS 80,430 SQUARE FEET (1.846 ACRES), MORE OR LESS. SITUATED IN THE CITY OF BOTHELL, KING COUNTY, WASHINGTON.

LOT 6

THOSE PORTIONS OF LOTS 28 AND 29, QUADRANT BUSINESS PARK – BOTHELL, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 131 OF PLATS, PAGES 87 THROUGH 91, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 29, THENCE NORTH 88°19’10” WEST 96.21 FEET ALONG THE SOUTH LINE THEREOF;… THENCE NORTH 88°19’00” WEST 290.00 FEET ALONG SAID SOUTH LINE TO THE POINT OF BEGINNING; THE PARCEL DESCRIBED ABOVE CONTAINS 92,146 SQUARE FEET (2.115 ACRES), MORE OR LESS. SITUATED IN THE CITY OF BOTHELL, KING COUNTY, WASHINGTON.

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EXHIBIT B – INITIAL ALTERNATIONS

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

I. Tenant Improvements. Landlord shall provide Tenant a Tenant Improvement Allowance (“TIA”) of $12.50 per square foot, or Two Hundred Eight Thousand Seven Hundred Seventy Five & 00/00 ($208,775.00) to be used by Tenant for permanent building standard improvements to all or part of the Premises and for repair and maintenance of equipment and fixtures in the Premises as of the Commencement Date. Tenant shall be required to submit detailed plans to Landlord for Landlord’s written approval of said work prior to any work commencing. Tenant shall be responsible for coordinating Tenant’s architect and contractor and obtaining all required approvals, permits and necessary governmental documentation specific to Tenant’s improvements and use. Landlord shall reimburse Tenant up to TIA amount within 30 days following Landlord’s receipt of Tenant’s invoice for Landlord approved work. Any portion of the TIA not used within eighteen (18) months following the Commencement Date shall be retained by Landlord. Tenant acknowledges that TIA may only be used for permanent building standard improvements to all or part of the Premises and for repair and maintenance of equipment and fixtures in the premises as of the Commencement Date as set forth below or otherwise approved by Landlord in its sole discretion, and which may include, but not be limited to, the actual work, design fees, permitting fees, architectural fees, engineering fees, construction management fees and Washington State sales tax. TIA shall not be used for non-building standard improvements to the Premises such as, but not limited to, Tenant’s moving costs, low voltage cabling, movable office furniture or other fixtures or equipment specific to Tenant’s use that Tenant may or may not remove from Premises after Tenant vacates Premises or fixtures or equipment that is reasonably determined by landlord to not be re-usable by another tenant after Tenant vacates Premises.

Landlord shall not charge a construction management fee for the work done by Tenant provided for in the TIA. Tenant reserves the right to hire, at Tenant’s cost, independent construction management professionals to manage the work provided for in the TIA.

Subject to Tenant’s submittal of detailed plans to Landlord for Landlord’s written approval of said work prior to any work commencing, Landlord hereby approves the following permanent building standard improvements to the Premises and the following repairs to and maintenance of equipment and fixtures:

1. Architectural Modifications:

Demolition of interior office wall common to 2 offices to make 1 large office (same work to be done in 2 different locations)

Janitorial fixing floors and surfaces

Painting

Refinish Epoxy Floors

GC Fees, Labor & OH

Architect Fees

2. Boiler/ Steam/ Glass wash Equipment

Boiler inspection

Steam Piping inspection

Autoclave/ Glass wash inspection

Autoclave/ Glass wash repairs

Sanitation of Glass wash

Startup of Boiler Water Softner

3. DI Water System Retrofitting

Fix Piping

Replace Sensors

4. Gases and Distribution

Engineering, tracing, separation

5. Separation of Services for Occupancy

DI Water Loop

Steam System, cooling water, compressed gases

6. Electrical

Emergency Generator inspection and service

7. Vivarium Room:

Demolition (removal of one lab bench)

Build out

GC Fees, Labor, & OH

II. Landlord’s Work. Tenant acknowledges that Landlord will complete work necessary to demise Premises from the Building (“Landlord’s Work”) after the Lease has commenced and Tenant has occupied Premises. Tenant agrees to not interfere with Landlord’s contractor while Landlord’s Work is underway and to not store any items in the area where Landlord’s Work is being done that would interfere with Landlord’s contractor.

Landlord, at Landlord’s expense, shall demise the Building per code up to the ceiling grid height so as to provide separation between the Premises and the balance of the Building as shown on Exhibit A, repaint the one existing handicap parking symbol on the asphalt directly south of the Premises, install a new beveled threshold with a level change of less than one-half inch verticle, and remove and replace the concrete pad, both adjacent to the main entry door on the south side of the Premises, and install a (i) grab bar, and (ii) a toilet seat 17 to 18 inches from the floor, both in the single-occupancy restroom located adjacent to the main entrance lobby. Tenant shall be responsible for any code related issues resulting from Tenant’s alterations and use.

III. Schedule 7.1 - Landlord Repairs And Improvements

1. HVAC

a. The Building HVAC systems in their entirety shall have a detailed re-commissioning plan implemented for its restart. Commissioning shall include a complete building re-balance. As of Lease Reference Date, said work is substantially complete, with the balance of said work completed prior to Commencement Date.

b. The HVAC systems in their entirety have been evaluated for maintainability both mechanically and electrically. All equipment has been evaluated separately for age or availability of spare parts. Landlord agrees to replace HVAC equipment as described in section 7.1 of the Lease. Additionally, prior to the Commencement Date, Landlord shall, at Landlord’s cost, install a 20 ton HVAC for the sole use and benefit of the Premises.

c. Air handling unit-1 is a sealed unit and has been tested and is working properly.

d. AHU-1 and AHU-2, Lab and Office HVAC units respectively, have been steam cleaned to remove existing mold, spores and other contaminants. Discharge ducting from units have been inspected for mold or other contaminants and no significant mold or contaminants were found.

e. Building HV AC Control system is to be replaced in accordance with Section 7.1 of the Lease. The replacement system shall have at least the same number of points and alarms as the existing system and be provided by a HVAC controls company reasonably approved by Landlord and Tenant prior to work commencing that can also provide spare parts for the system.

2. Fume Exhaust Fans on roof have been inspected and repaired by Landlord’s contractor.

3. Repair of deficiencies caused by prior tenant:

BL3 Lab in SE portion of building previously had ducted hoods that were removed from room and ceiling was repaired leaving no exhaust source for room. Exhaust grills and balancing dampers shall be installed and sized to match balancing requirements of room.

4. All electric light bulbs, tubes and ballasts, and battery packs for emergency lighting in non-working condition or missing as of the Reference Date shall be repaired, replaced, or installed prior to the Lease Commencement Date.

5. Repair of boiler exhaust.

LANDLORD SHALL NOT BE OBLIGATED TO PERFORM ANY OTHER WORK TO THE PREMISES OTHER THAN DESCRIBED ABOVE OR IN THE LEASE; TENANT SHALL BE RESPONSIBLE FOR ALL OTHER IMPROVEMENTS. THE LANDLORD MAKES NO REPRESENTATION AS TO THE SUITABILITY OF THE PREMISES FOR TENANT’S USE. LANDLORD SHALL BE RESPONSIBLE TO DELIVER THE PREMISES ON THE COMMENCEMENT DATE IN COMPLIANCE WITH APPLICABLE FEDERAL, STATE, AND LOCAL LAWS, CODES, AND ORDINANCES, EXCEPT THAT TENANT SHALL BE RESPONSIBLE FOR MAKING CORRECTIONS OR IMPROVEMENTS TO THE PREMISES AS ARE REQUIRED TO COMPLY WITH SUCH LAWS, CODES, AND ORDINANCES WHICH ARISE OUT OF TENANT’S INSTALLATION OF TENANT IMPROVEMENTS OR OTHER ALTERATIONS OR ADDITIONS INSTALLED BY TENANT PURSUANT TO THE EARLY ENTRY AGREEMENT. ON AND AFTER THE COMMENCEMENT DATE, TENANT SHALL BE RESPONSIBLE FOR COMPLIANCE OF THE PREMISES WITH APPLICABLE FEDERAL, STATE, AND LOCAL LAWS, CODES, AND ORDINANCES PERTAINING TO TENANT’S USE OF THE PREMISES, TENANT’S INSTALLATION OF TENANT IMPROVEMENTS OR OTHER ALTERATIONS OR ADDITIONS INSTALLED BY TENANT.

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EXHIBIT C – COMMENCEMENT DATE MEMORANDUM

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

COMMENCEMENT DATE MEMORANDUM

THIS MEMORANDUM, made as of             , 20    , by and between                      (“Landlord”) and                      (“Tenant”).

Recitals:

A. Landlord and Tenant are parties to that certain Lease, dated for reference             , 20            (the “Lease”) for certain premises (the “Premises”) consisting of approximately             square feet at the building commonly known as                     .

B. Tenant is in possession of the Premises and the Term of the Lease has commenced.

C. Landlord and Tenant desire to enter into this Memorandum confirming the Commencement Date, the Termination Date and other matters under the Lease.

NOW, THEREFORE, Landlord and Tenant agree as follows:

1. The actual Commencement Date is                     .

2. The actual Termination Date is                     .

3. The schedule of the Annual Rent and the Monthly Installment of Rent set forth on the Reference Pages is deleted in its entirety, and the following is substituted therefor:

[insert rent schedule]

4. Capitalized terms not defined herein shall have the same meaning as set forth in the Lease.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.

LANDLORD:		TENANT:
By:	RREEF Management Company, a Delaware corporation
By:	DO NOT SIGN		By:	DO NOT SIGN
Name:				Name:
Title:				Title:
Dated:				Dated:

EXHIBIT D – RULES AND REGULATIONS

attached to and made a part of Lease bearing the

Lease Reference Date of August 5, 2005 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, a Delaware corporation, as Tenant

1. No sign, placard, picture, advertisement, name or notice (collectively referred to as “Signs”) shall be installed or displayed on any part of the outside of the Building without the prior written consent of the Landlord which consent shall be in Landlord’s sole, discretion. All approved Signs shall be printed, painted, affixed or inscribed at Tenant’s expense by a person or vendor approved by Landlord and shall be removed by Tenant at Tenant’s expense upon vacating the Premises. Landlord shall have the right to remove any Sign installed or displayed in violation of this rule at Tenant’s expense and without notice.

2. If Landlord objects in writing to any curtains, blinds, shades or screens attached to or hung in or used in connection with any window or door of the Premises or Building, Tenant shall immediately discontinue such use. No awning shall be permitted on any part of the Premises except in Tenant’s own truck dock area. Prior to awning installation, Tenant shall obtain the prior written consent of Landlord Tenant shall not place anything or allow anything to be placed against or near any glass partitions or doors or windows which may appear unsightly, in the reasonable opinion of Landlord, from outside the Premises.

3. Tenant shall not alter any lock or other access device or install a new or additional lock or access device or bolt on any door of its Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed. Tenant may make copies of Tenant’s keys, including Tenant’s master key and internal door keys, as it deems necessary or advisable in connection with its use or occupancy of the Premises. Tenant, upon the termination of its tenancy, shall deliver to Landlord the keys or other means of access to all doors.

4. If Tenant requires telephone, data, burglar alarm or similar service, the cost of purchasing, installing and maintaining such service shall be borne solely by Tenant. Tenant may bore or cut for wires if such wiring is installed in accordance with national low voltage codes; provided, however, that no boring or cutting for wires requiring external shell wiring penetrations through non-Tenant spaces will be allowed without the prior written consent of Landlord. The location of burglar alarms, telephones, call boxes or other office equipment affixed to the Premises shall be subject to the prior written approval of Landlord.

5. Tenant shall not place a load upon any floor of its Premises, including mezzanine area, if any, which exceeds the load per square foot that such floor was designed to carry and that is allowed by law. Heavy objects shall stand on such platforms as determined by Landlord to be necessary to properly distribute the weight Landlord will not be responsible for loss of or damage to any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

6. Tenant shall not install any radio or television antenna, satellite dish, loudspeaker or other device on the roof or exterior walls of the Building without Landlord’s prior written consent which consent shall be in Landlord’s sole discretion

7. Tenant shall not mark, drive nails, screw or drill into the partitions, woodwork, plaster or drywall (except for pictures and general office uses) or in any way deface the Premises or any part thereof. Tenant shall not affix any floor covering to the floor of the Premises or paint or seal any floors in any manner except as approved by Landlord; provided, however, that Tenant may coat; seal, or paint floors and walls consistent with existing treatments, finishes, or industry standards for laboratory or manufacturing spaces. Tenant shall repair any damage resulting from noncompliance with this rule.

8. No cooking shall be done or permitted on the Premises, except that Underwriters’ Laboratory approved microwave ovens or equipment for brewing coffee, tea, hot chocolate and similar beverages shall be permitted, provided that such equipment and use is in accordance with all applicable federal, state and city laws, codes ordinances, rules and regulations.

9. Tenant may use pallet jacks. Tenant shall not use any hand trucks except those equipped with the rubber tires and side guards, and may use such other material handling equipment as Landlord may approve. Tenant shall not bring any other vehicles of any kind into the Building Forklifts which operate on asphalt areas shall only use tires that do not damage the asphalt.

10. Tenant shall not use the name of the Building or any photograph or other likeness of the Building in connection with or in promoting or advertising Tenant’s business without the prior written consent of Landlord except that Tenant may include the Building name in Tenant’s address and a picture of the Building reasonably acceptable to Landlord, on its website. Landlord shall have the right, exercisable without notice and without liability to any tenant, to change the name and address of the Building.

11. All trash and refuse shall be contained in suitable receptacles at locations approved by Landlord Tenant shall not place in the trash receptacles any personal trash or material that cannot be disposed of in the ordinary and customary manner of removing such trash without violation of any law or ordinance governing such disposal.

12. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governing authority.

13. Tenant assumes all responsibility for securing and protecting its Premises and its contents including keeping doors locked and other means of entry to the Premises closed.

14. Tenant shall not use any method of heating or air conditioning other than that supplied by Landlord without Landlord’s prior written consent.

15. No person shall go on the roof without Landlords permission, however, as reasonably necessary, Landlord will provide access to the roof to Tenant’s qualified vendors to inspect mechanical equipment affecting the safety of Tenants employees, agents, clients, customers, invitees or guests or that could reasonably impact Tenant’s laboratory or manufacturing process, including the fume exhaust fans, so long as Tenant’s vendor has provided Landlord with evidence of insurance as specified in the Lease.

16. Except in connection with Tenants business and as permitted by applicable law, Tenant shall not permit any animals, other than seeing-eye dogs to be brought or kept in or about the Premises or any common area of the property.

17. Tenant shall not permit any motor vehicles to be washed or mechanical work or maintenance of motor vehicles to be performed on any portion of the Premises or parking lot.

18. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of any premises in the Building Landlord may waive any one or more of these Rules and Regulations for the benefit of any tenant or tenants, and any such waiver by Landlord shall not be construed as a waiver of such Rules and Regulations for any or all tenants.

19. Subject to Section 16, Landlord reserves the right to make such other and reasonable rules and regulations as in its judgment may from time to time be needed for safety and security, for care and cleanliness of the Building and for the preservation of good order in and about the Building Tenant agrees to abide by all such rules and regulations herein stated and any additional rules and regulations which are adopted in accordance with the Lease. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s employees, agents, clients, customers, invitees and guests.

20. Any toilet rooms, toilets, -urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown into them. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees or invitees, shall have caused it.

21. Tenant shall not permit smoking or carrying of lighted cigarettes or cigars in areas reasonably designated by Landlord or any applicable governmental agencies as non-smoking areas.

22. Any directory of the Building or project of which the Building is a part (“Project Area”), if provided, will be exclusively for the display of the name and location of tenants only and Landlord reserves the right to charge for the use thereof and to exclude any other names.

23. Canvassing soliciting distribution of handbills or any other written material in the Building or Project Area is prohibited and each tenant shall cooperate to prevent the same. No tenant shall solicit business from other tenants or permit the sale of any goods or merchandise in the Building or Project Area without the written consent of Landlord.

24. Any equipment belonging to Tenant which causes noise or vibration that may be transmitted to the structure of the Building or to any space therein to such a degree as to be objectionable to Landlord or to any tenants in the Building shall be placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators or other devices sufficient to eliminate the noise or vibration.

25. Driveways, sidewalks, halls, passages, exits, entrances and stairways (“Access Areas”) shall not be obstructed by tenants or used by tenants for any purpose other than for ingress to and egress from their respective premises. Access areas are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence, in the judgment of Landlord, shall be prejudicial to the safety, character, reputation and interests of the Building or its tenants.

26. Landlord reserves the right to designate the use of parking areas and spaces, provided that all parking spaces shall be in the parking areas and spaces immediately adjacent to the Building Tenant shall not park in visitor, reserved, or unauthorized parking areas. Tenant and Tenant’s guests shall park between designated parking lines only and shall not park motor vehicles in those areas designated by Landlord for loading and unloading Vehicles in violation of the above shall be subject to being towed at the vehicle owner’s expense. Vehicles parked overnight will be at the sole risk of the owners of such vehicles. Tenant will from time to time, upon the request of Landlord, supply Landlord with a list of license plate numbers of vehicles owned or operated by its employees or agents.

27. No trucks, tractors or similar vehicles can be parked anywhere other than in Tenant’s own truck dock area Tractor-trailers which must be unhooked or parked with dolly wheels beyond the concrete loading areas must use steel plates or wood blocks under the dolly wheels to prevent damage to the asphalt paving surfaces. No parking or storing of such trailers will be permitted in the parking areas or on streets adjacent thereto. Notwithstanding the foregoing, in connection with any Alteration of the Premises and subject to Landlords prior written approval which shall not be unreasonably withheld, Tenant may locate material trailers in an area that will neither obstruct the use by the other tenants of the Building of their respective premises, nor be visible from the main access road, nor block any fire lanes.

28. During periods of loading and unloading, Tenant shall not unreasonably interfere with traffic flow and loading and unloading areas of other tenants. All products, materials or goods must be stored within the Tenant’s Premises and not in any exterior areas, including but not limited to, exterior dock platforms, against the exterior of the Building parking areas and driveway areas. Tenant agrees to keep the exterior of the Premises clean and free of nails, wood, pallets, packing materials, barrels and any other debris produced from their operation.

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EX-10.13

EXHIBIT 10.13

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (the “Amendment”), is dated the 1st day of February, 2008 (the “Effective Date”), between RREEF AMERICA REIT II CORP. KK, a Maryland corporation (“Landlord”) and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), for the premises located in the City of Bothell, County of King, State of Washington, commonly known as North Creek Parkway Center, Building 6, 11804 North Creek Parkway, Bothell, WA 98011 (the “Premises”).

W I T N E S S E T H:

WHEREAS, Landlord and Tenant, entered into that certain Lease dated August 5, 2005 (hereinafter collectively referred to as the “Lease”) ; and

WHEREAS, Landlord and Tenant desire to amend the Lease as more fully set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS. Unless otherwise specifically set forth herein, all capitalized terms herein shall have the same meaning as set forth in the Lease.

2. AMENDMENT COMMENCEMENT DATE. The commencement date of certain amendments to this Lease as set forth in this Amendment (the “Amendment Commencement Date”) shall be June 1, 2008. Tenant shall have the right to occupy the office portion of the Expansion Area (3,894 sq. ft.) and Tenant shall begin paying rent for the office portion of the Expansion Area per a separate Temporary Use Agreement.

3. EXPANSION. From and after the Amendment Commencement Date, the Premises Rentable Area shall be approximately 25,440 sq. ft., which includes approximately 8,738 sq. ft. (3,894 sq. ft. of office and 4,844 sq. ft. of laboratory space) (the “Expansion Area”), constituting all of Building 6, 11804 North Creek Parkway. The Premises, including the Expansion Area, are shown and outlined on the attached Exhibit A.

4. TENANT’S PROPORTIONATE SHARE. From and after the Amendment Commencement Date, Tenant’s Proportionate Share shall be 12.37% of the total Property. Tenant’s share of Building 6 is 100%.

Page 1 of 5

5. ANNUAL RENT and MONTHLY INSTALLMENT OF RENT (Article 3). Upon the Amendment Commencement Date, the Annual Rent and Monthly Installment of Rent is hereby amended and replaced in its entirety as follows:

Period		Rentable Square Footage	Annual Rent Per Square Foot		Annual Rent		Monthly Installment of Rent
from	through
6/1/2008	6/30/2008	25,440	$	14.54	$	369,948.00	$	30,829.00
7/1/2008	12/31/2008	25,440	$	22.64	$	575,988.00	$	47,999.00
1/1/2009	12/31/2009	25,440	$	23.07	$	586,848.00	$	48,904.00
1/1/2010	12/31/2010	25,440	$	23.77	$	604,740.00	$	50,395.00
1/1/2011	1/31/2011	25,440	$	24.48	$	622,812.00	$	51,901.00

6. INITIAL ESTIMATED MONTHLY INSTALLMENT OF RENT ADJUSTMENTS (Article 4). From and after the Amendment Commencement Date, the following sentences are hereby added to the Initial Estimated Monthly Installment of Rent Adjustments (Article 4):

Separate from and in addition to Tenant’s Proportionate Share of Expenses and Taxes, Landlord shall separately bill Tenant and Tenant shall pay all janitorial and utility costs attributable to the Premises. For avoidance of doubt, these separate payments represent Tenant’s 100% share of such expenses attributable to Building 6.

7. ADDITONAL SECURITY DEPOSIT AND PREPAYMENT OF RENT. On the Effective Date, Tenant shall provide an additional security deposit in the amount of $17,170.00 (Seventeen Thousand, One Hundred Seventy Dollars and No/100), the sum of which is equal to the first month base rent applicable to the Expansion Area, in cash or letter of credit in a form acceptable to Landlord. Tenant shall also prepay the first monthly installment of rent applicable to the Expansion Area plus Tenant’s related Proportionate Share of Expenses and Taxes.

8. TENANT IMPROVEMENTS. Landlord shall cause to be constructed the improvements desired by Tenant in the Expansion Area as per the attached space plan shown on the attached Exhibit B. Landlord shall provide a Tenant Improvement Allowance (“TIA”) equal to $7.00 per rentable square foot of the Expansion Area to be applied towards the Remodel Cost. If the Remodel Cost is reasonably expected to exceed the TIA, Landlord may require, as a condition of proceeding with the improvements, that Tenant deposit with Landlord an amount equal to the expected amount needed and Landlord may apply such deposit to pay the Remodel Cost. On the Effective Date, Tenant shall have access to and may occupy the Expansion Area so long as such occupancy does not interfere with the construction work to be performed by Landlord.

9. HVAC. Landlord, in accordance with Tenant’s mechanical engineers specifications and at Landlord’s sole cost, shall replace HVAC units 10 and 11, which service the lab portion of the Expansion Area, with HVAC units of comparable capacity and quality.

10. PARKING. Upon the Amendment Commencement Date, Section 1.3 of the lease is hereby amended and replaced in its entirety as follows:

Tenant and the Tenant Entities will be entitled to the nonexclusive use of the common areas of the Building as they exist from time to time during the Term, including the parking facilities, subject to Landlord’s rules and regulations regarding such use. In addition, Landlord shall provide to Tenant and Tenant entities, and they shall have the right to use and occupy sixty-two (62) parking stalls in the Building parking lot. The foregoing shall not be deemed to provide Tenant with an exclusive right to any parking spaces or any guaranty of the availability of any particular parking spaces.

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11. SIGNAGE. From and after the Amendment Commencement Date, notwithstanding any contrary terms in the Rules and Regulations, Tenant shall have the right to display on or in Building 6 (including Building 6’s common areas) all manner of available signage, including building and suite entrance signage, provided it is in compliance with the Bothell City Municipal Code, subject to Landlord’s approval and consent, and the Bothell Business Parks’ Architectural Committee approval.

12. TENANT’S AUTHORITY (OFAC). On the Effective Date, Article 31. Tenant’s Authority, as stated in the Lease, shall be deleted in its entirety and the following substituted therefore:

If Tenant signs as a corporation, partnership, trust or other legal entity each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant has been and is qualified to do business in the state in which the Building is located, that the entity has full right and authority to enter into this Lease, and that all persons signing on behalf of the entity were authorized to do so by appropriate actions. Tenant agrees to deliver to Landlord, simultaneously with the delivery of this Lease, a corporate resolution, proof of due authorization by partners, or other appropriate documentation reasonably acceptable to Landlord evidencing the due authorization of Tenant to enter into this Lease.

Tenant hereby represents and warrants that neither Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an Event of Default will be deemed to have occurred, without the necessity of notice to Tenant.

13. INSURANCE. On the Effective Date, Article 11. Insurance, as stated in the Lease, shall be deleted in its entirety and the following substituted therefore:

Tenant shall keep in force throughout the Term: (a) a Commercial General Liability insurance policy or policies to protect the Landlord Entities against any liability to the public or to any invitee of Tenant or a Landlord Entity incidental to the use of or resulting from any accident occurring in or upon the Premises with a limit of not less than $1,000,000 per occurrence and not less than $2,000,000 in the annual aggregate, or such larger amount as Landlord may prudently require from time to time, covering bodily injury and property damage liability and $1,000,000 products/completed operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident; (c) Workers’ Compensation Insurance with limits as required by statute and Employers Liability with limits of

Page 3 of 5

$500,000 each accident, $500,000 disease policy limit, $500,000 disease—each employee; (d) All Risk or Special Form coverage protecting Tenant against loss of or damage to Tenant’s alterations, additions, improvements, carpeting, floor coverings, panelings, decorations, fixtures, inventory and other business personal property situated in or about the Premises to the full replacement value of the property so insured; and, (e) Business Interruption Insurance with limit of liability representing loss of at least approximately six (6) months of income.

The aforesaid policies shall (a) be provided at Tenant’s expense; (b) name the Landlord Entities as additional insureds (General Liability) and loss payee (Property—Special Form); (c) be issued by an insurance company with a minimum Best’s rating of “A-:VII” during the Term; and (d) provide that said insurance shall not be canceled unless thirty (30) days prior written notice (ten days for non-payment of premium) shall have been given to Landlord; a certificate of Liability insurance on ACORD Form 25 and a certificate of Property insurance on ACORD Form 28 shall be delivered to Landlord by Tenant upon the Commencement Date and at least thirty (30) days prior to each renewal of said insurance.

Whenever Tenant shall undertake any alterations, additions or improvements in, to or about the Premises (“Work”) the aforesaid insurance protection must extend to and include injuries to persons and damage to property arising in connection with such Work, without limitation including liability under any applicable structural work act, and such other insurance as Landlord shall require; and the policies of or certificates evidencing such insurance must be delivered to Landlord prior to the commencement of any such Work.

14. RENEWAL OPTION. From and after the Amendment Commencement Date, the terms of the Renewal Option in the Addendum to Lease shall apply to all of the Premises, including the Expansion Area.

15. REAL ESTATE COMMISSION. The parties hereby acknowledge The Staubach Company represents Tenant in this transaction. Landlord, at Landlord’s sole cost and expense shall pay The Staubach Company any leasing commission due in accordance with the separate agreement between Landlord and The Staubach Company.

16. INCORPORATION. Except as modified herein, all other terms and conditions of the Lease between the parties above described, as attached hereto, shall continue in full force and effect.

17. LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against Landlord under this Amendment and the Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building. The obligations of Landlord under this Amendment and the Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damages.

Page 4 of 5

IN WITNESS WHEREOF, Landlord and Tenant have executed the Amendment as of the day and year first written above.

LANDLORD:		TENANT:
RREEF AMERICA REIT II CORP. KK, a Maryland corporation		ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation
By:	RREEF Management Company, a Delaware corporation, its Manager
By:	/s/ Chris Eckmann	By:	/s/ Randall C. Schatzman
Name:	Chris Eckmann	Name:	Randall Schatzman
Title:	Vice President — District Manager	Title:	Chief Executive Officer
Dated:	2/8/08	Dated:	Feb 3, 2008

Page 5 of 5

CORPORATE ACKNOWLEDGMENT

STATE OF WASHINGTON	)
	) ss
COUNTY OF KING	)

On this 8^th day of February, 2008 before me, the undersigned, a Notary Public in and for the State of Washington, personally appeared Chris Eckmann, to be known or shown through satisfactory evidence to be the Vice President—District Manager of RREEF Management Company, a Delaware corporation, and acknowledged to me that he executed the same on behalf of said corporation freely and voluntarily for the uses and purposes therein mentioned.

Witness my hand and official seal the day and year i this certificate first above written.

	/s/ Karin Schoenleber
	Karin Schoenleber
[SEAL]	Residing at King County
	My commission expires: March 19, 2010

CORPORATE ACKNOWLEDGMENT

STATE OF WASHINGTON	)
	) ss
COUNTY OF KING	)

On this 3 day of February, 2008 before me, the undersigned, a Notary Public in and for the State of Washington personally appeared Randall Schatzman, to be known or shown through satisfactory evidence to be the Chief Executive Officer, of Alder Biopharmaceuticals, a Delaware corporation, and acknowledged to me that he executed the same on behalf of said corporation freely and voluntarily for the uses and purposes therein mentioned.

Witness my hand and official seal the day and year in this certificate first above written.

	/s/ Marilyn N. Singer
	Print Name:	Marilyn N. Singer
[SEAL]	Notary Public in and for the State of Washington residing at Snohomish County
	My commission expires: January 22, 2009

EXHIBIT A — FLOOR PLAN DEPICTING THE PREMISES / EXPANSION

attached to and made a part of First Amendment bearing the

First Amendment Reference Date of February 1, 2008 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant

Expansion Area Address: Building 6 - 11804 North Creek Parkway, Bothell, WA 98011

Approximate Square Footage of Premises: 25,440 SF

Exhibit A is intended only to show the general layout of the Premises as of the beginning of the Term of this Lease. It does not in any way supersede any of Landlord’s rights set forth in Article 17 with respect to arrangements and/or locations of public parts of the building and changes in such arrangements and/or locations. It is not to be scaled; any measurements or distances shown should be taken as approximate.

EXHIBIT B — LANDLORD’S WORK

Page 1 of 3

attached to and made a part of First Amendment bearing the

First Amendment Reference Date of February I, 2008 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant

Landlord shall provide a Tenant Improvement Allowance of $7.00 (Seven Dollars) per Rentable Square Foot to be used toward improvements to the premises as highlighted in red per the mutually agreeable space plan below.

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EXHIBIT B LANDLORD’S WORK

Page 2 of 3

attached to and made a part of First Amendment bearing the

First Amendment Reference Date of February 1, 2008 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

EXHIBIT B — LANDLORD’S WORK

Page 3 of 3

attached to and made a part of First Amendment bearing the

First Amendment Reference Date of February 1, 2008 between

RREEF AMERICA REIT II CORP. KK, a Maryland corporation, as Landlord and

ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant

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EX-10.14

EXHIBIT 10.14

SECOND AMENDMENT TO LEASE

This Second Amendment to Lease (this “Second Amendment”) is made and entered into by and between KBS NORTH CREEK, LLC, a Delaware limited liability company (“Landlord”), as successor-in-interest to RREEF America REIT II Corp. KK, a Maryland corporation (“Original Landlord”), and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), and shall be effective for all purposes as of the date that this Second Amendment is fully executed (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, Landlord and Tenant are parties to that certain Lease dated August 5, 2005 originally entered into by and between Original Landlord and Tenant (“Original Lease”), as amended by that certain First Amendment to Lease dated February 1, 2008 (“First Amendment”) (the Original Lease, as amended by the First Amendment, being hereinafter known as the “Lease”), pursuant to which Tenant leases from Landlord certain premises containing 25,440 square feet of space (the “Existing Premises”) in the building located at 11804 North Creek Parkway S, Building 6, Bothell, WA 98011 (the “Building 6”), which is part of that certain building complex known as the North Creek Parkway Center, consisting of six buildings with a total of approximately 205,707 square feet of space located at 18912, 18916, 18804, 18702, 18706, and 11804 North Creek Parkway, Bothell, Washington (the “Building Complex”); and

WHEREAS, the current Term of the Lease expires on January 31, 2011; and

WHEREAS, Landlord and Tenant desire to expand the Existing Premises, extend the Term and further amend the Lease as more particularly described hereinbelow;

NOW, THEREFORE, pursuant to the foregoing, and in consideration of the mutual covenants and agreements contained herein and in the Lease, the receipt and sufficiency of which are hereby acknowledged, the Lease is hereby amended as follows:

1. Defined Terms. All capitalized terms used herein shall have the same meaning as defined in the Lease, unless otherwise defined in this Second Amendment.

2. Extension of Term. Landlord and Tenant hereby agree to extend the Term of the Lease commencing on September 15, 2010 (the “Extension Term Commencement Date”) and continuing through and expiring on January 31, 2014 (the “Extension Term”), upon and subject to all of the existing terms of the Lease, except as otherwise hereinafter provided.

3. Expansion. As of the later of (i) October 1, 2010 or (ii) the Substantial Completion (defined in Exhibit C hereto) of the Expansion Improvements (defined below) (such later date being the “Expansion Commencement Date”), the Existing Premises shall be expanded to include that certain 11,214 square feet of office space on the second floor of the 18702 North Creek Parkway S, Building 4, Bothell, WA 98011 (“Building 4”), such space being more particularly described on Exhibit A hereto (the “Expansion Space”). Following the Expansion Commencement Date, the term “Premises” shall mean the Existing Premises and the Expansion Space and shall consist of 36,654 square feet of space in Building 6 and Building 4 of the Building Complex. The Premises is more particularly described on Exhibit B hereto. Building 6 and Building 4 shall hereinafter be collectively known as the “Buildings”.

4. Annual Rent for Existing Premises. Tenant shall continue to pay Annual Rent in accordance with the terms and conditions of the Lease; provided, however, commencing on the Extension Term Commencement Date and continuing throughout the remainder of the Extension Term, Tenant shall pay Annual Rent for the Existing Premises as set forth in the table below:

Period	Monthly Installment		Rate/rsf/annum
Extension Term Commencement Date - 12/31/2010 (inclusive)	$	50,392.40	$	23.77NNN
1/01/2011 - 1/31/2011 (inclusive)	$	51,897.60	$	24.48NNN
2/01/2011 - 1/31/2012 (inclusive)	$	41,340.00	$	19.50NNN
2/01/2012 - 1/31/2013 (inclusive)	$	42,400.00	$	20.00NNN
2/01/2013 - 1/31/2014 (inclusive)	$	43,460.00	$	20.50NNN

5. Annual Rent for Expansion Space. Commencing on the Expansion Commencement Date and continuing throughout the remainder of the Extension Term, Tenant shall pay Annual Rent for the Expansion Space as set forth in the table below:

Period	Monthly Installment		Rate/rsf/annum
Expansion Commencement Date to 1/31/2012 (inclusive)	$	14,484.75	$	15.50NNN
2/01/2012 - 1/31/2013 (inclusive)	$	14,952.00	$	16.00NNN
2/01/2013 - 1/31/2014 (inclusive)	$	15,419.25	$	16.50NNN

6. Security Deposit. Tenant currently has deposited with Landlord the sum of $112,370.00 in the form of a letter of credit as a security deposit under the Lease (“Security Deposit”). Accordingly, Tenant agrees to maintain the Security Deposit with Landlord for the remainder of the Extension Term either in a letter of credit or with a cash deposit.

7. Condition of Existing Premises. Except as otherwise set forth in this Paragraph 7, Landlord has heretofore delivered the Existing Premises to Tenant, and Tenant has and hereby agrees to accept the Existing Premises in its existing “AS-IS”, “WHERE-IS” and “WITH ALL FAULTS” condition, and Landlord shall have no obligation whatsoever to refurbish or otherwise improve the Existing Premises at any time through the expiration of the Extension Term.

8. Condition of Expansion Space. Except as otherwise set forth in this Paragraph 8, effective on and as of the Expansion Commencement Date, Landlord shall deliver the Expansion Space to Tenant, and Tenant agrees to accept the Expansion Space in its existing “AS-IS”, “WHERE-IS” and “WITH ALL FAULTS” condition and Landlord shall have no obligation whatsoever to refurbish or otherwise improve the Existing Premises and/or the Expansion Space throughout the remainder of the Term of the Lease. Notwithstanding the foregoing, Landlord shall (a) deliver the Expansion Space in good working order and condition, including, without limitation, all mechanical, electrical, lighting, plumbing, drainage, and life safety systems, (b) complete, at Landlord’s sole cost and expense, on or before December 31, 2010, the repairs and replacements in connection with the Building 4 HVAC system, as set forth in that certain letter to Tenant, dated as of July 20, 2010, a copy of which is attached hereto as Exhibit F, and (c); provided, however, subject to the terms of Exhibit C attached hereto, provide Tenant with an improvement allowance of up to Four Hundred and Thirty-Nine Thousand, Eight Hundred Forty-Eight and No/100 Dollars ($439,848.00) ($12.00 per square foot of space contained in the Existing Premises and the Expansion Space) (the “Expansion Allowance”) to be applied to the cost of performing the Expansion Improvements (as said term is defined on Exhibit C attached hereto) in the Existing Premises and/or the Expansion Space in accordance with and subject to the terms of said Exhibit C. Landlord and Tenant further acknowledge and agree that the tenant improvement

2

allowance and improvements in the Existing Premises as set forth in Paragraph 8 of the First Amendment have been completed and satisfied and that such provisions are hereby deleted in their entirety and are of no further force and effect.

9. Tenant’s Proportionate Share of Expenses and Taxes. Tenant shall continue to pay for Tenant’s Proportionate Share of Expenses and Taxes, in accordance with Article 4 of the Lease, throughout the Extension Term; provided, however, from and after the Expansion Commencement Date and continuing through the remainder of the Extension Term, for purposes of calculating Tenant’s Proportionate Share of Expenses and Taxes, Tenant’s Proportionate Share shall be (i) 17.82% of the Building Complex, (ii) 100% of Building 6, and (iii) 18.80% of Building 4.

10. Parking. Effective on and as of the Expansion Commencement Date, the Lease shall be revised to provide that, in addition to the current parking stipulated in Lease, Landlord shall make available to Tenant an additional thirty-six (36) parking spaces (being 3.18 parking spaces per 1,000 square feet of space contained within the Expansion Space), such spaces being uncovered, unreserved surface parking spaces, at no additional charge to Tenant throughout the remainder of the Extension Term.

11. One Renewal Option at Market. Landlord hereby grants to Tenant one option to renew the Term of the Lease for an additional three (3) years (following the expiration of the Extension Term) in accordance with and subject to the terms and conditions of Exhibit D attached hereto and incorporated herein for all purposes.

12. Right of First Offer. Landlord hereby grants to Tenant a right of first offer to lease any space in Building 4 in accordance with and subject to the terms and conditions of Exhibit E attached hereto and incorporated herein for all purposes.

13. Deleted Provisions. Landlord and Tenant hereby agree that the Addendum to Lease attached to the Lease shall be deleted in its entirety and of no further force or effect.

14. Brokers. Landlord and Tenant each warrant that it has had no dealings with any broker or agent other than Pacific Real Estate Partners, Inc. and Jones Lang LaSalle (collectively, the “Brokers”) in connection with the negotiation or execution of this Second Amendment, and each of Landlord and Tenant agrees to indemnify and hold harmless the other party from and against any and all costs, expenses, or liability for commissions or other compensations or charges claimed by any broker or agent, other than the Brokers, with respect to this Second Amendment.

15. Miscellaneous. With the exception of those terms and conditions specifically modified and amended herein, the herein referenced Lease shall remain in full force and effect in accordance with all its terms and conditions. In the event of any conflict between the terms and provisions of this Second Amendment and the terms and provisions of the Lease, the terms and provisions of this Second Amendment shall supersede and control.

16. Counterparts/Facsimiles. This Second Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of such counterparts shall constitute one agreement. To facilitate execution of this Second Amendment, the parties may execute and exchange telefaxed or e-mailed counterparts of the signature pages and such counterparts shall serve as originals.

[SIGNATURE PAGE TO FOLLOW]

3

SIGNATURE PAGE TO SECOND AMENDMENT TO LEASE

BY AND BETWEEN KBS NORTH CREEK, LLC, AS LANDLORD,

AND ALDER BIOPHARMACEUTICALS, INC., AS TENANT

IN WITNESS WHEREOF, Landlord and Tenant, acting herein by duly authorized individuals, have caused these presents to be executed, effective as of the Effective Date set forth herein.

LANDLORD:
KBS NORTH CREEK, LLC, a Delaware limited liability company
By:	KBS Capital Advisors, LLC,
	a Delaware limited liability company,
	its authorized agent
	By:	/s/ Steven Silva
		Steven A. Silva,
		Senior Vice President
	Date:	Sept. 23, 2010
TENANT:
ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation
By:	/s/ Randall C. Schatzman
Name:	Randall C. Schatzman
Title:	President & CEO
Date:	September 20th, 2010

Signature Page

STATE OF CALIFORNIA	)
	)ss.
COUNTY OF SAN FRANCISCO	)

I certify that I know or have satisfactory evidence that Steven A. Silva is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the Senior Vice President of KBS Capital Advisors, LLC, a Delaware limited liability company, as the authorized agent of KBS North Creek, LLC, a Delaware limited liability company, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated:	9/24/10
	/s/ Marcus J. Howard
	(Signature)	[SEAL]
	Marcus J. Howard
	(Print Name)
	Notary Public, in and for the State of California, residing at San Francisco
	My Commission Expires 7/13/13

STATE OF WASHINGTON	)
	)ss.
COUNTY OF KING	)

I certify that I know or have satisfactory evidence that Randall C. Schatzman is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the President & CEO of ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated:	Sept. 20, 2010
	/s/ Marilyn N. Singer
	(Signature)	[SEAL]
	Marilyn N. Singer
	(Print Name)
	Notary Public, in and for the State of California, residing at Everett, WA
	My Commission Expires January 22, 2013

Signature Page

EXHIBIT A

EXPANSION SPACE

A-1

EXHIBIT B

SITE PLAN FOR PREMISES

B-1

B-2

EXHIBIT C

WORK LETTER

THIS WORK LETTER is attached as Exhibit C to the Second Amendment between KBS NORTH CREEK, LLC, a Delaware limited liability company, as Landlord, and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant, and constitutes the further agreement between Landlord and Tenant as follows:

1. Expansion Improvements. Landlord agrees to furnish or perform those items of construction and those improvements in the Premises and the Expansion Space (collectively, the “Expansion Improvements”) specified in the Final Plans to be agreed to by Landlord and Tenant as set forth in Paragraph 2 below. Landlord shall pay for the cost of such Expansion Improvements up to the extent of the Expansion Allowance as set forth in Paragraph 8 of this Second Amendment and Paragraph 5 of this Exhibit C, and any additional cost for such Expansion Improvements shall be paid for by Tenant.

2. Space Planner. Landlord will work with a space planner (the “Space Planner”) to prepare certain plans, drawings and specifications (the “Temporary Plans”) for the construction of the Expansion Improvements to be installed in the Premises and the Expansion Space by a general contractor selected by Landlord pursuant to this Work Letter. Tenant shall deliver to Space Planner within ten (10) days after the execution of this Second Amendment all necessary information required by the Space Planner to complete the Temporary Plans. Tenant shall have five (5) business days after its receipt of the proposed Temporary Plans to review the same and notify Landlord in writing of any comments or required changes, or to otherwise give its approval or disapproval of such proposed Temporary Plans. If Tenant fails to give written comments to or approve the Temporary Plans within such five (5) business day period, then Tenant shall be deemed to have approved the Temporary Plans as submitted. Landlord shall have five (5) business days following its receipt of Tenant’s comments and objections to redraw the proposed Temporary Plans in compliance with Tenant’s request and to resubmit the same for Tenant’s final review and approval or comment within five (5) business days of Tenant’s receipt of such revised plans. Such process shall be repeated twice and if at such time final approval by Tenant of the proposed Temporary Plans has not been obtained, then the process shall continue until such time as Tenant approves the Temporary Plans; provided, however, that such additional iterations of the Temporary Plans shall be at Tenant’s sole cost and expense (subject to reimbursement from the Expansion Allowance). Once Tenant has approved or has been deemed to have approved the Temporary Plans, then the approved (or deemed approved) Temporary Plans shall be thereafter known as the “Final Plans”. The Final Plans shall include the complete and final layout, plans and specifications for the Premises and the Expansion Space showing all doors, light fixtures, electrical outlets, telephone outlets, wall coverings, plumbing improvements (if any), data systems wiring, floor coverings, wall coverings, painting, any other improvements to the Premises and the Expansion Space beyond the shell and core improvements provided by Landlord and any demolition of existing improvements in the Premises and the Expansion Space. The improvements shown in the Final Plans shall (i) utilize Landlord’s building standard materials and methods of construction, (ii) be compatible with the shell and core improvements and the design, construction and equipment of the Premises and the Expansion Space, and (iii) comply with all applicable laws, rules, regulations, codes and ordinances.

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3. Bids. As soon as practicable following the approval of the Final Plans, Landlord shall (i) obtain three (3) written non-binding itemized estimates of the costs of all Expansion Improvements shown in the Final Plans as prepared by three (3) general contractors, one of which shall be selected by Tenant and reasonably approved by Landlord, and (ii) if required by applicable law, codes or ordinances, submit the Final Plans to the appropriate governmental agency for the issuance of a building permit or other required governmental approvals prerequisite to commencement of construction of such Expansion Improvements (“Permits”). Tenant acknowledges that any cost estimates are prepared by the general contractors and Landlord shall not be liable to Tenant for any inaccuracy in any such estimate. Within five (5) business days after receipt of the written non-binding cost estimates prepared by the general contractors, Tenant shall either (i) give its written approval to the general contractor with the best qualified bid and authorization to proceed with construction or (ii) immediately request the Space Planner to modify or revise the Final Plans in any manner desired by Tenant to decrease the cost of the Expansion Improvements. If Tenant is silent during such five (5) business day period, then Tenant shall be deemed to have approved such general contractor with the best qualified bid as set forth in romanette (i) above. If the Final Plans are revised pursuant to romanette (ii) above, then Landlord shall request that the general contractors provide revised cost estimates to Tenant based upon the revisions to the Final Plans. Such modifications and revisions shall be subject to Landlord’s reasonable approval and shall be in accordance with the standards set forth in Paragraph 2 of this Work Letter. Within ten (10) business days after receipt of the general contractors’ original written cost estimates, Tenant shall give its final approval of the Final Plans to Landlord which shall constitute authorization to commence the construction of the Expansion Improvements in accordance with the Final Plans, as modified or revised. Tenant shall signify its final approval by signing a copy of each sheet or page of the Final Plans and delivering such signed copy to Landlord.

4. Construction. Landlord shall authorize the general contractor with the best qualified bid to commence construction of the Expansion Improvements within ten (10) days following the later of (i) the approval of the Final Plans, or (ii) Landlord’s receipt of any necessary Permits. Landlord shall diligently pursue completion of construction of the Expansion Improvements and use its commercially reasonable efforts to complete construction of the Expansion Improvements as soon as reasonably practicable. Notwithstanding anything in this Lease to the contrary, the Expansion Allowance shall be used only for the construction of the Expansion Improvements and the Soft Costs, as set forth in Paragraph 5 below. If, as a result solely of Tenant Delay, construction of the Expansion Improvements is not completed within nine (9) months following the Effective Date of this Second Amendment (“Construction Termination Date”), then Landlord’s obligation to provide the Expansion Allowance shall terminate and become null and void, and Tenant shall be deemed to have waived its rights in and to said Expansion Allowance.

5. Expansion Allowance. Subject to the terms and provisions of this Work Letter, Landlord shall pay the cost of the Expansion Improvements up to the amount of the Expansion Allowance. If the amount of the best qualified bid to perform the Expansion Improvements exceeds the Expansion Allowance, Tenant shall bear the cost of such excess (“Excess Costs”) and shall pay the estimated cost of such excess to Landlord prior to commencement of construction of such Expansion Improvements and a final adjusting payment based upon the actual costs of the Expansion Improvements shall be made when the Expansion Improvements

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are completed. In other words, if the cost of the Expansion Improvements is less than the Expansion Allowance, then Tenant shall not receive any credit whatsoever for the difference between the actual cost of the Expansion Improvements and the Expansion Allowance. If the cost of the Expansion Improvements is greater than the Expansion Allowance, but less than the Excess Costs, then Landlord shall promptly refund to Tenant the remaining amount of the Excess Costs. Finally, if the cost of the Expansion Improvements is greater than the Expansion Allowance and the Excess Costs, then Tenant shall promptly pay to Landlord the extra costs of the Expansion Improvements in excess of the Expansion Allowance and the Excess Costs. The cost of the permits, working drawings, hard construction costs, fixtures and equipment that are attached to the Premises or Expansion Space in more than a de minimis manner, mechanical and electrical planning, fees, permits, general contract overhead, and a coordination fee payable to Landlord equal to five percent (5%) of the actual costs of construction and such costs or permits, fees, planning and contractor overhead shall be payable out of the Expansion Allowance and shall be included in the cost of the Expansion Improvements. The cost of the Expansion Improvements shall not include any other fees payable to Landlord. Notwithstanding the foregoing, Tenant shall have the right to have up to (but not to exceed) $183,270.00 ($5.00 per square foot) out of such Expansion Allowance disbursed to Tenant as a reimbursement of the actual out-of-pocket moving expenses paid by Tenant to third parties in connection with Tenant’s move to the Premises or Expansion Space, including Tenant’s actual moving expenses and telephone, data and computer wiring and cabling in the Premises or Expansion Space, and purchase and installation of furniture, fixtures and equipment in the Premises or Expansion Space (the “Soft Costs”). In the event Tenant desires any such reimbursement, Tenant shall notify Landlord of the amounts that Tenant wants reimbursed (and Tenant shall include actual copies of invoices reflecting amounts Tenant desires to have reimbursed) prior to the Construction Termination Date. From and after the Construction Termination Date, Landlord’s obligation to provide any portion of Expansion Allowance for Soft Costs shall terminate and become null and void, and Tenant shall be deemed to have waived its rights in and to reimbursement from the Expansion Allowance for Soft Costs.

6. Change Order. If Tenant shall desire any changes to the Final Plans, Tenant shall so advise Landlord in writing and Landlord shall determine whether such changes can be made in a reasonable and feasible manner. If Landlord approves Tenant’s requested change, addition, or alteration, the Space Planner shall complete all working drawings necessary to show the change, addition or alteration being requested by Tenant. To the extent that any costs of reviewing, redrawing (by the Space Planner) and/or making any requested changes exceed the Expansion Allowance, then such excess shall be deemed Excess Costs payable by Tenant to Landlord upon demand and before execution of the change order.

7. Substantial Completion. “Substantial Completion” of construction of the Expansion Improvements shall be defined as the later of (i) the date upon which Landlord’s Construction Representative (or other consultant engaged by Landlord) determines that the Expansion Improvements have been substantially completed in accordance with the Final Plans except for Punch List items (defined below), unless the completion of the Expansion Improvements was delayed due to any Tenant Delay (defined below), in which case the date of Substantial Completion shall be the date the Expansion Improvements would have been completed, but for the Tenant Delays, and (ii) the date upon which a temporary certificate of occupancy (or its equivalent) is issued for the Premises and Expansion Space by the appropriate governmental authority. The term “Punch List” items shall mean items that constitute minor

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defects or adjustments which can be completed after occupancy without causing any material interference with Tenant’s use of the Premises and Expansion Space; provided, however, that all Punch List items shall be completed within sixty (60) days of Substantial Completion. After the completion of the Expansion Improvements, Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of the Expansion Improvements performed on the Premises and Expansion Space. The term “Tenant Delay” shall include, without limitation, any delay in the completion of construction of Expansion Improvements resulting from (i) Tenant’s failure to comply with the provisions of this Work Letter, (ii) any additional time as reasonably determined by Landlord required for ordering, receiving, fabricating and/or installing items or materials or other components of the construction of Expansion Improvements, including, without limitation, mill work, that are not building standard, (iii) delay in work caused by submission by Tenant of a request for any change order following Tenant’s approval of the Final Plans, or for the implementation of any change order, or (iv) any delay by Tenant in timely submitting comments or approvals to the Temporary Plans or Final Plans.

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EXHIBIT D

ONE RENEWAL OPTION AT MARKET RATE

In the event of any conflict between the terms of this Exhibit D and the Lease, the terms of this Exhibit D shall control.

1. Tenant shall, provided the Lease is in full force and effect and Tenant is not in default under any of the other terms and conditions of the Lease at the time of notification or commencement, have one option to renew this Lease for a term of three (3) years for all of the Premises being leased by Tenant as of the date the renewal term is to commence, on the same terms and conditions set forth in the Lease, except as modified by the terms, covenants and conditions as set forth below:

a. If Tenant elects to exercise said option, then Tenant shall provide Landlord with written notice no earlier than the date which is three hundred sixty (360) days prior to the expiration of the then current term of the Lease but no later than the date which is two hundred seventy (270) days prior to the expiration of the then current term of this Lease. If Tenant fails to provide such written notice, Tenant shall have no further or additional right to extend or renew the term of the Lease.

b. The Annual Rent and Monthly Installment in effect at the expiration of the Extension Term shall be revised to reflect the current fair market rental for comparable space in other similar buildings in the same rental market as of the date the renewal term is to commence, including tenant improvement allowances and leasing commissions to be paid by Landlord, taking into account the specific provisions of the Lease which will remain constant. Landlord shall advise Tenant of the proposed Annual Rent and Monthly Installment for the Premises no later than thirty (30) days after receipt of Tenant’s written request therefor. Said request shall be made no earlier than thirty (30) days prior to the first date on which Tenant may exercise its option under this Exhibit. Said notification of the new Annual Rent may include a provision for its escalation to provide for a change in fair market rental between the time of notification and the commencement of the renewal term. If Tenant disagrees with Landlord’s proposed Annual Rent and Monthly Installment for the Premises, Tenant shall so advise Landlord in writing, and the parties shall promptly meet and attempt in good faith to resolve their differences. If the parties are unable to agree upon such amounts within thirty (30) days of Landlord’s receipt of Tenant’s notice, then Landlord and Tenant shall each appoint an independent, qualified MAI appraiser experienced in appraising rental rates of similarly situated commercial properties, and the two appraisers shall appoint a third independent, qualified MAI appraiser with similar experience. The appraisers shall, by the agreement of the majority of them, determine in writing the fair market rental of the Premises and the Annual Rent and Monthly Installment for the upcoming renewal term. Such determination shall be binding upon Landlord and Tenant. The appraisers shall have no power to modify the provisions of this Lease. Each party shall pay the fees and expenses of its respective appraiser and both shall share equally in the fees and expenses of the third appraiser.

c. This option is not transferable; the parties hereto acknowledge and agree that they intend that the aforesaid option to renew this Lease shall be “personal” to Tenant as set forth above and that in no event will any assignee or sublessee have any rights to exercise the aforesaid option to renew.

d. As the renewal option provided for above is exercised, Tenant shall have no further right to extend the term of the Lease.

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EXHIBIT E

RIGHT OF FIRST OFFER

(a) The term “Offered Space” shall mean any space on the second (2^nd) floor of Building 4, being Suite 200 (14,490 square feet), Suite 208 (2,578 square feet) and Suite 213 (1,936 square feet) as shown on Schedule One to this Exhibit E.

(b) Provided that as of the date of the giving of the First Offer Notice, (i) Tenant is the Tenant originally named herein, (ii) Tenant actually occupies all of the Premises originally demised under this Lease and any premises added to the Premises, and (iii) no event of default or event which but for the passage of time or the giving of notice, or both, would constitute an event of default has occurred and is continuing, if at any time during the Lease Term any portion of the Offered Space is “available for lease” and is unencumbered by any superior rights of any third party (including the party then occupying the Offered Space), then Landlord, before offering such Offered Space to anyone, other than the tenant then occupying such space (or its affiliates), shall offer to Tenant the one-time right to include the Offered Space within the Premises on the same terms and conditions upon which Landlord intends to offer the Offered Space for lease. Notwithstanding anything to the contrary in the Lease, the right of first offer granted to Tenant under this Exhibit E shall be subject and subordinate to (i) the superior rights of any other tenants at the Building Complex under existing leases predating this Second Amendment, and (ii) the herein reserved right of Landlord to renew or extend the term of any lease with the tenant then occupying such space (or any of its affiliates), whether pursuant to a renewal or extension option in such lease or otherwise.

(c) Such offer shall be made by Landlord to Tenant in a written notice (hereinafter called the “First Offer Notice”) which offer shall designate the space being offered and shall specify the terms which Landlord intends to offer with respect to any such Offered Space. Tenant may accept the offer set forth in the First Offer Notice by delivering to Landlord an unconditional acceptance (hereinafter called “Tenant’s Notice”) of such offer within five (5) business days after delivery by Landlord of the First Offer Notice to Tenant. Time shall be of the essence with respect to the giving of Tenant’s Notice. If Tenant does not accept (or fails to timely accept) an offer made by Landlord pursuant to the provisions of this Exhibit E with respect to the Offered Space designated in the First Offer Notice and execute the Amendment (defined below) within thirty (30) days after the delivery of the First Offer Notice, then Landlord shall be under no further obligation with respect to such space by reason of this Exhibit E; provided, however, that if Landlord shall fail to lease the Offered Space to a bona fide third party within one hundred eighty (180) days after delivery of Tenant’s Notice, then Tenant’s rights pursuant to this Exhibit E shall be re-vested with respect to such Offered Space.

(d) Tenant must accept all Offered Space offered by Landlord at any one time if it desires to accept any of such Offered Space and may not exercise its right with respect to only part of such space. In addition, if Landlord desires to lease more than just the Offered Space to one tenant, Landlord may offer to Tenant pursuant to the terms hereof all such space which Landlord desires to lease, and Tenant must exercise its rights hereunder with respect to all such space and may not insist on receiving an offer for just the Offered Space.

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(e) If Tenant at any time declines any Offered Space offered by Landlord, Tenant shall be deemed to have irrevocably waived all further rights under this Exhibit E with respect to such Offered Space, and Landlord shall be free to lease the Offered Space to third parties including on terms which may be less favorable to Landlord than those offered to Tenant; provided, however, that if Landlord shall fail to lease the Offered Space to a bona fide third party within one hundred eighty (180) days after delivery of Tenant’s Notice, then Tenant’s right of first offer shall be automatically revested with respect to such Offered Space.

(f) In the event that Tenant exercises its rights to any Offered Space pursuant to this Exhibit E, then Landlord shall prepare, and Tenant shall execute, an amendment to the Lease which confirms such expansion of the Premises and the other provisions applicable thereto (the “Amendment”).

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SCHEDULE ONE

DESCRIPTION OF OFFERED SPACE

Schedule One - 1

EX-10.15

EXHIBIT 10.15

THIRD AMENDMENT TO LEASE

This Third Amendment to Lease (this “Third Amendment”) is made and entered into by and between KBS NORTH CREEK, LLC, a Delaware limited liability company (“Landlord”), as successor-in-interest to RREEF America REIT II Corp. KK, a Maryland corporation (“Original Landlord”), and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), and shall be effective for all purposes as of the date that this Third Amendment is fully executed (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, Landlord and Tenant are parties to that certain Lease dated for reference purposes August 5, 2005 originally entered into by and between Original Landlord and Tenant (the “Original Lease”), as amended by that certain First Amendment to Lease dated February 1, 2008 by and between Original Landlord and Tenant (the “First Amendment”) and that certain Second Amendment to Lease dated September 23, 2010 by and between Landlord and Tenant (the “Second Amendment”) (the Original Lease, as amended by the First Amendment and the Second Amendment, is hereinafter known as the “Lease”), pursuant to which Tenant leases from Landlord certain premises containing 36,654 square feet of space (the “Premises”) consisting of (i) 25,440 square feet of space comprising the entirety of the building located at 11804 North Creek Parkway S, Building 6, Bothell, WA 98011 (“Building 6”) and (ii) 11,214 square feet of space on the second floor of the 18702 North Creek Parkway S, Building 4, Bothell, WA 98011 (“Building 4”), which is part of that certain building complex known as the North Creek Parkway Center, consisting of six buildings with a total of approximately 205,707 square feet of space located at 18912, 18916, 18804, 18702, 18706, and 11804 North Creek Parkway, Bothell, Washington (the “Building Complex”);

WHEREAS, the current Term of the Lease expires on January 31, 2014; and

WHEREAS, Landlord and Tenant desire to extend the Term of the Lease and further amend the Lease, as more particularly described hereinbelow;

NOW, THEREFORE, pursuant to the foregoing, and in consideration of the mutual covenants and agreements contained herein and in the Lease, the receipt and sufficiency of which are hereby acknowledged, the Lease is hereby amended as follows:

1. Defined Terms. All capitalized terms used herein shall have the same meaning as defined in the Lease, unless otherwise defined in this Third Amendment.

2. Extension of the Term of the Lease. Landlord and Tenant hereby agree to extend the Term of the Lease for an additional period of thirty-seven months, commencing on February 1, 2014 (the “Second Extension Term Commencement Date”) and continuing through and expiring on February 28, 2017 (such period, the “Second Extension Term”), upon and subject to all of the existing terms of the Lease, except as otherwise hereinafter provided.

3. Annual Rent. Tenant shall continue to pay Annual Rent for the Premises in accordance with the terms and conditions of the Lease; provided, however, commencing on the Second Extension Term Commencement Date and continuing throughout the remainder of the Second Extension Term, Tenant shall pay Annual Rent for the Premises as set forth below:

Period	Monthly Installment		Rate/rsf/annum
02/01/2014 - 02/28/2014 (inclusive)	$	0.00 NNN		Annual Rent is abated
03/01/2014 - 01/31/2015 (inclusive)	$	48,872.00	$	16.00 NNN
02/01/2015 - 01/31/2016 (inclusive)	$	51,162.88	$	16.75 NNN
02/01/2016 - 01/31/2017 (inclusive)	$	53,453.75	$	17.50 NNN
02/01/2017 - 02/28/2017 (inclusive)	$	55,744.63	$	18.25 NNN

4. Tenant’s Proportionate Share of Expenses and Taxes. Throughout the Second Extension Term, Tenant shall continue to pay for all items of additional rent, including, without limitation, Tenant’s Proportionate Share of Expenses and Taxes, in accordance with the provisions of the Lease applicable thereto.

5. Security Deposit. Tenant currently has deposited with Landlord a letter of credit in the amount of $112,370.00 (the “Letter of Credit”), which such letter of credit has expired upon its terms as of January 31, 2013. Notwithstanding anything contained in the Lease or this Third Amendment to the contrary, provided an event of default by Tenant does not then exist hereunder, as of the Effective Date of this Third Amendment, Landlord and Tenant hereby agree to amend and decrease the security deposit required under the Lease to $0.00 and the Letter of Credit currently on file as the security deposit under the Lease shall be returned to Tenant within thirty (30) days of the Effective Date of this Third Amendment.

6. Condition of the Premises. Tenant is currently in possession of the Premises and Tenant hereby agrees to accept the Premises in its existing “AS-IS”, “WHERE-IS” and “WITH ALL FAULTS” condition and Landlord shall have no obligation whatsoever to refurbish or otherwise improve the Premises throughout the remainder of the Term of the Lease, as extended by the Second Extension Term; provided, however, notwithstanding the foregoing, subject to the terms of Exhibit A attached hereto, Landlord shall provide Tenant with an improvement allowance of up to Three Hundred Sixty-Six Thousand, Five Hundred Forty and No/100 Dollars ($366,540.00) (equal to $10.00 per square foot of space contained in the Premises) (the “Second Extension Allowance”) to be applied to the cost of performing the Second Extension Improvements (as said term is defined on Exhibit A attached hereto) in the Premises in accordance with and subject to the terms of said Exhibit A. Landlord and Tenant further acknowledge and agree that the tenant improvement allowance and improvements to the Premises as set forth in Paragraph 8 and Exhibit C to the First Amendment have been completed and satisfied and that such provisions are hereby deleted in their entirety and are of no further force and effect.

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7. Parking. Effective on and as of the Second Extension Commencement Date, Section 1.3 of the Original Lease, as amended by Paragraph 10 of the First Amendment and Paragraph 10 of the Second Amendment, shall be deleted and replaced in its entirety as follows:

“Tenant and the Tenant Entities will be entitled to the nonexclusive use of the common areas of the Building as they exist from time to time during the Term, subject to Landlord’s rules and regulations regarding such use. In addition, Landlord shall provide to Tenant and the Tenant entities, and they shall have the right to use and occupy, one hundred twenty-eight (128) parking stalls in the Building parking lot, subject to Landlord’s rules and regulations regarding such use. The foregoing shall not be deemed to provide Tenant with an exclusive right to any parking spaces or any guaranty of the availability of any parking spaces.”

8. One Renewal Option at Market. Landlord hereby grants to Tenant one option to renew the Term of the Lease for an additional three (3) year period following the expiration of the Second Extension Term in accordance with and subject to the terms and conditions of Exhibit B attached hereto and incorporated herein for all purposes.

9. Expansion Option. Landlord hereby grants to Tenant a one-time option to expand the Premises by approximately 16,277 square feet of space located in Suite 110 of Building 4 in accordance with and subject to the terms and conditions of Exhibit C attached hereto and incorporated herein for all purposes.

10. Right of First Refusal. Landlord hereby grants to Tenant a right of first refusal to lease any available space in Building 4 in accordance with and subject to the terms and conditions of Exhibit D attached hereto and incorporated herein for all purposes.

11. No Preferential Rights or Options. Except for the One Renewal Option at Market set forth in Paragraph 8 and Exhibit B of this Third Amendment, the Expansion Option set forth in Paragraph 9 and Exhibit C of this Third Amendment and the Right of First Offer set forth in Paragraph 10 and Exhibit D of this Third Amendment, notwithstanding anything contained in the Lease to the contrary, Landlord and Tenant stipulate and agree that Tenant has no preferential rights or options under the Lease, as herein amended, such as any rights of renewal, expansion, reduction, refusal, offer, purchase, termination, relocation or any other such preferential rights or options, such rights originally set forth in the Lease, including, without limitation, the One Renewal Option at Market set forth in Paragraph 11 and Exhibit D to the Second Amendment and the Right of First Offer set forth in Paragraph 12 and Exhibit E to the Second Amendment, being hereby null and void in their entirety and of no further force or effect.

12. Brokers. Landlord and Tenant each warrant that they have had no dealings with any broker or agent other than Colliers International and Commerce Real Estate Solutions, LLC (collectively, the “Brokers”) in connection with the negotiation or execution of this Third Amendment, and each of Landlord and Tenant agrees to indemnify and hold harmless the other party from and against any and all costs, expenses, or liability for commissions or other compensations or charges claimed by any broker or agent, other than the Brokers, with respect to this Third Amendment.

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13. Miscellaneous. With the exception of those terms and conditions specifically modified and amended herein, the herein referenced Lease shall remain in full force and effect in accordance with all its terms and conditions. In the event of any conflict between the terms and provisions of this Third Amendment and the terms and provisions of the Lease, the terms and provisions of this Third Amendment shall supersede and control.

14. Counterparts/Facsimiles. This Third Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of such counterparts shall constitute one agreement. To facilitate execution of this Third Amendment, the parties may execute and exchange telefaxed or e-mailed counterparts of the signature pages and such counterparts shall serve as originals.

[SIGNATURE PAGE TO FOLLOW]

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SIGNATURE PAGE TO THIRD AMENDMENT TO LEASE

BY AND BETWEEN KBS NORTH CREEK, LLC, AS LANDLORD,

AND ALDER BIOPHARMACEUTICALS, INC., AS TENANT

IN WITNESS WHEREOF, Landlord and Tenant, acting herein by duly authorized individuals, have caused these presents to be executed, effective as of the Effective Date set forth herein.

LANDLORD:
KBS NORTH CREEK, LLC, a Delaware limited liability company
By:	KBS Capital Advisors, LLC, a Delaware limited liability company, its authorized agent
	By:	/s/ Mark Brecheen
		Mark Brecheen,
		Senior Vice President
	Date:	8-21	, 2013
TENANT:
ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation
By:	/s/ Randall C. Schatzman
Name:	Randall C. Schatzman
Title:	President & CEO
Date:	August 14th		, 2013

Signature Page - 1

See Attached Certificate

STATE OF WASHINGTON	)
	)ss.
COUNTY OF KING	)

I certify that I know or have satisfactory evidence that Randall C. Schatzman is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the President & CEO of ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, to be the free and voluntary act such party for the uses and purposes mentioned in the instrument.

Dated:	Aug. 14, 2013
	/s/ Marilyn N. Singer
	(Signature)	[SEAL]
	Marilyn N. Singer
	(Print Name)
	Notary Public, in and for the State of Washington, residing at Bothell, WA
	My Commission Expires January 22, 2017

Signature Page - 2

ACKNOWLEDGMENT State of California County of Orange                                         ) On August 21, 2013                     before me, Beth P. Arata, Notary Public                                                                                                   (insert name and title of the officer) personally appeared Mark Brecheen                         who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal.
		[SEAL]
Signature	/s/ Beth P. Arata

EXHIBIT A

WORK LETTER

THIS WORK LETTER is attached as Exhibit A to the Third Amendment to Lease between KBS NORTH CREEK, LLC, a Delaware limited liability company, as Landlord, and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant, and constitutes the further agreement between Landlord and Tenant as follows:

(a) Second Extension Improvements; Second Extension Allowance. The leasehold improvements to be constructed by Tenant (the “Second Extension Improvements”), at Tenant’s sole cost and expense (except for the Second Extension Allowance, as set forth in Paragraph 6 of this Second Amendment, and subject to Paragraph (g) of this Exhibit A), shall be constructed in accordance with the Final Plans to be submitted by Tenant and reviewed and approved by Landlord in accordance with the provisions of Paragraph (b) of this Exhibit A.

Landlord shall have no obligation to construct or to pay for the construction of the Second Extension Improvements; provided, however, Landlord agrees to contribute toward the cost of construction of the Second Extension Improvements the cash sum of up to the Second Extension Allowance. Notwithstanding anything in this Second Amendment or in this Work Letter to the contrary, Second Extension Allowance shall be used only for the construction of the Second Extension Improvements, and if construction of the Second Extension Improvements is not completed within nine (9) months following the Effective Date of this Third Amendment (the “Construction Termination Date”), then Landlord’s obligation to provide the Second Extension Allowance shall terminate and become null and void, and Tenant shall be deemed to have waived its rights in and to said Second Extension Allowance. The Second Extension Allowance will be reduced by any consulting or architectural fees incurred by Landlord. The construction costs that may be reimbursed from the Second Extension Allowance shall include only the following: costs of labor, equipment, supplies and materials furnished for construction of the Second Extension Improvements; governmental fees and charges for required permits, plan checks, and inspections for the Second Extension Improvements; charges of Tenant’s architect and design professionals; and a coordination fee payable to Landlord equal to two percent (2%) of the amount of the Second Extension Allowance. No other costs, fees or expenses of the Second Extension Improvements shall be reimbursable out of the Second Extension Allowance.

The payment of the Second Extension Allowance shall be as follows:

(i) Payment of Second Extension Allowance will be made by Landlord directly to Tenant or, if Tenant has approved in writing the Tenant’s contractor’s invoices, directly to the Tenant’s contractors. Within fifteen (15) days following Landlord’s receipt and reasonable approval of the Tenant Deliveries (defined below), Landlord shall deliver to Tenant (not more than once each month) a check made out to Tenant’s Contractor and/or vendors in an amount equal to that invoiced amount set forth in an invoice from Tenant’s Contractor and/or vendors to Landlord setting forth the work on the Second Extension Improvements which was completed over the prior thirty (30) day period. In order to evidence that such work on the Second Extension

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Improvements has been completed over the prior thirty (30) day period, each time that Tenant requests that Landlord fund a portion of the Second Extension Allowance to Tenant, Tenant shall deliver to Landlord the following (collectively the “Tenant Deliveries”): (i) an invoice or invoices evidencing the amount of work on the Second Extension Improvements that was completed over the prior thirty (30) day period (standard AIA forms shall be acceptable), (ii) a certificate executed by Tenant, Tenant’s Contractor or vendors and Landlord’s construction representative indicating that the work deemed completed as set forth in the invoice submitted by Tenant’s Contractor or vendor to Landlord has indeed been completed, (iii) a lien release in a form satisfactory to Landlord executed by Tenant’s Contractor, which for purposes of the interim draws can be in the form of conditional lien releases in form satisfactory to Landlord, and (iv) Tenant shall not then be in default of any of the provisions of the Lease. Upon the payment of such invoiced amount, Landlord shall deduct that amount from the remaining portion of the Second Extension Allowance. Notwithstanding anything herein to the contrary, Landlord shall have the right to withhold ten percent (10%) retainage from each request for payment for protection against mechanics’ and materialmens’ liens by subcontractors and suppliers.

(ii) Once (i) the Second Extension Improvements have been completed in accordance with the Final Plans; (ii) Tenant has delivered to Landlord satisfactory evidence that all mechanics’ lien rights of all contractors, suppliers, subcontractors, or materialmen furnishing labor, supplies or materials in the construction or installation of the Second Extension Improvements have been unconditionally waived, released, or extinguished; (iii) Tenant has delivered to Landlord written evidence satisfactorily substantiating the actual amount of the construction costs of the Second Extension Improvements (standard AIA forms shall be acceptable); (iv) Tenant has delivered to Landlord a final certificate of occupancy for the Premises, if required; (v) Tenant is not then in default of any of the provisions of the Lease; and (vi) Tenant has occupied and opened for business at the Premises, then Landlord shall deliver the remaining ten percent (10%) of the cost of the Second Extension Improvements to Tenant. If the actual cost of the Second Extension Improvements is less than the Second Extension Allowance, then Tenant shall not receive any credit whatsoever for the difference between the actual cost of the Second Extension Improvements and the Second Extension Allowance.

(b) Preparation and Review of Plans for Second Extension Improvements. Tenant has retained a space planner (the “Space Planner”), and the Space Planner has prepared (or will prepare) certain plans, drawings and specifications (the “Temporary Plans”) for the construction of the Second Extension Improvements in the Premises to be installed in the Premises by a general contractor selected by Tenant pursuant to this Work Letter. Tenant shall deliver the Temporary Plans to Landlord after the execution of this Third Amendment by Tenant. Landlord shall have five (5) business days after Landlord’s receipt of the proposed Temporary Plans to review the same and notify Tenant in writing of any comments or required changes, or to otherwise give its approval or disapproval of such proposed Temporary Plans. Landlord shall not unreasonably withhold, delay or condition its approval of such proposed Temporary Plans. If

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Landlord fails to give written comments to or approve the proposed Temporary Plans within such five (5) business day period, then Tenant shall provide a written notice to Landlord (“Tenant’s Second Notice”) of Landlord’s failure to respond. Such Tenant’s Second Notice shall include the following language in all capital letters and bold at the top of such notice: “IN THE EVENT LANDLORD FAILS TO APPROVE OR DISAPPROVE OF THE PROPOSED TEMPORARY PLANS WITHIN FIVE (5) DAYS AFTER RECEIPT OF THIS NOTICE, LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE PLANS.” If Landlord fails to approve or disapprove of the proposed Temporary Plans within five (5) days after receipt of Tenant’s Second Notice then Landlord shall be deemed to have approved such proposed Temporary Plans as submitted. Tenant shall have five (5) business days following its receipt of Landlord’s comments and objections to redraw the proposed Temporary Plans in compliance with Landlord’s request and to resubmit the same for Landlord’s final review and approval or comment within five (5) business days of Landlord’s receipt of such revised plans. Such process shall be repeated until such time as Landlord approves the Temporary Plans; provided, however, that such additional iterations of the Temporary Plans shall be at Tenant’s sole cost and expense (subject to reimbursement from the Second Extension Allowance). Once Landlord has approved the Temporary Plans, the approved Temporary Plans shall be thereafter known as the “Final Plans”. The Final Plans shall include the complete and final layout, plans and specifications for the Premises showing all doors, light fixtures, electrical outlets; telephone outlets, wall coverings, plumbing improvements (if any), data systems wiring, floor coverings, wall coverings, painting, any other improvements to the Premises beyond the shell and core improvements provided by Landlord and any demolition of existing improvements in the Premises. The improvements shown in the Final Plans shall (i) utilize Landlord’s building standard materials and methods of construction, (ii) be compatible with the shell and core improvements and the design, construction and equipment of the Premises, and (iii) comply with all applicable laws, rules, regulations, codes and ordinances. Notwithstanding anything in the Lease or this Third Amendment to the contrary, upon the expiration or earlier termination of the Term of the Lease, Tenant shall not be required to remove any of the Second Extension Improvements that Landlord, at the time of Landlord’s approval of the Temporary Plans, indicated in writing that Tenant would not be required to remove upon the expiration or earlier termination of the Term of the Lease. Tenant, using the Space Planner, shall prepare or cause to be prepared and submitted the Final Plans, concurrently, and in each case by receipted courier or delivery service, to Landlord’s construction representative (“Landlord’s Construction Representative”), and Landlord’s offices for Landlord’s review and approval, which shall be consistent with the description of the Second Extension Improvements set forth in the Temporary Plans.

Each set of proposed Final Plans furnished by Tenant shall include at least two (2) sets of prints. The Final Plans shall be compatible with the design, construction, and equipment of the Building, and shall be capable of logical measurement and construction. Unless Landlord shall otherwise agree in writing, the Final Plans shall be signed/stamped by the Space Planner, and shall include (to the extent relevant or applicable) such additional plans reasonably requested by Landlord related to the Second Extension Improvements, including, without limitation, any and all additional plans related to Tenant’s specific use of the Premises, or as may be required by local city ordinance or building code.

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Tenant shall submit all Final Plans concurrently to Landlord’s construction representative and offices, as designated above, for Landlord’s review and approval. Landlord shall have five (5) business days after Landlord’s receipt of the proposed Final Plans to review the same and notify Tenant in writing of any comments or required changes, or to otherwise give its approval or disapproval of such proposed Final Plans. If Landlord fails to give written comments to or approve the proposed Final Plans within such five (5) business day period, then Tenant shall provide a written notice to Landlord (“Tenant’s Second Final Plans Notice”) of Landlord’s failure to respond. Such Tenant’s Second Final Plans Notice shall include the following language in all capital letters and bold at the top of such notice: “IN THE EVENT LANDLORD FAILS TO APPROVE OR DISAPPROVE OF THE PROPOSED FINAL PLANS WITHIN FIVE (5) DAYS AFTER RECEIPT OF THIS NOTICE, LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE PLANS.” If Landlord fails to approve or disapprove of the proposed Final Plans within five (5) days after receipt of Tenant’s Second Final Plans Notice then Landlord shall be deemed to have approved such proposed Final Plans as submitted. Tenant shall have five (5) business days following its receipt of Landlord’s comments and objections to redraw the proposed Final Plans in compliance with Landlord’s request and to resubmit the same for Landlord’s final review and approval or comment within five (5) business days of Landlord’s receipt of such revised plans. Such process shall be repeated as necessary until final approval by Landlord of the proposed Final Plans has been obtained. Landlord shall not unreasonably withhold, delay or condition its approval of such proposed Final Plans. Landlord may at any time by written notice given in accordance with the notice provisions of the Lease change the name and/or address of the designated Landlord’s construction representative to receive plans delivered by Tenant to Landlord. In the event that Tenant disagrees with any of the changes to the proposed Final Plans required by Landlord, then Landlord and Tenant shall consult with respect thereto and each party shall use all reasonable efforts to promptly resolve any disputed elements of such proposed Final Plans. For purposes hereof, “business days” shall be all calendar days except Saturdays and Sundays and holidays observed by national banks in the State in which the Premises are situated.

Notwithstanding the preceding provisions of this Paragraph (b), under no circumstances whatsoever shall (i) any combustible materials be utilized above finished ceiling or in any concealed space, (ii) any structural load, temporary or permanent, be placed or exerted on any part of the Building without the prior written approval of Landlord, or (iii) any holes be cut or drilled in any part of the roof or other portion of the Building shell without the prior written approval of Landlord.

In the event that Tenant proposes any changes to the Final Plans (or any portion thereof) after the same have been approved by Landlord, Landlord shall not unreasonably withhold its consent to any such changes, provided the changes do not, in Landlord’s reasonable opinion, adversely affect the Building structure, systems, or equipment, or the external appearance of the Premises.

As soon as the Final Plans (or a portion thereof sufficient to permit commencement of construction or installation of the Second Extension Improvements, if Tenant elects to proceed with a “fast track” construction) are mutually agreed upon, Tenant shall use diligent efforts to obtain all required permits, authorizations, and licenses from appropriate governmental authorities for construction of the Second Extension Improvements (or such portion thereof, as applicable). Tenant shall be solely responsible for obtaining any business or other license or permit required for the conduct of its business at the Premises.

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(c) Construction of the Second Extension Improvements. Construction or installation of the Second Extension Improvements shall be performed by a licensed general contractor or contractors (the “Tenant’s Contractor,” whether one or more) selected by Tenant and approved by Landlord, which consent shall not be unreasonably withheld, conditioned or delayed, prior to Tenant soliciting bids from such Tenant’s Contractor for the construction of the Second Extension Improvements, pursuant to a written construction contract negotiated and entered into by and between the Tenant’s Contractor and Tenant and approved by Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Each such contract shall (i) obligate Tenant’s Contractor to comply with all rules and regulations of Landlord relating to construction activities in the Building, (ii) name Landlord as an additional indemnitee under the provisions of the contract whereby the Tenant’s Contractor holds Tenant harmless from and against any and all claims, damages, losses, liabilities and expenses arising out of or resulting from the performance of such work, (iii) name Landlord as a beneficiary of (and a party entitled to enforce) all of the warranties of the Tenant’s Contractor with respect to the work performed thereunder and the obligation of the Tenant’s Contractor to replace defective materials and correct defective workmanship for a period of not less than one (1) year following final completion of the work under such contract, (iv) evidence the agreement of the Tenant’s Contractor that the provisions of the Lease shall control over the provisions of the contract with respect to distribution or use of insurance proceeds, in the event of a casualty during construction, and (v) evidence the waiver and release by the Tenant’s Contractor of any lien or right to assert a lien on all or any portion of the fee estate of Landlord in and to the Building as a result of the work performed or to be performed thereunder (and obligating the Tenant’s Contractor to include a substantially similar release and waiver provision in all subcontracts and purchase orders entered under or pursuant to the contract).

Tenant acknowledges and understands that all roof penetrations involved in the construction of the Second Extension Improvements must be performed by the Landlord’s Building roofing contractor. All reasonable costs, fees and expenses incurred with such contractor in properly performing such work shall be a cost of the Second Extension Improvements, payable in accordance with the provisions of this Exhibit A. Tenant or Tenant’s Contractor shall be responsible for all water, gas, electricity, sewer or other utilities used or consumed at the Premises during the construction of the Second Extension Improvements.

Tenant specifically agrees to carry, or cause the Tenant’s Contractor to carry, during all such times as the Tenant’s work is being performed, (a) builder’s risk completed value insurance on the Second Extension Improvements, in an amount not less than the full replacement cost of the Second Extension Improvements, (b) a policy of insurance covering commercial general liability, in an amount not less than One Million Dollars ($1,000,000.00), combined single limit for bodily injury and property damage per occurrence (and combined single limit coverage of $2,000,000.00 in the aggregate), and automobile liability coverage (including owned, non-owned and hired vehicles) in an amount not less than One Million Dollars ($1,000,000.00) combined single limit (each person, each accident), and endorsed to show Landlord as an additional insured, and (c) workers’ compensation insurance as required by law, endorsed to show a waiver of subrogation by the insurer to any claim the Tenant’s Contractor may have against Landlord.

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Tenant shall not commence construction of the Second Extension Improvements until Landlord has issued to Tenant a written authorization to proceed with construction after Tenant has delivered to Landlord’s construction representative (i) certificates of the insurance policies described above, (ii) copies of all permits required for construction of the Second Extension Improvements and a copy of the permitted Final Plans as approved by the appropriate governmental agency, and (iii) a copy of each signed construction contract for the Second Extension Improvements (a copy of each subsequently signed contract shall be forwarded to Landlord’s construction representative without request or demand, promptly after execution thereof and prior to the performance of any work thereunder). All of the construction work shall be the responsibility of and supervised by Tenant.

(d) Requirements for Tenant’s Work. All of Tenant’s construction with respect to the Premises shall be performed in substantial compliance with this Exhibit A and the Final Plans therefor previously approved in writing by Landlord (and any changes thereto approved by Landlord as herein provided), and in a good and workmanlike manner, utilizing only new materials. All such work shall be performed by Tenant in strict compliance with all applicable building codes, regulations and all other legal requirements. All materials utilized in the construction of Tenant’s work must be confined to within the Premises. All trash and construction debris not located wholly within the Premises must be removed each day from the Project at the sole cost and expense of Tenant. Landlord shall have the right at all times to monitor the work for compliance with the requirements of this Exhibit A. If Landlord determines that any such requirements are not being strictly complied with, Landlord may immediately require the cessation of all work being performed in or around the Premises or the Project until such time as Landlord is satisfied that the applicable requirements will be observed. Any approval given by Landlord with respect to Tenant’s construction or the Temporary Plans or Final Plans therefor, and/or any monitoring of Tenant’s work by Landlord, shall not make Landlord liable or responsible in any way for the condition, quality or function of such matters or constitute any undertaking, warranty or representation by Landlord with respect to any of such matters.

(e) No Liens; Indemnification. Tenant shall have no authority to place any lien upon the Premises, or the Building, or any portion thereof or interest therein, nor shall Tenant have any authority in any way to bind Landlord, and any attempt to do so shall be void and of no effect. If, because of any actual or alleged act or omission of Tenant, or Tenant’s Contractor, or any subcontractors or materialmen, any lien, affidavit, charge or order for the payment of money shall be filed against Landlord, the Premises, the Building, or any portion thereof or interest therein, whether or not such lien, affidavit, charge or order is valid or enforceable, Tenant shall, at its sole cost and expense, cause the same to be discharged of record by payment, bonding or otherwise no later than fifteen (15) days after notice to Tenant of the filing thereof, but in any event prior to the foreclosure thereof. With respect to the contract for labor or materials for construction of the Second Extension Improvements, Tenant acts as principal and not as the agent of Landlord. Landlord expressly disclaims liability for the cost of labor performed for or supplies or materials furnished to Tenant. Landlord may post one or more “notices of non-responsibility” for Tenant’s work on the Building. No contractor of Tenant is intended to be a third-party beneficiary with respect to the Second Extension Allowance, or the agreement of Landlord to make such Second Extension Allowance available for payment of or reimbursement for the costs of construction of the Second Extension Improvements. Tenant agrees to

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indemnify, defend and hold Landlord, the Premises and the Project, harmless from all claims (including all costs and expenses of defending against such claims) arising or alleged to arise from any act or omission of Tenant or Tenant’s agents, employees, contractor, subcontractors, suppliers, materialmen, architects, designers, surveyors, engineers, consultants, laborers, or invitees, or arising from any bodily injury or property damage occurring or alleged to have occurred incident to any of the work to be performed by Tenant or its contractors or subcontractors with respect to the Premises. Any Default by Tenant under this Exhibit A shall constitute a default by Tenant under the Lease for all purposes. Additionally, any approval given by Landlord with respect to the Second Extension Improvements or the Final Plans and/or any monitoring of the construction of the Second Extension Improvements by Landlord shall not make Landlord liable or responsible in any way for the condition, quality or function of such matters or constitute any undertaking, warranty or representation by Landlord with respect to any such matters.

(f) Substantial Completion. “Substantial Completion” of construction of the Second Extension Improvements shall be defined as (i) the date upon which the Second Extension Improvements are substantially completed in accordance with the Final Plans, and (ii) the date upon which a temporary certificate of occupancy (or its equivalent) is issued for the Premises by the appropriate governmental authority. After the completion of the Second Extension Improvements, Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of improvements performed on the Premises. The failure of Tenant to take possession of or to occupy the Premises shall not serve to relieve Tenant of obligations arising under the Lease or this Third Amendment or delay the payment of Rent by Tenant.

(g) Additional Allowance. In addition to the Second Extension Allowance, Landlord agrees to provide Tenant with an additional allowance (the “Additional Allowance”) of up to Three Hundred Eighty-One Thousand Six Hundred and 00/100 Dollars ($381,600.00) (equal to $15.00 per square foot of the 25,440 square feet of the Premises in Building 6) to be used by Tenant solely towards paying for constructing lab improvements in Building 6. In the event Tenant desires to utilize any portion of the Additional Allowance, then Tenant shall make a one-time request on or before the Second Extension Term Commencement Date, indicating in such request the amount of such Additional Allowance Tenant desires that Landlord disburse. Landlord and Tenant hereby agree that in the event Tenant notifies Landlord in writing that Tenant desires any portion of the Additional Allowance, such portion requested by Tenant shall be amortized (at a rate of interest equal to eight percent (8%) per annum) over the period commencing on the Second Extension Term Commencement Date and ending on the expiration of the Second Extension Term, and the monthly installments of Annual Rent payable by Tenant hereunder shall be increased by the monthly amount necessary to so amortize such Additional Allowance so disbursed by Landlord. Tenant agrees to execute promptly an amendment to the Lease reflecting the increase in the Annual Rent as described above.

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EXHIBIT B

ONE RENEWAL OPTION AT MARKET RATE

THIS ONE RENEWAL OPTION AT MARKET RATE is attached as Exhibit B to the Third Amendment to Lease between KBS NORTH CREEK, LLC, a Delaware limited liability company, as Landlord, and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant, and constitutes the further agreement between Landlord and Tenant as follows:

In the event of any conflict between the terms of this Exhibit B and the Lease, the terms of this Exhibit B shall control.

1. Tenant shall, provided the Lease is in full force and effect and Tenant is not in default under any of the other terms and conditions of the Lease at the time of notification or commencement, have one option to renew the Term of the Lease beyond the Second Extension Term for a term of three (3) years for all of the Premises being leased by Tenant as of the date the renewal term is to commence, on the same terms and conditions set forth in the Lease, except as modified by the terms, covenants and conditions as set forth below:

a. If Tenant elects to exercise said option, then Tenant shall provide Landlord with written notice no earlier than the date which is three hundred sixty (360) days prior to the expiration of the then current term of the Lease but no later than the date which is two hundred seventy (270) days prior to the expiration of the Second Extension Term. If Tenant fails to provide such written notice, Tenant shall have no further or additional right to extend or renew the Term of the Lease.

b. The Annual Rent and Monthly Installment of Rent in effect at the expiration of the Second Extension Term shall be revised to reflect the current fair market rental for comparable space in other similar buildings in the same rental market as of the date the renewal term is to commence, including tenant improvement allowances and leasing commissions to be paid by Landlord, taking into account the specific provisions of the Lease which will remain constant. Landlord shall advise Tenant of the proposed Annual Rent and Monthly Installment of Rent for the Premises no later than thirty (30) days after receipt of Tenant’s written request therefor. Said request shall be made no earlier than thirty (30) days prior to the first date on which Tenant may exercise its option under this Exhibit B. Said notification of the new Annual Rent may include a provision for its escalation to provide for a change in fair market rental between the time of notification and the commencement of the renewal term. If Tenant disagrees with Landlord’s proposed Annual Rent and Monthly Installment of Rent for the Premises, Tenant shall so advise Landlord in writing, and the parties shall promptly meet and attempt in good faith to resolve their differences. If the parties are unable to agree upon such amounts within thirty (30) days of Landlord’s receipt of Tenant’s notice, then Landlord and Tenant shall each appoint an independent, qualified MAI appraiser experienced in appraising rental rates of similarly situated commercial properties, and the two appraisers shall appoint a third independent, qualified MAI appraiser with similar experience. The appraisers shall, by the agreement of the majority of them, determine in writing the fair market rental of the Premises and the Annual Rent and Monthly Installment of Rent for the upcoming renewal term. Such determination shall be binding upon Landlord and Tenant. The appraisers shall have no power to

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modify the provisions of the Lease or this Third Amendment. Each party shall pay the fees and expenses of its respective appraiser and both shall share equally in the fees and expenses of the third appraiser.

c. This option is not transferable; the parties hereto acknowledge and agree that they intend that the aforesaid option to extend the Term of the Lease shall be “personal” to Tenant as set forth above and that in no event will any assignee or sublessee have any rights to exercise the aforesaid option to renew.

d. As the renewal option provided for above is exercised, Tenant shall have no further right to extend the Term of the Lease.

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EXHIBIT C

EXPANSION OPTION

THIS EXPANSION OPTION is attached as Exhibit C to the Third Amendment to Lease between KBS NORTH CREEK, LLC, a Delaware limited liability company, as Landlord, and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant, and constitutes the further agreement between Landlord and Tenant as follows:

“Expansion Space” shall mean the 16,277 rentable square feet of space in Suite 110 of Building 4, as cross-hatched on Exhibit C-1 hereto. Landlord shall periodically update Tenant with respect to changes in the expected availability of the Expansion Space.

Provided that as of the date of the giving of the Expansion Notice (defined below), (x) Tenant is the Tenant originally named herein, and (y) no event of default has occurred and is continuing, beyond applicable notice and cure periods, if at any time during the Term of the Lease prior to Landlord delivering to Tenant an Offer Notice as defined in Exhibit D to this Third Amendment, Tenant shall have the right during the Second Extension Term to lease the Expansion Space upon the delivery of an Expansion Notice to Landlord as set forth below. If Tenant is interested in leasing the Expansion Space, then Tenant shall so notify Landlord in writing (“Expansion Notice”) that Tenant desires to lease the Expansion Space upon substantially the same terms and conditions of the Lease, as amended by this Third Amendment, including, without limitation, (i) for a term that is coterminous with the Term of the Lease for the Premises, as extended by the Second Extension Term and (ii) with Annual Rent for the Expansion Space being the same as the monthly installments of Annual Rent payable for the Premises as set forth in Paragraph 3 of this Third Amendment on a per rentable square foot basis; provided, however, the description and plans of the improvements to be constructed by Landlord for the Expansion Space shall be reasonably agreed to by Landlord and Tenant and the allowance for such improvements shall be $15.00 per square foot of space in the Expansion Space (the “Expansion Allowance”). The Term of the Lease with regard to the Expansion Space shall commence upon the later of (a) ninety (90) days after Tenant’s delivery of the Expansion Notice to Landlord or (b) February 1, 2014 (such later date, the “Expansion Commencement Date”). Receipt of an Expansion Notice by Landlord from Tenant shall be final and conclusive and deemed acceptance by Landlord of the expansion offer by Tenant contained in the Expansion Notice and Tenant shall not have the right to withdraw at a later date such Expansion Notice. Once Tenant has received an Offer Notice (as defined in Exhibit D to this Third Amendment), then Tenant may not exercise its expansion right under this Exhibit C for the Offered Space (as defined in Exhibit D to this Third Amendment) which is the subject of the Offer Notice.

In addition to the Expansion Allowance, Landlord agrees to provide Tenant with an additional allowance (the “Additional Expansion Allowance”) of up to $20.00 per square foot of space in the Expansion Space to be used by Tenant solely towards paying for constructing lab improvements in Building 6. In the event Tenant desires to utilize any portion of the Additional Expansion Allowance, then Tenant shall make a one-time request on or before the Expansion Commencement Date, indicating in such request the amount of such Additional Expansion Allowance Tenant desires that Landlord disburse. Landlord and Tenant hereby agree that in the event Tenant notifies Landlord in writing that Tenant desires any portion of the Additional

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Expansion Allowance, such portion requested by Tenant shall be amortized (at a rate of interest equal to eight percent (8%) per annum) over the period commencing on the Expansion Commencement Date and ending on the expiration of the Second Extension Term, and the monthly installments of Annual Rent payable by Tenant pursuant to the Lease, as amended by this Third Amendment, shall be increased by the monthly amount necessary to so amortize such Additional Expansion Allowance so disbursed by Landlord. Tenant agrees to execute promptly an amendment to the Lease reflecting the increase in the Annual Rent as described above.

Upon receipt of Tenant’s Expansion Notice, the parties hereto agree to enter into a lease amendment for the Expansion Space in accordance with the terms of this Exhibit C.

The expansion right granted in this Exhibit C must be exercised by Tenant on or before January 31, 2014 or this Exhibit C shall terminate and become null and void.

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EXHIBIT C-1

EXPANSION SPACE

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EXHIBIT D

RIGHT OF FIRST REFUSAL

THIS RIGHT OF FIRST REFUSAL is attached as Exhibit D to the Third Amendment to Lease between KBS NORTH CREEK, LLC, a Delaware limited liability company, as Landlord, and ALDER BIOPHARMACEUTICALS, INC., a Delaware corporation, as Tenant, and constitutes the further agreement between Landlord and Tenant as follows:

(a) “Offered Space” shall mean all office space in Building 4 that is made available from time-to-time by Landlord for lease to third party tenants (other than Landlord’s property manager or other agents or affiliated parties of Landlord).

(b) Provided that as of the date of the giving of the Offer Notice, (x) Tenant is the Tenant originally named herein, (y) Tenant actually occupies all of the Premises demised under the Lease as of the Effective Date of this Third Amendment and any space subsequently added to the Premises, and (z) no event of default or event which but for the passage of time or the giving of notice, or both, would constitute an event of default has occurred and is continuing, if at any time during the Second Extension Term and any subsequent extensions of the Term of the Lease beyond the Second Extension Term, any portion of the Offered Space is vacant and unencumbered by any rights of any third party, and if Landlord intends to enter into a lease (the “Proposed Lease”) for all or a portion of the Offered Space with anyone (a “Proposed Tenant”) other than the tenant then occupying such space (or its affiliates, subtenants or assignees), then Landlord shall first offer to Tenant the right to lease such Offered Space upon all the terms and conditions of the Proposed Lease for the Offered Space. Notwithstanding anything to the contrary in the Lease, the right of first refusal granted to Tenant under this Exhibit D shall be subject and subordinate to the herein reserved right of Landlord to renew or extend the term of any lease with the tenant then occupying such space (or any of its affiliates, subtenants or assignees), whether pursuant to a renewal or extension option in such lease or otherwise.

(c) Such offer shall be made by Landlord to Tenant in a written notice (hereinafter called the “Offer Notice”) which offer shall include a copy of the third party offer to lease which Landlord is willing to accept, designating the space being offered and specifying the terms for such Offered Space. Tenant may accept the offer set forth in the Offer Notice only by delivering to Landlord an unconditional acceptance (hereinafter called “Tenant’s Notice”) of such offer within fifteen (15) business days after delivery by Landlord of the Offer Notice to Tenant. Time shall be of the essence with respect to the giving of Tenant’s Notice. If Tenant does not accept (or fails to timely accept) an offer made by Landlord pursuant to the provisions of this Exhibit D with respect to the Offered Space designated in the Offer Notice, or if Tenant timely accepts such offer and fails to execute the Amendment (defined below) within thirty (30) days after the delivery of the Offer Notice, then Landlord shall be under no further obligation with respect to such space by reason of this Exhibit D, subject to Paragraph (e) below. In order to send the Offer Notice, Landlord does not need to have negotiated a complete lease with the Proposed Tenant but may merely have agreed upon the material economic terms for the Proposed Lease, and Tenant must make its decision with respect to the Offered Space as long as it has received a copy of the third party offer to lease which Landlord is willing to accept.

D-1

(d) Tenant must accept all Offered Space offered by Landlord at any one time if it desires to accept any of such Offered Space and may not exercise its right with respect to only part of such space. In addition, if Landlord desires to lease more than just the Offered Space to one tenant, Landlord may offer to Tenant pursuant to the terms hereof all such space which Landlord desires to lease, and Tenant must exercise its rights hereunder with respect to all such space and may not insist on receiving an offer for just the Offered Space.

(e) If Tenant at any time declines any Offered Space offered by Landlord, Tenant shall be deemed to have irrevocably waived all further rights under this Exhibit D, and Landlord shall be free to lease the Offered Space to the Proposed Tenant including on terms which may be less favorable to Landlord than those set forth in the Proposed Lease; provided, however, (i) if Landlord has not entered into a lease for all or any portion of such Offered Space with a third party within one hundred eighty (180) days following the delivery by Landlord to Tenant of the Offer Notice, then, so long as Landlord is not engaged in good faith negotiations with a third party to lease all or a portion of such Offered Space, the right of first refusal granted to Tenant in this Exhibit D shall once again be invoked and (ii) in the event that within the one hundred eighty (180) days following the delivery by Landlord to Tenant of the Offer Notice, the terms of the Proposed Lease become materially less favorable to Landlord than those set forth in the Offer Notice (it being understood and agreed that “materially less favorable” shall mean that the net present value of the material economic terms of the modified transaction is at least ten percent (10%) less than the net present value of the material economic terms set forth in the Offer Notice), Landlord agrees that Tenant’s rights under this Exhibit D with respect to such Offered Space shall be reinstated and Landlord shall provide Tenant with an Offer Notice if, as, and to the extent, required under the terms of this Exhibit D.

(f) In the event that Tenant exercises its rights to any Offered Space pursuant to this Exhibit D, then Landlord shall prepare, and Tenant shall execute, an amendment to the Lease which confirms such expansion of the Premises and the other provisions applicable thereto (the “Amendment”).

D-2

EX-10.16

EXHIBIT 10.16

Alder BioPharmaceuticals

July 19, 2005

Randall Schatzman

Re: Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc.

Dear Randall:

It is my pleasure to offer you a position with Alder BioPharmaceuticals, Inc. (the “Company”) as President and Chief Executive Officer, working in the Bothell, Washington office and reporting to the Company’s Board of Directors.

You and the Company entered into an offer letter agreement dated April 14, 2005 (the “Original Letter Agreement”) whereby the Company hired you as President and Chief Executive Officer and agreed to certain terms of employment. You and the Company hereby agree to amend and restate the Original Letter Agreement in its entirety to read as set forth herein.

Commencing on the effective date of the Original Letter Agreement, you will be paid a monthly salary of $24,166.67 in this exempt position, which is equivalent to $290,000.00 on an annualized basis. All salary paid to you shall be less applicable deductions and withholdings, and payable in accordance with the Company’s customary payroll practice.

You will be entitled to accrue vacation and sick dates in accordance with the Company’s policies as applicable to executive officers. The Company will provide you with the opportunity to participate in the standard benefits plans available (and as they become available) to other similarly situated employees, including medical, dental, vision and life insurance, as applicable, subject to any eligibility requirements imposed by such plans.

You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Board of Directors, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning shares of no more than one percent (1%) of the outstanding equity securities of any corporation whose stock is listed on a national stock exchange.

Alder BioPharmaceuticals, Inc.

21823 30^th Drive SE, Suite 200

Bothell, Washington 98021

You currently hold 1,146,667 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested.

For the purposes of this offer letter, the following defined terms shall apply:

“Cause” shall include, but not be limited to: (i) your continued failure, in the reasonable opinion of the Board, to perform one or more of your assigned duties or responsibilities to the Company, such failure being evidenced by a written report submitted on behalf of the Company to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board for correcting the asserted failure(s); (ii) your failure to follow the lawful directives of your manager(s), such failure being evidenced by a written report submitted by your manager(s) to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board; (iii) your material violation of any Company policy, as evidenced by your signature on a then-current copy of the Company Policy Handbook; (iv) your commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to the Company; (v) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (vi) your material breach of any of your obligations under any written agreement or covenant with the Company; or (vii) your conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the Board approve as the basis for termination of your employment.

A “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, a merger or other reorganization in which the Company is not the surviving entity or pursuant to which the shareholders of the Company immediately prior to the transaction own less than fifty percent (50%) of the combined voting power of the Company following the transaction, or the acquisition by one person or entity of more than fifty percent (50%) of the voting power of the Company in a single transaction or series of

related transactions; provided that none of the following shall be considered a Change of Control transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Company or (ii) an equity financing in which the Company is the surviving corporation.

A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary by more than twenty percent (20%), unless in connection with similar decreases of other similarly situated employees of the Company; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.

While we are pleased to make you this offer, we cannot make any representation regarding the nature or duration of your employment with the Company, except as set forth in this letter. Please understand that your employment with the Company will be “at-will” at all times. This means that either you or the Company may terminate your employment at any time, with or without notice, and with or without cause.

Federal law requires that all prospective employees present documentation verifying their identity and demonstrating that they are authorized to work in the United States. If you do not provide this documentation to the Company within 3 days of the effective date of the Original Letter Agreement, the Company will be required to end your employment. If you have any questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, please contact the undersigned.

To enable the Company to safeguard its proprietary and confidential information, it is a condition of employment that you agree to sign the Company’s standard form of “Proprietary Information and Inventions Agreement.” By signing below, you either acknowledge that you have previously signed a Proprietary Information and Inventions Agreement or agree that you will sign a Proprietary Information and Inventions Agreement on or prior to the effective date of the Original Letter Agreement. We understand that you are likely to have signed similar agreements with prior employers, and wish to impress upon you that the Company does not want to receive the confidential or proprietary information of others, and will support you in respecting your lawful obligations to prior employers.

This letter contains our complete understanding and agreement regarding the terms of your employment by the Company. There are no other, different or prior agreements or understandings on this or related subjects, except for the Proprietary Information and Inventions Agreement. Changes to the terms of your employment can be made only in a writing signed by you and the Company, although it is understood that the Company may, from time to time, in its sole discretion, adjust the compensation paid and benefits provided to you and its other employees, as well as job titles, duties, responsibilities, assignments and reporting relationships. This letter agreement shall be interpreted pursuant to the laws of the State of Washington.

We look forward to your continuing contributions to the Company. Please indicate your acceptance of this offer by signing the enclosed copy of this letter in the space indicated and return it to the undersigned on or before April 15, 2005. Please call me at (425) 527-2701 if you have any questions.

Sincerely,

AlderBioPharmaceuticals, Inc.

/s/ Mark Litton

Mark Litton

Chief Business Officer

ACCEPTANCE OF EMPLOYMENT OFFER:

I accept the offer of employment by Alder BioPharmaceuticals, Inc. on the terms described in this letter as of the date executed below.

Signature:	/s/ Randall C. Schatzman
	Randall Schatzman
Date:	July 19th, 2005

EX-10.17

EXHIBIT 10.17

April 13, 2012

Randall Schatzman

Re: Amendment to Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc. dated July 19, 2005

Dear Randall:

You and Alder BioPharmaceuticals, Inc. (the “Company”) entered into an amended and restated offer letter agreement dated July 19, 2005 (the “Original Letter Agreement”) whereby you agreed to certain terms of employment as described in that Original Letter Agreement. You and the Company hereby agree to amend the Original Letter Agreement as described in this letter amendment (the “Amendment”).

The Board of the Company intends to grant to you additional options to purchase Common Stock of the Company following the closing of the proposed Series D Preferred Stock financing (the “Financing”), in recognition of your continued service and the dilution that will result from the Financing. At the request of the investors participating in the Financing, the Company would like to memorialize the expected vesting acceleration that will be applicable to such additional option grants and any future option grants.

You and the Company hereby agree that the following paragraph at the top of the second page of the Original Letter Agreement shall be amended and restated as follows (amended language in italics):

“You currently hold 1,146,667 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options granted before April 1, 2012 then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options

granted before April 1, 2012 or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested. Additionally, in the event that (a) any options issued after April 1, 2012 that (i) do not remain in effect or (ii) are not assumed or substituted with a similarly equivalent option, restricted stock, stock appreciation rights, restricted stock units, or the like by the acquirer in connection with a Change of Control then, as of the date of the Change of Control, shall be deemed to have vested and/or (b) (i) within one year following the closing of a Change of Control, your employment is terminated by the Company or its successor other than for Cause or if you resign under circumstances that constitute a Constructive Termination, provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, or (ii) if you remain an employee on the one-year anniversary of the closing of the Change of Control then, as of the date of employment termination or upon such anniversary (as applicable), any options issued after April 1, 2012 that remain in effect or are assumed by the acquirer in connection with such Change of Control shall be deemed to have vested.”

In addition, the definition of “Constructive Termination” shall be amended and restated as follows:

“A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.”

[Signature Page Follows]

Except as otherwise provided in this Amendment, the remaining terms, including the vesting of any existing outstanding Common Stock or options to purchase Common Stock, will not be affected by this Amendment.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Clay B. Siegall

Clay Siegall

Chairman, Compensation Committee of the Board

ACCEPTANCE OF AMENDMENT:

I accept the Amendment described in this letter as of the date executed below (the “Effective Date”).

Signature:	/s/ Randall C. Schatzman
	Randall C. Schatzman, Ph.D.
Date:	April 13th, 2012

EX-10.18

EXHIBIT 10.18

Alder BioPharmaceuticals

July 19, 2005

John Latham

Re: Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc.

Dear John:

It is my pleasure to offer you a position with Alder BioPharmaceuticals, Inc. (the “Company”) as Chief Scientific Officer, working in the Bothell, Washington office and reporting to the Company’s Chief Executive Officer.

You and the Company entered into an offer letter agreement dated April 14, 2005 (the “Original Letter Agreement”) whereby the Company hired you as Chief Scientific Officer and agreed to certain terms of employment. You and the Company hereby agree to amend and restate the Original Letter Agreement in its entirety to read as set forth herein.

Commencing on the effective date of the Original Letter Agreement, you will be paid a monthly salary of $18,750.00 in this exempt position, which is equivalent to $225,000.00 on an annualized basis. All salary paid to you shall be less applicable deductions and withholdings, and payable in accordance with the Company’s customary payroll practice.

You will be entitled to accrue vacation and sick dates in accordance with the Company’s policies as applicable to executive officers. The Company will provide you with the opportunity to participate in the standard benefits plans available (and as they become available) to other similarly situated employees, including medical, dental, vision and life insurance, as applicable, subject to any eligibility requirements imposed by such plans.

You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Chief Executive Officer, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning shares of no more than one percent (1%) of the outstanding equity securities of any corporation whose stock is listed on a national stock exchange.

Alder BioPharmaceuticals, Inc.

21823 30^th Drive SE, Suite 200

Bothell, Washington 98021

You currently hold 1,146,667 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested.

For the purposes of this offer letter, the following defined terms shall apply:

“Cause” shall include, but not be limited to: (i) your continued failure, in the reasonable opinion of the Board, to perform one or more of your assigned duties or responsibilities to the Company, such failure being evidenced by a written report submitted on behalf of the Company to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board for correcting the asserted failure(s); (ii) your failure to follow the lawful directives of your manager(s), such failure being evidenced by a written report submitted by your manager(s) to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board; (iii) your material violation of any Company policy, as evidenced by your signature on a then-current copy of the Company Policy Handbook; (iv) your commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to the Company; (v) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (vi) your material breach of any of your obligations under any written agreement or covenant with the Company; or (vii) your conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the Board approve as the basis for termination of your employment.

A “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, a merger or other reorganization in which the Company is not the surviving entity or pursuant to which the shareholders of the Company immediately prior to the transaction own less than fifty percent (50%) of the combined voting power of the Company following the transaction, or the acquisition by one person or entity of more than fifty percent (50%) of the voting power of the Company in a single transaction or series of

related transactions; provided that none of the following shall be considered a Change of Control transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Company or (ii) an equity financing in which the Company is the surviving corporation.

A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary by more than twenty percent (20%); unless in connection with similar decreases of other similarly situated employees of the Company; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.

While we are pleased to make you this offer, we cannot make any representation regarding the nature or duration of your employment with the Company, except as set forth in this letter. Please understand that your employment with the Company will be “at-will” at all times. This means that either you or the Company may terminate your employment at any time, with or without notice, and with or without cause.

Federal law requires that all prospective employees present documentation verifying their identity and demonstrating that they are authorized to work in the United States. If you do not provide this documentation to the Company within 3 days of the effective date of the Original Letter Agreement, the Company will be required to end your employment. If you have any questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, please contact the undersigned.

To enable the Company to safeguard its proprietary and confidential information, it is a condition of employment that you agree to sign the Company’s standard form of “Proprietary Information and Inventions Agreement.” By signing below, you either acknowledge that you have previously signed a Proprietary Information and Inventions Agreement or agree that you will sign a Proprietary Information and Inventions Agreement on or prior to the effective date of the Original Letter Agreement. We understand that you are likely to have signed similar agreements with prior employers, and wish to impress upon you that the Company does not want to receive the confidential or proprietary information of others, and will support you in respecting your lawful obligations to prior employers.

This letter contains our complete understanding and agreement regarding the terms of your employment by the Company. There are no other, different or prior agreements or understandings on this or related subjects, except for the Proprietary Information and Inventions Agreement. Changes to the terms of your employment can be made only in a writing signed by you and the Company, although it is understood that the Company may, from time to time, in its sole discretion, adjust the compensation paid and benefits provided to you and its other employees, as well as job titles, duties, responsibilities, assignments and reporting relationships. This letter agreement shall be interpreted pursuant to the laws of the State of Washington.

We look forward to your continuing contributions to the Company. Please indicate your acceptance of this offer by signing the enclosed copy of this letter in the space indicated and return it to the undersigned on or before April 15, 2005. Please call me at (425) 527-2702 if you have any questions.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

Chief Executive Officer

ACCEPTANCE OF EMPLOYMENT OFFER:

I accept the offer of employment by Alder BioPharmaceuticals, Inc. on the terms described in this letter as of the date executed below.

Signature:	/s/ John Latham
	John Latham
Date:	7/19/05

EX-10.19

EXHIBIT 10.19

April 13, 2012

John Latham

Re: Amendment to Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc. dated July 19, 2005

Dear John:

You and Alder BioPharmaceuticals, Inc. (the “Company”) entered into an amended and restated offer letter agreement dated July 19, 2005 (the “Original Letter Agreement”) whereby you agreed to certain terms of employment as described in that Original Letter Agreement. You and the Company hereby agree to amend the Original Letter Agreement as described in this letter amendment (the “Amendment”).

The Board of the Company intends to grant to you additional options to purchase Common Stock of the Company following the closing of the proposed Series D Preferred Stock financing (the “Financing”), in recognition of your continued service and the dilution that will result from the Financing. At the request of the investors participating in the Financing, the Company would like to memorialize the expected vesting acceleration that will be applicable to such additional option grants and any future option grants.

You and the Company hereby agree that the following paragraph at the top of the second page of the Original Letter Agreement shall be amended and restated as follows (amended language in italics):

“You currently hold 1,146,667 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options granted before April 1, 2012 then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options

granted before April 1, 2012 or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested. Additionally, in the event that (a) any options issued after April 1, 2012 that (i) do not remain in effect or (ii) are not assumed or substituted with a similarly equivalent option, restricted stock, stock appreciation rights, restricted stock units, or the like by the acquirer in connection with a Change of Control then, as of the date of the Change of Control, shall be deemed to have vested and/or (b) within one year following the closing of a Change of Control, your employment is terminated by the Company or its successor other than for Cause or if you resign under circumstances that constitute a Constructive Termination, provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, any options issued after April 1, 2012 that remain in effect or are assumed by the acquirer in connection with such Change of Control shall be deemed to have vested.”

In addition, the definition of “Constructive Termination” shall be amended and restated as follows:

“A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.”

[Signature Page Follows]

Except as otherwise provided in this Amendment, the remaining terms, including the vesting of any existing outstanding Common Stock or options to purchase Common Stock, will not be affected by this Amendment.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

Chief Executive Officer

ACCEPTANCE OF AMENDMENT:

I accept the Amendment described in this letter as of the date executed below (the “Effective Date”).

Signature:	/s/ John Latham
	John Latham
Date:	April 14, 2012

EX-10.20

EXHIBIT 10.20

Alder BioPharmaceuticals

July 19, 2005

Mark Litton

Re: Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc.

Dear Mark:

It is my pleasure to offer you a position with Alder BioPharmaceuticals, Inc. (the “Company”) as Chief Business Officer, working in the Bothell, Washington office and reporting to the Company’s Chief Executive Officer.

You and the Company entered into an offer letter agreement dated April 14, 2005 (the “Original Letter Agreement”) whereby the Company hired you as Chief Business Officer and agreed to certain terms of employment. You and the Company hereby agree to amend and restate the Original Letter Agreement in its entirety to read as set forth herein.

Commencing on the effective date of the Original Letter Agreement, you will be paid a monthly salary of $18,750.00 in this exempt position, which is equivalent to $225,000.00 on an annualized basis. All salary paid to you shall be less applicable deductions and withholdings, and payable in accordance with the Company’s customary payroll practice.

You will be entitled to accrue vacation and sick dates in accordance with the Company’s policies as applicable to executive officers. The Company will provide you with the opportunity to participate in the standard benefits plans available (and as they become available) to other similarly situated employees, including medical, dental, vision and life insurance, as applicable, subject to any eligibility requirements imposed by such plans.

You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Chief Executive Officer, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning shares of no more than one percent (1%) of the outstanding equity securities of any corporation whose stock is listed on a national stock exchange.

Alder BioPharmaceuticals, Inc.

21823 30^th Drive SE, Suite 200

Bothell, Washington 98021

You currently hold 1,146,667 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested.

For the purposes of this offer letter, the following defined terms shall apply:

“Cause” shall include, but not be limited to: (i) your continued failure, in the reasonable opinion of the Board, to perform one or more of your assigned duties or responsibilities to the Company, such failure being evidenced by a written report submitted on behalf of the Company to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board for correcting the asserted failure(s); (ii) your failure to follow the lawful directives of your manager(s), such failure being evidenced by a written report submitted by your manager(s) to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board; (iii) your material violation of any Company policy, as evidenced by your signature on a then-current copy of the Company Policy Handbook; (iv) your commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to the Company; (v) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (vi) your material breach of any of your obligations under any written agreement or covenant with the Company; or (vii) your conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the Board approve as the basis for termination of your employment.

A “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, a merger or other reorganization in which the Company is not the surviving entity or pursuant to which the shareholders of the Company immediately prior to the transaction own less than fifty percent (50%) of the combined voting power of the Company following the transaction, or the acquisition by one person or entity of more than fifty percent (50%) of the voting power of the Company in a single transaction or series of related transactions; provided that none of the following shall be considered a Change of Control transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Company or (ii) an equity financing in which the Company is the surviving corporation.

A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary by more than twenty percent (20%); unless in connection with similar decreases of other similarly situated employees of the Company; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.

While we are pleased to make you this offer, we cannot make any representation regarding the nature or duration of your employment with the Company, except as set forth in this letter. Please understand that your employment with the Company will be “at-will” at all times. This means that either you or the Company may terminate your employment at any time, with or without notice, and with or without cause.

Federal law requires that all prospective employees present documentation verifying their identity and demonstrating that they are authorized to work in the United States. If you do not provide this documentation to the Company within 3 days of the effective date of the Original Letter Agreement, the Company will be required to end your employment. If you have any questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, please contact the undersigned.

To enable the Company to safeguard its proprietary and confidential information, it is a condition of employment that you agree to sign the Company’s standard form of “Proprietary Information and Inventions Agreement.” By signing below, you either acknowledge that you have previously signed a Proprietary Information and Inventions Agreement or agree that you will sign a Proprietary Information and Inventions Agreement on or prior to the effective date of the Original Letter Agreement. We understand that you are likely to have signed similar agreements with prior employers, and wish to impress upon you that the Company does not want to receive the confidential or proprietary information of others, and will support you in respecting your lawful obligations to prior employers.

This letter contains our complete understanding and agreement regarding the terms of your employment by the Company. There are no other, different or prior agreements or understandings on this or related subjects, except for the Proprietary Information and Inventions Agreement. Changes to the terms of your employment can be made only in a writing signed by you and the Company, although it is understood that the Company may, from time to time, in its sole discretion, adjust the compensation paid and benefits provided to you and its other employees, as well as job titles, duties, responsibilities, assignments and reporting relationships. This letter agreement shall be interpreted pursuant to the laws of the State of Washington.

We look forward to your continuing contributions to the Company. Please indicate your acceptance of this offer by signing the enclosed copy of this letter in the space indicated and return it to the undersigned on or before April 15, 2005. Please call me at (425) 527-2702 if you have any questions.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

Chief Executive Officer

ACCEPTANCE OF EMPLOYMENT OFFER:

I accept the offer of employment by Alder BioPharmaceuticals, Inc. on the terms described in this letter as of the date executed below.

Signature:	/s/ Mark Litton
	Mark Litton
Date:	July 19 2005

EX-10.21

EXHIBIT 10.21

April 13, 2012

Mark Litton

Re: Amendment to Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc. dated July 19, 2005

Dear Mark:

You and Alder BioPharmaceuticals, Inc. (the “Company”) entered into an amended and restated offer letter agreement dated July 19, 2005 (the “Original Letter Agreement”) whereby you agreed to certain terms of employment as described in that Original Letter Agreement. You and the Company hereby agree to amend the Original Letter Agreement as described in this letter amendment (the “Amendment”).

The Board of the Company intends to grant to you additional options to purchase Common Stock of the Company following the closing of the proposed Series D Preferred Stock financing (the “Financing”), in recognition of your continued service and the dilution that will result from the Financing. At the request of the investors participating in the Financing, the Company would like to memorialize the expected vesting acceleration that will be applicable to such additional option grants and any future option grants.

You and the Company hereby agree that the following paragraph at the top of the second page of the Original Letter Agreement shall be amended and restated as follows (amended language in italics):

“You currently hold 1,146,667 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options granted before April 1, 2012 then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options

granted before April 1, 2012 or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested. Additionally, in the event that (a) any options issued after April 1, 2012 that (i) do not remain in effect or (ii) are not assumed or substituted with a similarly equivalent option, restricted stock, stock appreciation rights, restricted stock units, or the like by the acquirer in connection with a Change of Control then, as of the date of the Change of Control, shall be deemed to have vested and/or (b) within one year following the closing of a Change of Control, your employment is terminated by the Company or its successor other than for Cause or if you resign under circumstances that constitute a Constructive Termination, provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, any options issued after April 1, 2012 that remain in effect or are assumed by the acquirer in connection with such Change of Control shall be deemed to have vested.”

In addition, the definition of “Constructive Termination” shall be amended and restated as follows:

“A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.”

[Signature Page Follows]

Except as otherwise provided in this Amendment, the remaining terms, including the vesting of any existing outstanding Common Stock or options to purchase Common Stock, will not be affected by this Amendment.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

Chief Executive Officer

ACCEPTANCE OF AMENDMENT:

I accept the Amendment described in this letter as of the date executed below (the “Effective Date”).

Signature:	/s/ Mark Litton
	Mark Litton
Date:	4/13/12

EX-10.22

EXHIBIT 10.22

Alder BioPharmaceuticals

July 19, 2005

Jeff Smith

Re: Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc.

Dear Jeff:

It is my pleasure to offer you a position with Alder BioPharmaceuticals, Inc. (the “Company”) as Chief Medical Officer, working in the Bothell, Washington office and reporting to the Company’s Chief Executive Officer.

You and the Company entered into an offer letter agreement dated April 14, 2005 (the “Original Letter Agreement”) whereby the Company hired you as Chief Medical Officer and agreed to certain terms of employment. You and the Company hereby agree to amend and restate the Original Letter Agreement in its entirety to read as set forth herein.

Commencing on the effective date of the Original Letter Agreement, you will be paid a monthly salary of $20,833.34 in this exempt position, which is equivalent to $250,000.00 on an annualized basis. All salary paid to you shall be less applicable deductions and withholdings, and payable in accordance with the Company’s customary payroll practice.

You will be entitled to accrue vacation and sick dates in accordance with the Company’s policies as applicable to executive officers. The Company will provide you with the opportunity to participate in the standard benefits plans available (and as they become available) to other similarly situated employees, including medical, dental, vision and life insurance, as applicable, subject to any eligibility requirements imposed by such plans.

You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Chief Executive Officer, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning shares of no more than one percent (1%) of the outstanding equity securities of any corporation whose stock is listed on a national stock exchange.

Alder BioPharmaceuticals, Inc.

21823 30^th Drive SE, Suite 200

Bothell, Washington 98021

You currently hold 160,000 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested.

For the purposes of this offer letter, the following defined terms shall apply:

“Cause” shall include, but not be limited to: (i) your continued failure, in the reasonable opinion of the Board, to perform one or more of your assigned duties or responsibilities to the Company, such failure being evidenced by a written report submitted on behalf of the Company to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board for correcting the asserted failure(s); (ii) your failure to follow the lawful directives of your manager(s), such failure being evidenced by a written report submitted by your manager(s) to the Board so indicating your failure and including a remedy or remedies reasonably satisfactory to the Board; (iii) your material violation of any Company policy, as evidenced by your signature on a then-current copy of the Company Policy Handbook; (iv) your commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in material injury to the Company; (v) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (vi) your material breach of any of your obligations under any written agreement or covenant with the Company; or (vii) your conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state that a majority of the non-employee members of the Board approve as the basis for termination of your employment.

A “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, a merger or other reorganization in which the Company is not the surviving entity or pursuant to which the shareholders of the Company immediately prior to the transaction own less than fifty percent (50%) of the combined voting power of the Company following the transaction, or the acquisition by one person or entity of more than fifty percent (50%) of the voting power of the Company in a single transaction or series of

related transactions; provided that none of the following shall be considered a Change of Control transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Company or (ii) an equity financing in which the Company is the surviving corporation.

A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary by more than twenty percent (20%); unless in connection with similar decreases of other similarly situated employees of the Company; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.

While we are pleased to make you this offer, we cannot make any representation regarding the nature or duration of your employment with the Company, except as set forth in this letter. Please understand that your employment with the Company will be “at-will” at all times. This means that either you or the Company may terminate your employment at any time, with or without notice, and with or without cause.

Federal law requires that all prospective employees present documentation verifying their identity and demonstrating that they are authorized to work in the United States. If you do not provide this documentation to the Company within 3 days of the effective date of the Original Letter Agreement, the Company will be required to end your employment. If you have any questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, please contact the undersigned.

To enable the Company to safeguard its proprietary and confidential information, it is a condition of employment that you agree to sign the Company’s standard form of “Proprietary Information and Inventions Agreement.” By signing below, you either acknowledge that you have previously signed a Proprietary Information and Inventions Agreement or agree that you will sign a Proprietary Information and Inventions Agreement on or prior to the effective date of the Original Letter Agreement. We understand that you are likely to have signed similar agreements with prior employers, and wish to impress upon you that the Company does not want to receive the confidential or proprietary information of others, and will support you in respecting your lawful obligations to prior employers.

This letter contains our complete understanding and agreement regarding the terms of your employment by the Company. There are no other, different or prior agreements or understandings on this or related subjects, except for the Proprietary Information and Inventions Agreement. Changes to the terms of your employment can be made only in a writing signed by you and the Company, although it is understood that the Company may, from time to time, in its sole discretion, adjust the compensation paid and benefits provided to you and its other employees, as well as job titles, duties, responsibilities, assignments and reporting relationships. This letter agreement shall be interpreted pursuant to the laws of the State of Washington.

We look forward to your continuing contributions to the Company. Please indicate your acceptance of this offer by signing the enclosed copy of this letter in the space indicated and return it to the undersigned on or before April 15, 2005. Please call me at (425) 527-2702 if you have any questions.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

Chief Executive Officer

ACCEPTANCE OF EMPLOYMENT OFFER:

I accept the offer of employment by Alder BioPharmaceuticals, Inc. on the terms described in this letter as of the date executed below.

Signature:	/s/ Jeff Smith
	Jeff Smith
Date:	07/19/2005

EX-10.23

EXHIBIT 10.23

April 13, 2012

Jeff Smith

Re: Amendment to Amended and Restated Offer of Employment At Alder BioPharmaceuticals, Inc. dated July 19, 2005

Dear Jeff:

You and Alder BioPharmaceuticals, Inc. (the “Company”) entered into an amended and restated offer letter agreement dated July 19, 2005 (the “Original Letter Agreement”) whereby you agreed to certain terms of employment as described in that Original Letter Agreement. You and the Company hereby agree to amend the Original Letter Agreement as described in this letter amendment (the “Amendment”).

The Board of the Company intends to grant to you additional options to purchase Common Stock of the Company following the closing of the proposed Series D Preferred Stock financing (the “Financing”), in recognition of your continued service and the dilution that will result from the Financing. At the request of the investors participating in the Financing, the Company would like to memorialize the expected vesting acceleration that will be applicable to such additional option grants and any future option grants.

You and the Company hereby agree that the following paragraph at the top of the second page of the Original Letter Agreement shall be amended and restated as follows (amended language in italics):

“You currently hold 160,000 shares of the Company’s Common Stock issued pursuant the Common Stock Purchase Agreement between you and the Company dated April 7, 2004 (the “Purchase Agreement”). Certain of the shares are subject to a Repurchase Option (as defined in the Purchase Agreement). If your employment is terminated by the Company or its successor other than for Cause (as defined below) or if you resign under circumstances that constitute a Constructive Termination (as defined below), provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, (1) all of the shares then remaining subject to the Repurchase Option shall be released from such Repurchase Option and (2) all unvested stock options granted before April 1, 2012 then held by you shall be deemed to have vested. Additionally, upon a Change of Control (as defined below), the vesting of any unvested stock options granted before April 1, 2012 or shares of restricted stock held by you immediately prior to such Change of Control, including any shares then subject

to the Repurchase Option, shall accelerate such that the options or restricted stock shall become fully vested. Additionally, in the event that (a) any options issued after April 1, 2012 that (i) do not remain in effect or (ii) are not assumed or substituted with a similarly equivalent option, restricted stock, stock appreciation rights, restricted stock units, or the like by the acquirer in connection with a Change of Control then, as of the date of the Change of Control, shall be deemed to have vested and/or (b) within one year following the closing of a Change of Control, your employment is terminated by the Company or its successor other than for Cause or if you resign under circumstances that constitute a Constructive Termination, provided that in each such case such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) and you execute a general release agreement prepared by the Company releasing any and all known and unknown claims you may have against the Company upon such termination, then, as of the date of employment termination, any options issued after April 1, 2012 that remain in effect or are assumed by the acquirer in connection with such Change of Control shall be deemed to have vested.”

In addition, the definition of “Constructive Termination” shall be amended and restated as follows:

“A “Constructive Termination” shall be deemed to occur if you resign within thirty (30) days following any of: (i) a reduction of your then-current base salary; (ii) a material adverse change in your position causing such position to be of materially reduced status or responsibility; or (iii) relocation of your assigned work site more than fifty (50) miles from your work site immediately prior to such relocation.”

[Signature Page Follows]

Except as otherwise provided in this Amendment, the remaining terms, including the vesting of any existing outstanding Common Stock or options to purchase Common Stock, will not be affected by this Amendment.

Sincerely,

Alder BioPharmaceuticals, Inc.

/s/ Randall C. Schatzman

Randall C. Schatzman, Ph.D.

Chief Executive Officer

ACCEPTANCE OF AMENDMENT:

I accept the Amendment described in this letter as of the date executed below (the “Effective Date”).

Signature:	/s/ Jeff Smith
	Jeff Smith
Date:	4/16/12

EX-21.1

Exhibit 21.1

List of Subsidiaries of Alder BioPharmaceuticals, Inc.

Subsidiaries	Incorporation
Alder BioPharmaceuticals Pty. Ltd.	Australia
AlderBio Holdings LLC	Nevada

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of Alder BioPharmaceuticals, Inc. of our report dated March 17, 2014 relating to the financial statements of Alder BioPharmaceuticals, Inc., which appear in such Registration Statement. We also consent to the reference to us under the heading “Experts.”

/s/ PricewaterhouseCoopers LLP

Seattle, Washington

March 17, 2014