Achillion Pharmaceuticals, Inc'

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Achillion Pharmaceuticals, Inc. The Birth and
Life of a Biotech Company
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FORWARD-LOOKING STATEMENTS

• The following presentation contains
  forward-looking statements about Achillion
  Pharmaceuticals, Inc., including, but not limited
  to, statements about
• the expected timing, progress and success of our
  current and anticipated clinical trials and
  preclinical research programs the anticipated
  efficacy of our drug candidates the expected
  benefits of our drug candidates over other
  therapies statistical information concerning the
  markets in which we expect our drug candidates to
  compete, if approved and estimates of our future
  financial performance.
• While the management of Achillion
  Pharmaceuticals, Inc. makes its best efforts to
  be accurate in making forward-looking statements,
  forward-looking statements reflect our current
  assumptions and views with respect to future
  events and are subject to risks and uncertainties
  that could cause actual results to vary
  materially from those described in the
  forward-looking statements, including those
  described in Risk Factors beginning on page 6
  of the Companys annual report on Form 10-K dated
  March 28, 2007.

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INVESTMENT HIGHLIGHTS

• Late-stage candidate with clear treatment
  advantages in
• multiple HIV market segments (4B market)
• Novel HCV program with potential to become
  cornerstone
• of future therapy (4B market)
• Second proprietary HCV program featuring protease
  inhibitor with superior potency
• Exciting antibacterial candidate showing potent
  and broad spectrum activity (2B market)
• Sustainable pipeline driven by proven internal
  discovery engine

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Product Pipeline
Multiple Infectious Disease Candidates Across
Large Market Opportunities
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PRODUCT PIPELINE
Advanced Product Profile
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ELVUCITABINE
Evolution of HIV Therapies
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ELVUCITABINE
Best in Class L-Cytosine Analogue

• Potent Antiviral Activity
• Wild-Type HIV
• 4 to 6 fold greater potency than 3TC
• Potent activity against HIV mutants resistant
• to other nucleosides
• 3TC resistant (M184V) HIV
• Ten-fold greater potency than 3TC
• Superior PK Profile
• Plasma half-life of 100hrs
• Creates barrier of resistance
• Clean Safety Profile
• L-configuration associated with clean safety
  profile

Elvucitabine Beta-L-5-Fluoro-2,3-Dideoxy-2,3-D
idehydrocytidine (Beta-L-Fd4C)
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ELVUCITABINE
Clinical Study Establishes Potent Antiviral
Activity
Mean Change in HIV RNA (log)
Mean Change in HIV RNA (log)

• 7 Day study of Elvucitabine monotherapy in
  treatment-naïve HIV subjects (ACH443-017)
• Potent antiviral activity prior to steady state
  PK
• No safety issues

• 21-day study of Elvucitabine in
  combination with Kaletra (ACH443-012)
• Potent antiviral activity in combination
• No safety issues

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ELVUCITABINE
PK Barrier to Resistance
Mean Elvucitabine Plasma Concentrations
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NS4A ANTAGONISTS
Highly Attractive Profile

• Potent activity against HCV
• Novel mechanism of action
• Prevents formation of
• replicase complex
• Clinically validated
• Not cross-resistant to other
• anti-HCV agents
• Polymerase Inhibitors NM-283
• Protease Inhibitors VX-950
• and SCH-3034
• Demonstrated antiviral activity
• in HCV patients

Superior Potency Against Other Clinical Stage
HCV Inhibitors
In vitro replicon activity
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NS4A Antagonist Novel Mechanism
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NS4A ANTAGONISTS

• Anti-Viral Activity Trial ACH171-002

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NS4A ANTAGONISTS
HCV Commercialization Evolving Treatment
Paradigm
Investigational treatment regimens combine a
direct antiviral with pegylated interferon /-
ribavirin
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NS4A ANTAGONISTS
Well positioned to Become Cornerstone of HCV
Therapy
Future of HCV therapy migrating to oral
combination of two or more direct antivirals
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ACH-702
Highly Attractive Profile for the Treatment of
Serious Hospital-Acquired Infections

• Rapidly bactericidal
• Broad spectrum of activity
• Activity against Gram positive bacteria
• Activity against Gram negative bacteria
• Excellent activity against respiratory and
  atypical bacteria
• IV and oral formulations
• Again, novel MOA

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ACH-702
Highly Active Against Drug-Resistant Clinical
Programs
Activity against Clinical Pathogens MIC (mg/ml)
Drug
E. Faecalis (New York City)
MRSA (Boston)
MRSA (Michigan)
MRSA (Philadelphia)
gt16
16
16
16
Levofloxacin
gt16
2
gt32
2
Vancomycin
1
gt16
2
2
Linezolid
ACH-702 0.12 0.25 0.25
0.25
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ACH-702

Potent Activity Against Broad Range of MRSA
Isolates
In vitro activity translates well into In vivo
potency
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ACH-702
Commercial Summary
Highly Attractive Profile Compared to Other
Antibiotics
Daptomycin
Linezolid
Vancomycin
ACH-702
Rapidly bactericidal
Bacteriostatic
Slowly bactericidal
Rapidly bactericidal
Bactericidal Activity
Gram positive
Gram positive
Gram positive
Gram positive
Spectrum
MRSA Active
MRSA Active
MRSA Active
MRSA active
VRSA Active
VRSA Active
Resistant
VRSA active
No Activity
No Activity
No activity
Gram negative
IV only
IV and oral
IV only
IV and oral
IV and Oral
Status Initiate Phase 1 First half 2008
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OPERATIONS OVERVIEW
Well-Positioned for Future Growth
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CAPITALIZATION AND LIQUIDITY
( in millions)
Dec 31, 2006 Actual
Dec 31, 2007 Estimated

• Cash and short term investments 62 30
• Other assets 8 10
• 70 40
• Current and long-term liabilities 19 24
• Common stock and paid-in-capital 170 170
• Shareholders (Deficit) Equity
  (119)
  (149)
• 70 40

• Operations infrastructure is mature and operating
  effectively and efficiently across functional
  groups
• 65 employees with 40 in discovery-based product
  research
• Financial footing is solid with longer-term
  investor set and ability to raise incremental
  capital

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EXPERIENCED MANAGEMENT TEAM
Novartis, MedImmune, OraPharma, JJ

• Mike Kishbauch
• President and CEO
• Milind Deshpande, Ph.D.
• EVP, Chief Scientific Officer
• Mary Kay Fenton
• VP, Chief Financial Officer
• Gautam Shah, Ph.D.
• SVP, Chief Compliance Officer

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PRODUCT PIPELINE
Advanced Product Profile In 24 months
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PRODUCT PIPELINE
Advanced Product Profile In 24 months
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LIVES OF A BIOTECH
The Life Cycle of a Biotech

• I. The Blush of Youth
• First successes are heady and addicting (be they
  in financing, technology, or infrastructure
  development)
• External business communities support and applaud
  success
• Often, managements first opportunity to run a
  venture
• II. The Hard and Ugly Truth
• Scientific development can be exhilarating,
  heart-breaking, and often, just plain boring
• Raising money is a constant, nagging need and a
  drain on mgmt
• Good investors are a tough bunch
• III. Maturity Acceptance of the Business Model
• High risk/high reward model
• Portfolio management key
• Milestone achievement is the benchmark that
  matters

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IN THE BEGINNING
The Blush of Youth (2000-2002)

• Typical biotech launch model founding scientist
  with a business advisor/angel investor
• Primary assets licensed from Yale and NCI
• Only one of those assets still in play seven
  years later
• Licensing lessons learned
• Technology platform vs. product assets
• Early activities focused substantially on fund
  raising
• Seed funding totaled 250,000 from major VC
• Who subsequently bailed out
• Incorporation to launch period totaled 18 months
  (Aug 98 Feb 00)
• Funding was the largest biotech launch funding to
  date (27MM)

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IN THE BEGINNING
The Blush of Youth (continued)

• Establishing laboratory space significant
  challenge
• Incubator space scarce
• Science Park was the only game in town
• Significant improvement in supportive
  infrastructure seven years later
• Funding opportunities related to physical plant
• Personnel issues also posed challenges
• Prior relationships key
• Recruiting into Connecticut has both
  positives/negatives
• Development of banking relationships began early
• Useful for strategic idea generation

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THE NEXT LIFE
The Hard Ugly Truth (2003-2004)

• Lead drug candidate experienced (not atypical)
  clinical development failure
• Extended half-life of elvucitabine was not well
  understood
• Dosing was 10-20x higher than current dosing
• FDA-imposed clinical hold followed
• Hold ultimately in place for 18 months
• Significant turnover in senior executive team
• Departure of CEO and CMO
• Reduction in force from 75 employees to 60
• Period of retrenchment focused on discovery
  programs and building value from early-stage
  programs

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THE THIRD AGE
Maturity (2005-2007)

• Pipeline maturity, management strength and
  premier partnership collaboration allowed for IPO
• Challenging market for bioscience financing
• Exceptional level of market enthusiasm for novel
  HCV program
• Management team credibility and experience key
• Todays public market challenges do not differ
  substantially from those of the past
• Different audience assessing strategy and
  milestone achievement
• IPO is no longer a liquidity event
• Communication another key to value creation
• Sustainable revenue generation from product sales
  still substantially into future

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Achillion Pharmaceuticals, Inc.Innovative
Treatments For Infectious Disease