ACHN Achillion Pharmaceuticals Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(RULE 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Check the appropriate box:

Achillion Pharmaceuticals, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

Achillion Pharmaceuticals, Inc.

1777 Sentry Parkway West, VEVA Building #14 Suite 200

Blue Bell, Pennsylvania 19422

To be held on [●], 20[●]

To the stockholders of Achillion Pharmaceuticals, Inc.:

You are cordially invited to attend a special meeting of stockholders (the “Special Meeting”) of Achillion Pharmaceuticals, Inc., a Delaware corporation (“Achillion”, “we”, “us”, or “our”), to be held on [●], 20[●], at 9:00 a.m., Eastern time, at [●].

At the Special Meeting, you will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated October 15, 2019, among Achillion, Alexion Pharmaceuticals, Inc., a Delaware corporation (“Alexion”), and Beagle Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Alexion (“Merger Sub”), including the form of CVR Agreement to be entered into at or prior to the effective time of the Merger by Alexion and a rights agent mutually acceptable to Alexion and Achillion (the “CVR Agreement”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into Achillion, and Achillion will continue as the surviving corporation and as a wholly owned subsidiary of Alexion (the “Merger”). At the Special Meeting, you will also be asked to consider and vote on a non-binding, advisory proposal to approve compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

If the Merger is completed, for each share of common stock that you own, you will be entitled to receive (i) $6.30 in cash (the “Cash Merger Consideration”) and (ii) one contractual contingent value right pursuant to the CVR Agreement (a “CVR”), in each case without interest (collectively, the “Merger Consideration”).

The Board of Directors of Achillion (the “Board of Directors”), after considering the factors more fully described in the enclosed proxy statement, has unanimously (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, Achillion and its stockholders; (2) declared that it is advisable for Achillion to enter into the Merger Agreement; and (3) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

The enclosed proxy statement provides detailed information about the Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. The proxy statement also describes the actions and determinations of the Board of Directors in connection with its evaluation of the Merger Agreement and the Merger. We encourage you to read the proxy statement and its annexes, including the Merger Agreement, carefully and in their entirety, as they contain important information.

Whether or not you plan to attend the Special Meeting in person, please sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other

nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions.

Your vote is very important, regardless of the number of shares that you own. We cannot complete the Merger unless the proposal to adopt the Merger Agreement is approved by the affirmative vote of the holders of at least a majority of the outstanding shares of Achillion common stock.

If you have any questions or need assistance voting your shares, please contact our Proxy Solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Stockholders May Call:

Toll-Free at (888) 750-5834 (from the U.S. and Canada)

or +1 (412) 232-3651 (from other locations)

Banks & Brokers May Call Collect: (212) 750-5833

On behalf of the Board of Directors, I thank you for your support and appreciate your consideration of this matter.

Sincerely,

Martha E. Manning, Esq. Corporate Secretary

The accompanying proxy statement is dated [●], 20[●] and, together with the enclosed form of proxy card, is first being mailed on or about [●], 20[●].

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

Achillion Pharmaceuticals, Inc.

1777 Sentry Parkway West, VEVA Building #14 Suite 200

Blue Bell, Pennsylvania 19422

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON [●], 20[●]

Notice is hereby given that a special meeting of stockholders (the “Special Meeting”) of Achillion Pharmaceuticals, Inc., a Delaware corporation (“Achillion”, “we”, “us”, or “our”), will be held on [●], 20[●], at 9:00 a.m., Eastern time, at [●] for the following purposes:

 

1.

To consider and vote on the proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated October 15, 2019, among Achillion, Alexion Pharmaceuticals, Inc., a Delaware corporation (“Alexion”), and Beagle Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Alexion (“Merger Sub”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into Achillion, and Achillion will continue as the surviving corporation and as a wholly owned subsidiary of Alexion (the “Merger”);

 

2.

To consider and vote on any proposal to adjourn the Special Meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting;

 

3.

To consider and vote on the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger; and

 

4.

To transact any other business that may properly come before the Special Meeting or any adjournment, postponement or other delay of the Special Meeting.

Only stockholders of record as of the close of business on [●], 20[●] are entitled to notice of the Special Meeting and to vote at the Special Meeting or any adjournment, postponement or other delay thereof.

The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

Whether or not you plan to attend the Special Meeting in person, please sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions.

 

By the Order of the Board of Directors,

Martha E. Manning, Esq. Corporate Secretary

Dated: [●], 20[●]

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE; (2) THROUGH THE INTERNET; OR (3) BY SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before it is voted at the Special Meeting.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions.

If you are a stockholder of record, voting by ballot at the Special Meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain a “legal proxy” in order to vote in person at the Special Meeting.

If you fail to (1) return your proxy card; (2) grant your proxy electronically over the Internet or by telephone; or (3) attend the Special Meeting in person, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement but will have no effect on the other two proposals.

We encourage you to read the accompanying proxy statement and its annexes carefully and in their entirety. If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our Proxy Solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Stockholders May Call:

Toll-Free at (888) 750-5834 (from the U.S. and Canada)

or +1 (412) 232-3651 (from other locations)

Banks & Brokers May Call Collect: (212) 750-5833

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS

The following questions and answers address some commonly asked questions regarding the Merger, the Merger Agreement and the Special Meeting. These questions and answers may not address all questions that are important to you. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. You may obtain additional information without charge by following the instructions under the caption “Where You Can Find More Information.”

Even if you plan to attend the Special Meeting in person, to ensure that your shares will be represented at the Special Meeting we encourage you to sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any proxy previously submitted.

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If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions. If you hold your shares in “street name,” you may not vote your shares in person at the Special Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

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Such payments, if any, will be made on or prior to the date that is fifteen (15) business days following the achievement of the Clinical Trial Milestone or the Regulatory Approval Milestone, as applicable.

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The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

Achillion may be required to pay Alexion a termination fee of $20,000,000 upon the termination of the Merger Agreement under specified circumstances, and Alexion may be required to pay to Achillion a reverse termination fee between $30,000,000 and $60,000,000 if the Merger Agreement is terminated under different specified circumstances, in each case as described in the section captioned “The Merger Agreement — Termination Fees,” beginning on page [●] of this proxy statement.

If a quorum is present at the Special Meeting, the failure of any stockholder of record to (1) submit a signed proxy card; (2) grant a proxy electronically over the Internet or by telephone; or (3) vote in person by ballot at the Special Meeting will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. If you hold your shares in “street name” and a quorum is present at the Special Meeting, the failure to instruct your bank, broker or other nominee how to vote your shares will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. If a quorum is present at the Special Meeting, abstentions will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.

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The failure of any stockholder of record to (1) submit a signed proxy card; (2) grant a proxy electronically over the Internet or by telephone; or (3) vote in person by ballot at the Special Meeting will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee how to vote your shares will not have any effect on the adjournment proposal and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger. Abstentions will have the same effect as a vote “AGAINST” the adjournment proposal and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

If your shares are held through a bank, broker or other nominee, you are considered the “beneficial owner” of shares of common stock held in “street name.” In that case, this proxy statement has been

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forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting. You are also invited to attend the Special Meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the Special Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

Voting of Shares Held in Street Name. If your shares are held in “street name,” meaning they are held for your account by a broker or other nominee, you will receive instructions from your broker or other nominee regarding how to vote your shares over the Internet or by mail. You should follow those instructions. If you wish to vote your shares in person at the Special Meeting, contact your broker or other nominee who holds your shares to obtain a brokers’ proxy card and bring it with you to the Special Meeting. You will not be able to vote in person at the Special Meeting unless you have a proxy from your broker issued in your name giving you the right to vote your shares.

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If you hold your shares of common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the Special Meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

Please sign, date and return (or grant your proxy electronically over the Internet or by telephone) each proxy card and voting instruction card that you receive.

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You should consult your own tax advisor to determine the U.S. federal income tax considerations relating to the Merger and the receipt of, and payments with respect to, CVRs applicable to you in light of your own particular circumstances and any considerations arising under the laws of any state, local or foreign taxing jurisdiction. A more complete description of certain U.S. federal income tax considerations of the Merger is provided under the caption “The Merger — U.S. Federal Income Tax Considerations of the Merger.”

At the Effective Time, each Out of the Money Option will be cancelled and, except as described below, converted into the right to receive a cash payment with respect to each share subject to the Out of the Money Option upon each Valuation Point which occurs after the Effective Time, equal to (i) the amount by which, as of the Valuation Point, the sum of (x) the Cash Merger Consideration, (y) the amount per share in cash previously paid in respect of any earlier Valuation Points (if any) and (z) the amount per share in cash to be paid at such Valuation Point under the CVR Agreement exceeds the exercise price payable per share under such Out of the Money Option, less (ii) the amount of all payments previously received with respect to such Out of the Money Option, on the terms and conditions described below under the caption “The Merger Agreement — Treatment of Equity Awards.”

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Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Stockholders May Call:

Toll-Free at (888) 750-5834 (from the U.S. and Canada)

or +1 (412) 232-3651 (from other locations)

Banks & Brokers May Call Collect: (212) 750-5833

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FORWARD-LOOKING STATEMENTS

This proxy statement, the documents to which we refer you in this proxy statement and information included in oral statements or other written statements made or to be made by us or on our behalf contain forward-looking information related to Alexion, Achillion and the proposed acquisition of Achillion by Alexion that involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements include, among other things:

Risks and uncertainties include, among other things:

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A further description of risks and uncertainties relating to Achillion can be found in Achillion’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and in its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and available at www.sec.gov and www.achillion.com.

These forward-looking statements are based on numerous assumptions and assessments made by Alexion and Achillion in light of their respective experiences and perceptions of historical trends, current conditions, business strategies, operating environment, future developments and other factors they believe are appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this document could cause actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in the forward-looking statements in this

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document are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this document are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this document.

The information contained in this document is as of [●], 20[●]. Achillion assumes no obligation to update forward-looking statements contained in this document as the result of new information or future events or developments.

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THE SPECIAL MEETING

The enclosed proxy is solicited on behalf of the Board of Directors for use at the Special Meeting.

Date, Time and Place

We will hold the Special Meeting on [●], 20[●], at 9:00 a.m., Eastern time, at [●]

Purpose of the Special Meeting

At the Special Meeting, we will ask stockholders to vote on proposals to (i) adopt the Merger Agreement, (ii) adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting and (iii) approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

Record Date; Shares Entitled to Vote; Quorum

Only stockholders of record as of the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting. A list of stockholders entitled to vote at the Special Meeting will be available at our principal executive offices, located at 1777 Sentry Parkway West, VEVA Building #14 Suite 200, Blue Bell, Pennsylvania 19422, during regular business hours for a period of no less than ten (10) days before the Special Meeting and at the place of the Special Meeting during the meeting.

As of the Record Date, there were [●] shares of common stock outstanding and entitled to vote at the Special Meeting.

The holders of a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at the Special Meeting. In the event that a quorum is not present at the Special Meeting, it is expected that the meeting will be adjourned to solicit additional proxies.

Vote Required; Abstentions and Broker Non-Votes

The affirmative vote of the holders of a majority of the outstanding shares of Achillion common stock is required to adopt the Merger Agreement. Adoption of the Merger Agreement by stockholders is a condition to the closing of the transactions contemplated by the Merger Agreement.

Approval of the proposal to adjourn the Special Meeting requires the affirmative vote of a majority of the shares of stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote on the subject matter. Approval, by non-binding, advisory vote, of compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger requires the affirmative vote of a majority of the shares of stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote on the subject matter.

If a stockholder abstains from voting, that abstention will have the same effect as if the stockholder voted “AGAINST” the proposal to adopt the Merger Agreement. For stockholders who attend the meeting or are represented by proxy and abstain from voting, the abstention will have the same effect as if the stockholder voted “AGAINST” any proposal to adjourn the Special Meeting to a later date to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting and “AGAINST” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

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Each “broker non-vote” will also count as a vote “AGAINST” the proposal to adopt the Merger Agreement, but will have no effect on (i) any proposal to adjourn the Special Meeting to a later date to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting or (ii) the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger. A “broker non-vote” generally occurs when a bank, broker or other nominee holding shares on your behalf does not vote on a proposal because the bank, broker or other nominee has not received your voting instructions and lacks discretionary power to vote the shares. “Broker non-votes,” if any, will be counted for the purpose of determining whether a quorum is present.

Shares Held by Achillion’s Directors and Executive Officers

As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, [●] shares of common stock, representing approximately [●]% of the shares of common stock outstanding on the Record Date.

Voting of Proxies

If your shares are registered in your name with our transfer agent, you may cause your shares to be voted by returning a signed and dated proxy card in the accompanying prepaid envelope, or you may vote in person at the Special Meeting. Additionally, you may grant a proxy electronically over the Internet or by telephone by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to grant a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.

If you plan to attend the Special Meeting and wish to vote in person, you will be given a ballot at the Special Meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the Special Meeting in person. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any previously submitted proxy.

Voting instructions are included on your proxy card. All shares represented by properly signed and dated proxies received in time for the Special Meeting will be voted at the Special Meeting in accordance with the instructions of the stockholder. Properly signed and dated proxies that do not contain voting instructions will be voted (1) “FOR” adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee or attending the Special Meeting and voting in person with a “legal proxy” from your bank, broker or other nominee. If such a service is provided, you may vote over the Internet or telephone through your bank, broker or other nominee by following the instructions on the voting form provided by your bank, broker or other nominee. If you do not return your bank’s, broker’s or other nominee’s voting form, do not vote via the Internet or telephone through your bank, broker or other nominee, if possible, or do not attend the Special Meeting and vote in person with a “legal proxy” from your bank, broker or other nominee, it will have the same effect as if you voted “AGAINST” the proposal to adopt the Merger Agreement but will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

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Revocability of Proxies

If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the Special Meeting by:

If you have submitted a proxy, your appearance at the Special Meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.

If you hold your shares of common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the Special Meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

Any adjournment, postponement or other delay of the Special Meeting, including for the purpose of soliciting additional proxies, will allow stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned, postponed or delayed.

Board of Directors’ Recommendation

The Board of Directors, after considering various factors described under the caption “The Merger — Recommendation of the Board of Directors and Reasons for the Merger,” has unanimously (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, Achillion and its stockholders; (2) declared that it is advisable for Achillion to enter into the Merger Agreement; and (3) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

Solicitation of Proxies

The expense of soliciting proxies will be borne by Achillion. We have retained Innisfree M&A Incorporated, a proxy solicitation firm (the “Proxy Solicitor”), to solicit proxies in connection with the Special Meeting at a cost of approximately $25,000 plus expenses. We will also indemnify the Proxy Solicitor against losses arising out of its provisions of these services on our behalf. In addition, we may reimburse banks, brokers and other nominees representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by our directors, officers and employees, personally or by telephone, email, fax, over the Internet or other means of communication. No additional compensation will be paid for such services.

Anticipated Date of Completion of the Merger

Assuming timely satisfaction of necessary closing conditions, including the approval by stockholders of the proposal to adopt the Merger Agreement, we anticipate that the Merger will be consummated in the first half of 2020.

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Appraisal Rights

If the Merger is completed, stockholders who do not vote in favor of the adoption of the Merger Agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the Merger under Section 262. This means that stockholders are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court, so long as they comply with the procedures established by Section 262. Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights.

Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the Merger Consideration.

To exercise your appraisal rights, you must (i) deliver a written demand for appraisal to Achillion before the vote is taken on the adoption of the Merger Agreement; (ii) not submit a proxy or otherwise vote in favor of the proposal to adopt the Merger Agreement; and (iii) continue to hold your shares of common stock of record through the Effective Time. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex D to this proxy statement. If you hold your shares of common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such bank, broker or nominee.

If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice and, if applicable, a separate copy of our proxy materials and annual report, please notify your broker, or direct your request via mail to Achillion Pharmaceuticals, Inc., Attention: Martha E. Manning, Esq., Corporate Secretary, 1777 Sentry Parkway West, VEVA Building #14 Suite 200, Blue Bell, Pennsylvania 19422 or via telephone to (215) 709-3040. Upon written or oral request, we will promptly deliver to you a separate Notice and proxy materials. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding” of their communications should contact their broker.

Questions and Additional Information

If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our Proxy Solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Stockholders May Call:

Toll-Free at (888) 750-5834 (from the U.S. and Canada)

or +1 (412) 232-3651 (from other locations)

Banks & Brokers May Call Collect: (212) 750-5833

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THE MERGER

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Parties Involved in the Merger

Achillion Pharmaceuticals, Inc.

1777 Sentry Parkway West, VEVA Building #14 Suite 200

Blue Bell, Pennsylvania 19422

Achillion is a clinical-stage biopharmaceutical company focused on advancing its oral factor D inhibitors into late-stage development and commercialization. Each of the product candidates in Achillion’s factor D portfolio was discovered in its laboratories and is wholly owned by Achillion. Achillion is focusing its product development activities on complement-mediated diseases where there are no approved therapies or significant unmet medical needs persist despite existing therapies.

Achillion’s common stock is listed on NASDAQ under the symbol “ACHN”.

Alexion Pharmaceuticals, Inc.

121 Seaport Boulevard

Boston, Massachusetts 02210

Alexion is a global biopharmaceutical company focused on serving patients and families affected by rare diseases through the innovation, development and commercialization of life-changing therapies. It is a global leader in complement inhibition and has developed and commercialized two approved complement inhibitors to treat patients with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS), as well as the first approved complement inhibitor to treat anti-acetylcholine receptor (AChR) antibody-positive generalized myasthenia gravis (gMG) and anti-AQP4 antibody-positive neuromyelitis optica spectrum disorder (NMOSD). In addition, Alexion has two highly innovative enzyme replacement therapies and the first and only approved therapies for patients with life-threatening and ultra-rare metabolic disorders, hypophosphatasia (HPP) and lysosomal acid lipase deficiency (LAL-D). In addition to its marketed therapies, Alexion has a diverse pipeline resulting from internal innovation and business development with strategic focus in hematology and nephrology, neurology, metabolics and neonatal Fc receptor (FcRn).

Alexion’s common stock is listed on NASDAQ under the symbol “ALXN”.

Beagle Merger Sub, Inc.

c/o Alexion Pharmaceuticals, Inc.

121 Seaport Boulevard

Boston, Massachusetts 02210

Merger Sub is a wholly-owned subsidiary of Alexion and was formed on October 15, 2019, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement.

Effect of the Merger

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is completed, Merger Sub will merge with and into Achillion, and Achillion will continue as the Surviving Corporation and as a wholly owned subsidiary of Alexion. As a result of the Merger, our common stock will no longer be publicly traded and

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will be delisted from NASDAQ. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation.

The Effective Time will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we, Alexion and Merger Sub may agree and specify in the certificate of merger).

Effect on Achillion if the Merger is Not Completed

If the Merger Agreement is not adopted by stockholders or if the Merger is not completed for any other reason, stockholders will not receive any payment for their shares of common stock. Instead, Achillion will remain an independent public company, our common stock will continue to be listed and traded on NASDAQ and registered under the Exchange Act and we will continue to file periodic reports with the SEC. In addition, if the Merger is not completed, we expect that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which Achillion operates and risks related to adverse economic conditions.

Furthermore, if the Merger is not completed, and depending on the circumstances that caused the Merger not to be completed, the price of our common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of common stock. If the Merger is not completed, the Board of Directors will continue to evaluate and review Achillion’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the Merger Agreement is not adopted by stockholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Board of Directors will be offered or that Achillion’s business, prospects or results of operation will not be adversely impacted.

Upon termination of the Merger Agreement under specified circumstances, Achillion will be required to pay Alexion a termination fee of $20,000,000. Alexion will be required to pay to Achillion a reverse termination fee between $30,000,000 and $60,000,000 if the Merger Agreement is terminated under different specified circumstances. For more information please see the section captioned “The Merger Agreement — Termination Fees,” beginning on page [●] of this proxy statement.

Merger Consideration

In the Merger, each outstanding share of Achillion common stock will be canceled and converted into the right to receive the Merger Consideration (except for any shares owned by Alexion or Merger Sub or stockholders who are entitled to and who properly exercise appraisal rights under the DGCL).

After the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights will have the right to receive a payment for the “fair value” of their shares as determined pursuant to an appraisal proceeding as contemplated by the DGCL, as described below under the caption “— Appraisal Rights,” beginning on page [●] of this proxy statement.)

Background of the Merger

Achillion periodically confers with other biotechnology and pharmaceutical companies regarding a variety of potential partnerships, licensing arrangements, joint ventures, collaborations and other strategic transactions. In

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connection with this process and based on emerging clinical data, commencing in September 2018, at the direction of the Board of Directors, Achillion management began actively exploring potential partnerships regarding the development of ACH-5228 and ACH-4471, Achillion’s leading product candidates. From October 2018 through 2019, Achillion met with over thirty (30) potential counterparties, including Alexion, and considered a broad spectrum of potential strategic transactions, ranging from geographically-defined, molecule-specific and therapeutically-defined partnerships to broader collaborations regarding multiple product candidates, geographies and indications.

In connection with the exploration of Achillion’s strategic options, Achillion had discussions with twenty-one (21) counterparties under confidentiality agreements (each, a “CDA”), including with Alexion. Achillion entered into its CDA with Alexion, effective October 11, 2018, and Alexion thereafter began preliminary due diligence. Only two (2) of the CDAs contained standstill provisions, including one with Alexion, and of these, neither contained a “don’t ask, don’t waive” restriction.

Among the other counterparties with whom Achillion entered into CDAs, one (1) company submitted a term sheet regarding a partnership outside the United States, which the Board of Directors determined did not properly reflect the value of Achillion’s product candidates. Achillion and such company subsequently agreed to terminate the discussion regarding a partnership. Another party, Company A, expressed strong interest in pursuing a strategic transaction with Achillion, and representatives of Achillion had periodic discussions regarding such interest with Company A through September 2019. The eighteen (18) other counterparties with whom Achillion entered into CDAs did not pursue any strategic transaction or propose any terms for such a transaction after conducting preliminary due diligence investigation on Achillion.

On February 10, 2019, Aradhana Sarin, Chief Strategy and Business Officer of Alexion, sent a letter to Anthony Gibney, Chief Business Officer of Achillion, making a non-binding offer to acquire all of the outstanding common stock of Achillion for upfront cash consideration of $3.00 per share (the “February 10 Proposal”).

On February 11, 2019, the Board of Directors held a meeting, which included members of senior management and representatives of Centerview. The Board of Directors discussed the February 10 Proposal and determined that the proposal did not properly reflect the full value of Achillion. Following the meeting, at the direction of the Board of Directors, Achillion management communicated to Alexion that the Board of Directors had rejected the February 10 Proposal.

On February 12, 2019, Achillion engaged Skadden, Arps, Slate, Meagher and Flom LLP (“Skadden”) as legal counsel in connection with any strategic transaction that it might pursue.

On February 18, 2019, Dr. Sarin delivered a letter to Mr. Gibney, making a revised non-binding offer to acquire all of the outstanding common stock of Achillion for an aggregate price of $5.00 per share, which consisted of upfront cash consideration of $3.75 per share plus one non-transferable contingent value right with a nominal value of up to $1.25 per share in cash, which would become payable following completion of a successful Phase III or other pivotal clinical trial of ACH-5228 in any indication (the “February 18 Proposal”). The February 18 Proposal also requested a 45-day exclusivity period.

On February 20, 2019, the Board of Directors held a meeting, which included members of senior management and representatives of Centerview and Skadden. The Board of Directors discussed the February 18 Proposal, the improvements in value as compared to the February 10 Proposal, including the addition of contingent consideration, and the potential for achieving the milestone underlying the contingent consideration. The Board of Directors again considered Achillion’s prospects and risks as a stand-alone company, including with respect to Achillion’s future capital requirements, and determined that the February 18 Proposal still did not reflect the full value of Achillion. Following the meeting, at the direction of the Board of Directors, Achillion management communicated to Alexion that the Board of Directors had rejected the February 18 Proposal.

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Following the Company’s rejection of the February 18 Proposal, Achillion and Alexion resumed discussions with respect to a potential global partnership regarding ACH-5228 and ACH-4471, and the parties negotiated the terms for such a partnership for the next month.

In late March, Achillion and Alexion agreed to postpone further discussions regarding the global partnership until after results for Achillion’s Phase I Multiple Ascending Dose study for ACH-5228 (the “MAD Study”) became available.

On May 24, 2019, Dr. Sarin called Mr. Gibney and tentatively indicated that Alexion was considering making a revised proposal to acquire Achillion with upfront cash consideration of $5.00 per share. Consistent with his previous discussions with the Board of Directors regarding the value of Achillion, Mr. Gibney informed Dr. Sarin that such a proposal was unlikely to be accepted by the Board of Directors. The Board of Directors was later made aware of the communication. Alexion made no formal offer pursuant to such terms.

On May 30, 2019, Achillion entered into a CDA with Company A.

On June 3, 2019, Joseph Truitt, Chief Executive Officer of Achillion, and Mr. Gibney met with Ludwig Hantson, Ph.D., Chief Executive Officer of Alexion, and Dr. Sarin and provided Alexion with updated information regarding Achillion’s clinical programs, including with respect to the ongoing MAD Study.

On June 4, 2019, representatives of Achillion met with representatives of Company A and provided Company A with updated information regarding Achillion’s clinical programs, including with respect to the ongoing MAD Study.

On June 5, 2019, Company A informed Achillion that it was considering potentially acquiring Achillion. The Board of Directors was made aware of the communication, but no proposal for an acquisition transaction was actually received from Company A, written or otherwise.

On June 19, 2019, representatives of Achillion met with representatives of Alexion and discussed Achillion’s clinical programs, including with respect to the ongoing MAD Study. Later that day, after the meeting between representatives of Achillion and Alexion, Dr. Sarin met with Mr. Gibney, indicated that Alexion was considering making an improved proposal to acquire Achillion and asked for Mr. Gibney’s perspectives. Consistent with his discussion with the Board of Directors on February 20, 2019, Mr. Gibney discussed with Dr. Sarin the potential proposal from Alexion.

On June 21, 2019, Dr. Hantson called Mr. Truitt and indicated that Alexion intended to make an improved proposal to acquire Achillion.

On June 21, 2019, Dr. Sarin delivered a letter to Mr. Truitt, making a non-binding offer to acquire all of the outstanding common stock of Achillion for upfront cash consideration of $5.50 per share plus one non-transferable contingent value right with a nominal value of up to $2.50 per share in cash, including $1.50 per share payable upon the start of a Phase III clinical trial for ACH-5228 (defined as dosing of the first patient in a pivotal study) and $1.00 per share upon the approval by the FDA of the combination of ACH-4471 with Soliris or Ultomiris for the treatment of patients with paroxysmal nocturnal hemoglobinuria (“PNH”) (the “June 21 Proposal”). The June 21 Proposal also included a request that Achillion enter into an exclusivity agreement through an expected August 19 announcement date.

On June 27, 2019, the Board of Directors held a meeting, which included members of senior management, and representatives of Centerview and Skadden. During the meeting, members of senior management discussed with the Board of Directors the implied valuation of the June 21 Proposal and the discussions with Alexion leading to such proposal, and Centerview shared preliminary illustrative financial analyses of Achillion. The Board of Directors, together with senior management and representatives of Centerview and Skadden, discussed various

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strategic alternatives for Achillion, including other transactions such as a sale to Company A, or potential partnerships, the potential benefits of a broader outreach to other potential counterparties regarding an acquisition of Achillion and the accompanying risk of a public disclosure of information with respect to any proposed transaction. Following discussion of the advantages and disadvantages of a broader outreach, the Board of Directors authorized Centerview and Achillion management to initiate contact with six (6) additional potential counterparties (based in part on the knowledge that the Board of Directors had gathered as a result of the management’s broad partnership outreach process throughout 2018 and 2019) in order to gauge interest in a strategic transaction, including a potential acquisition of Achillion, and to inform Alexion that the June 21 Proposal was not sufficient but that access to further due diligence and discussions among legal advisors would be granted.

Following this meeting, Centerview contacted four (4) other potential counterparties: Company A, Company B, Company C and Company D. Company A and Company B were receptive to the outreach and scheduled management presentations, while Company C and Company D declined to participate. Achillion management also contacted two (2) additional counterparties: Company E and Company F. Company E and Company F declined to pursue any kind of strategic transaction with Achillion.

On July 8, 2019, representatives of Achillion met representatives of Company A in person for a management presentation and the parties discussed potential strategic transactions between the two parties, including the potential acquisition of Achillion by Company A.

On July 11, 2019, a representative of Company A contacted Mr. Gibney and another representative of Achillion, and reaffirmed Company A’s interest in a potential acquisition of Achillion.

On July 13, 2019, Dr. Sarin called Mr. Gibney and discussed the potential improvement of Alexion’s offer to acquire Achillion.

On July 15, 2019, Skadden received a draft merger agreement (the “Merger Agreement”) from Foley Hoag LLP (“Foley”), counsel to Alexion in connection with the potential acquisition.

On July 17, 2019, representatives of Achillion had a teleconference with representatives of Company B for a management presentation and the parties discussed potential strategic transactions between the two parties, including the potential acquisition of Achillion by Company B.

On July 19, 2019, the Strategy Committee of the Board of Directors (the “Strategy Committee”), a standing committee charged with evaluating strategic opportunities, held a meeting, which included senior management and representatives of Centerview and Skadden. During the meeting, the Strategy Committee discussed with management and Centerview the status of discussions regarding the potential sale of Achillion, including the continued engagement with Alexion, Centerview’s outreach to the four (4) other potential counterparties and management’s outreach to Company E and Company F, which resulted in expressions of interest in acquiring Achillion from Company A and Company B, Achillion’s interactions with additional third-parties, including Company E and Company F, and management’s subsequent engagement with Company A and Company B.

On July 22, 2019, Achillion publicly announced the results of the MAD Study.

On July 23, 2019, Skadden received a draft form of the CVR Agreement from Foley.

On July 26, 2019, the Board of Directors held a meeting, which included members of senior management and representatives of Centerview and Skadden. During the meeting, the Board discussed recent developments in ACH-5228, including the announcement of the MAD Study, and the increase in the stock price of Achillion following such announcement. The Board of Directors also discussed with management and Centerview the status of the discussions regarding the potential sale of Achillion, including the level of engagement with

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Alexion, Company A and Company B. In addition, the Board of Directors approved the entry into an amended and restated engagement letter with Centerview to serve as financial advisor to Achillion in connection with a possible strategic transaction, which amended and restated the terms of an engagement letter that Achillion and Centerview had entered into on January 22, 2015.

On July 29, 2019, Mr. Truitt and Mr. Gibney met in person with Dr. Hantson, Dr. Sarin, John Orloff, M.D., Executive Vice President, Head of Research and Development of Alexion, and Paul Clancy, Executive Vice President, Chief Financial Officer of Alexion, and discussed the potential acquisition of Achillion by Alexion and certain due diligence matters.

On July 30, 2019, Company B informed Centerview that it would not pursue any strategic transaction with Achillion, including an acquisition transaction.

On August 8, 2019, representatives of Achillion discussed due diligence materials with representatives of Alexion. Following the meeting, representatives of Alexion informed Achillion that Alexion needed to review the diligence materials further, and that Alexion could not complete its evaluation of the potential transaction within its previously-communicated timeline of mid-August, 2019.

On August 14, 2019, Alexion informed Achillion that Alexion wished to postpone pursuing the potential transaction until after Achillion’s upcoming pre-IND meeting with the FDA regarding the development of ACH-5228 (the “Pre-IND Meeting”).

On September 5, 2019, Company A informed Achillion that it was no longer interested in pursuing an acquisition of Achillion. Instead, it was interested in pursuing a global partnership with Achillion with respect to ACH-5228 and third-generation oral factor D inhibitors.

On September 11, 2019, Achillion met with the FDA to discuss the development of ACH-5228.

On September 12, 2019, the Achillion Strategy Committee held a meeting, which included senior management and representatives of Centerview and Skadden. During the meeting, Achillion management reported on the recent meeting with the FDA and, together with Centerview, discussed with the Strategy Committee members providing information regarding the Pre-IND Meeting to Alexion and Company A, with a view towards assessing their respective interests in continuing to pursue a potential strategic transaction. The Board of Directors discussed the engagement levels of each of Alexion and Company A in pursuing a strategic transaction with Achillion, noting that Company A had solely expressed interest in pursuing a partnership with Achillion as opposed to making an offer to acquire Achillion. The Strategy Committee expressed its support for management to continue to engage with both Alexion and Company A.

On September 13, 2019, Mr. Gibney called Dr. Sarin and provided her with updates regarding the Pre-IND Meeting. On the same day, representatives of Achillion spoke to a representative of Company A and provided him with updates regarding Achillion’s meeting with the FDA.

On September 17, 2019, representatives of Achillion provided representatives of Alexion with additional information regarding the Pre-IND Meeting.

On September 21, 2019, Dr. Sarin delivered a letter to Mr. Truitt, proposing a revised non-binding offer to acquire all of the outstanding common stock of Achillion for an aggregate price of $8.65 per share, which consisted of upfront cash consideration of $6.15 per share plus one contingent value right with a nominal value of up to $2.50 per share in cash, including $1.50 per share payable upon the start of a Phase III clinical trial for ACH-5228 and $1.00 per share upon the approval by the FDA of the combination of ACH-4471 with Soliris or Ultomiris for the treatment of patients with PNH (the “September 21 Proposal”). Compared with the June 21 Proposal, the upfront cash consideration increased from $5.50 per share to $6.15 per share, with the value and the underlying milestones of the contingent value right unchanged. The September 21 Proposal also included a request that Achillion enter into an exclusivity agreement through an expected October 23 announcement date.

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On September 22, 2019, the Board of Directors held a meeting, which included members of senior management and representatives of Centerview and Skadden. During the meeting, the Board of Directors, together with management and representatives of Centerview and Skadden, discussed various strategic considerations, including the September 21 Proposal, the history of negotiation with Alexion, Achillion’s other strategic options, including a potential partnership transaction with Company A regarding ACH-5228 and third-generation oral factor D inhibitors and Achillion’s prospects and risks as a stand-alone company (including with respect to Achillion’s future capital requirements). Achillion management updated the Board of Directors on upcoming meetings with the FDA and expected timing for data readouts. At the meeting, Centerview also discussed with the Board of Directors strategies for obtaining an improved offer from Alexion, including potentially making a counteroffer. Additionally, Mr. Gibney updated the board on the status of discussions with Company A, noting that it continued to focus on a partnership with respect to ACH-5228 and third-generation oral factor D inhibitors as opposed to an acquisition, and that it would not be in a position to provide a term sheet with respect to the structure and value associated with such partnership until mid-October at the earliest. Following the discussion, the Board of Directors authorized Mr. Gibney to contact Dr. Sarin to gauge Alexion’s reaction to a potential counteroffer and instructed him to communicate to Dr. Sarin that the Board of Directors had rejected the request for exclusivity. The Board of Directors also held an executive session, which did not include representatives of Centerview and Skadden or management, and continued to discuss the advantages and disadvantages of a potential transaction with Alexion, a potential partnership with Company A, Achillion’s prospects and risks as a stand-alone company, including with respect to Achillion’s future capital requirements, and strategies for obtaining an improved offer.

On September 23, 2019, the Board of Directors held a meeting to continue the discussions that had occurred during its September 22 meeting and receive responses to various questions posed to management. During the meeting, Mr. Truitt further discussed with the Board of Directors various strategic alternatives for Achillion, including the September 21 Proposal, a potential partnership transaction with Company A regarding ACH-5228 and third-generation oral factor D inhibitors and Achillion’s prospects and risks as a stand-alone company, including with respect to Achillion’s future capital requirements. The Board of Directors directed Mr. Truitt to continue engaging Alexion and Company A regarding a potential strategic transaction.

On September 23, 2019, following the direction of the Board of Directors, Mr. Gibney called Dr. Sarin and informed her that Alexion would likely need to improve its offer of upfront cash consideration, that the Board of Directors had rejected Alexion’s request for exclusivity, and that she would be provided with a further response following Achillion’s regularly-scheduled Board Meeting on September 26 and 27.

Also on September 23, 2019, representatives of Achillion informed Company A that Achillion had received a revised acquisition proposal and requested that Company A accelerate the evaluation of a potential partnership and reconsider whether it would acquire Achillion.

On September 25, 2019, Company A informed Achillion and Centerview that it was only interested in entering into a global partnership with Achillion regarding ACH-5228 and third-generation oral factor D inhibitors, not the acquisition of Achillion, and that it could not accelerate the timing of its evaluation of the potential partnership.

On September 26 and 27, 2019, the Board of Directors held a regularly-scheduled two-day in-person meeting in New York, New York, where the Board of Directors discussed the potential entry into a strategic transaction with Alexion or Company A, and various matters in the ordinary course of Achillion’s business. Skadden attended the meeting session regarding a potential transaction via teleconference while Centerview attended in person. The Board of Directors discussed the most recent developments with respect to Achillion’s product candidates and the expected timeline for certain developments. Mr. Gibney reported on his latest discussions with Dr. Sarin, his guidance to her to improve the Alexion offer, and her response. Management discussed with the Board of Directors financial projections prepared by management and the underlying assumptions and methodologies and representatives of Centerview discussed with the Board of Directors the preliminary illustrative financial analyses of Centerview based on these projections. Centerview also reviewed with the Board of Directors the

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status of discussion regarding a potential strategic transaction, including the fact that Alexion had submitted four (4) written proposals, and that the other potential counter party, Company A, was only interested in a partnership transaction, had not yet proposed the terms for such partnership, and had not provided any assurance as to when they would provide such terms. The Board of Directors then discussed management’s financial projections, Centerview’s preliminary illustrative financial analyses, Achillion’s strategic alternatives, including Achillion’s prospects and risks as a stand-alone company, including with respect to Achillion’s future capital requirements, the timing and regulatory considerations of a potential transaction, and the terms of the draft Merger Agreement, including the right the Board of Directors would have with respect to consideration of a Superior Proposal (as defined in the Merger Agreement) that may be made after the announcement of any transaction. Centerview then discussed with the Board of Directors strategies for obtaining an improved offer from Alexion, including potentially making a counteroffer and the parameters for such counteroffer. Following discussion, the Board of Directors authorized Centerview and Mr. Gibney to formally deliver a counteroffer to Alexion with an emphasis on improving the upfront cash consideration.

Later on September 26, 2019, following discussion with the Board of Directors, Mr. Gibney provided a counteroffer to Dr. Sarin with upfront cash consideration of $6.75 per share, with the value and the underlying milestones for the contingent value right unchanged from the September 21 Proposal. On the same day, Achillion authorized Skadden to negotiate the transaction documents with Foley. Skadden sent a revised draft of the Merger Agreement to Foley.

On September 27, 2019, Skadden sent a revised draft of the CVR Agreement to Foley. Skadden and Foley continued to negotiate the Merger Agreement, the CVR Agreement and various transaction agreements up until the execution of the definitive agreement by Achillion and Alexion.

On September 30, 2019, Dr. Sarin called Mr. Gibney with a revised non-binding proposal, which was characterized as Alexion’s “best and final” offer, to acquire all of the outstanding common stock of Achillion for an for an aggregate price of up to $8.30 per share, which consisted of upfront cash consideration of $6.30 per share plus one (1) CVR with a nominal value of up to $2.00 per share in cash, including $1.00 per share payable following the start of a Phase III clinical trial for ACH-5228 and $1.00 per share payable upon the approval by the FDA of ACH-4471 (the “September 30 Proposal”). Dr. Sarin noted that the revised offer incorporated a thorough review of the Merger Agreement and CVR Agreement drafts mark-ups, a more definitive evaluation of transaction and closing costs and further due diligence. Compared with the September 21 Proposal, the upfront cash consideration increased from $6.15 per share to $6.30 per share and the nominal value of the CVR payable upon satisfaction of the milestones decreased in the aggregate from $2.50 per share to $2.00 per share. The September 30 Proposal also included a reverse termination fee of 4.5% of the upfront net cash consideration, payable to Achillion in the event the transaction does not receive antitrust clearance in the United States. The September 30 Proposal also included a request for exclusivity.

On October 1, 2019, the Board of Directors held a meeting, which included members of senior management and representatives of Centerview and Skadden. Representatives of Skadden reviewed with the board their fiduciary duties as well as certain antitrust considerations, including the impact on the timeline for closing and strategies for addressing these considerations. Management discussed with the Board of Directors the financial projections prepared by management and the underlying assumptions and methodologies, and representatives of Centerview discussed with the Board of Directors preliminary illustrative financial analyses of Centerview based on these projections. Based on its financial analyses, Centerview discussed with the Board of Directors the comparison between the September 21 Proposal and the September 30 Proposal, including the fact that the September 30 Proposal offered greater upfront cash consideration while, based on certain assumptions provided by Achillion’s management regarding the probability that the milestones underlying the CVR would be realized and the timing thereof, representing a lower net present value due to the decrease in the nominal value of the CVR. The Board of Directors then discussed various strategic considerations, including Achillion’s prospects and risks as a stand-alone company, including with respect to Achillion’s future capital requirements, the milestones underlying the CVR, the probability that either milestone would be realized and the timing thereof, the advantages and

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disadvantages of increased upfront cash consideration and the decreased nominal value of the CVR, the fact that Company A had not engaged further with Achillion regarding a potential partnership, the fact that the other potential counterparties had declined to pursue a strategic transaction with Achillion, and the strategies for mitigating the risks that Achillion could face in the event that the transaction did not close, including the fact that Alexion had agreed to pay a reverse termination fee to Achillion at a level that could potentially be further improved. The Board of Directors also held an executive session, which included Skadden but not representatives of Centerview or members of management, and continued to discuss the advantages and disadvantages of the potential acquisition by Alexion. With respect to the September 30 Proposal, the Board of Directors discussed the greater upfront cash payment (despite the potentially lower net present value as calculated by Centerview based on certain assumptions provided by Achillion’s management regarding the probability that the milestones underlying the CVR would be realized and the timing thereof) and the risks associated with each of the milestones in the various proposals. Following the discussion, the Board of Directors concluded that the September 30 Proposal offered more certain value to Achillion stockholders than the September 21 Proposal and that the parties were reasonably likely to reach definitive agreement on the terms of the September 30 Proposal, which reflected Alexion’s review of the proposed terms of the Merger Agreement and CVR Agreement, as well as further due diligence and other considerations. Following discussion, the Board of Directors unanimously agreed that Achillion should pursue the transaction with Alexion on the terms of the September 30 Proposal. The Board of Directors also directed management to continue to resolve the outstanding issues in the transaction documents and to negotiate the reverse termination fee with a view towards mitigating Achillion’s risks if the transaction did not close.

During the period from October 1, 2019 through the execution of the definitive agreement on October 15, 2019, Skadden continued to exchange drafts of transaction documents with Foley, while management and Skadden continued to resolve the outstanding issues in such documents in a manner consistent with the prior discussions with the Board of Directors. Following negotiations, Alexion agreed to pay to Achillion an increased reverse termination fee between $30,000,000 and $60,000,000 if the Merger Agreement is terminated under different specified circumstances. For more information on these termination fees, see the section of this proxy statement captioned “The Merger Agreement — Termination Fees,” beginning on page [●] of this proxy statement.

During the same period, the representatives of Achillion responded to various due diligence questions and requests for information from Alexion.

On October 14, 2019, Mr. Truitt discussed with Dr. Hantson matters related to the proposed acquisition of Achillion by Alexion.

On October 15, 2019, the Board of Directors held a meeting, attended by members of senior management and representatives of Centerview and Skadden. Representatives of Skadden reviewed with the Board of Directors the resolution of the remaining open legal issues and the final material terms of the Merger Agreement and the CVR Agreement for the proposed transaction. Management discussed with the Board of Directors the financial projections and the underlying assumptions and methodologies, including changes in such projections since the Board last reviewed the projections on September 26, 2019, as the result of further analysis by management of the potential market for Achillion’s product candidates. For more information on these projections, see the section of this proxy statement captioned “The Merger — Certain Financial Projections,” beginning on page [●] of this proxy statement. Representatives of Centerview reviewed with the Board of Directors Centerview’s financial analysis of the Merger Consideration, and rendered to the Board of Directors an oral opinion, which was subsequently confirmed by delivery of a written opinion dated such date that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion, the Merger Consideration to be paid to the holders of shares of Achillion common stock (other than as specified in such opinion) pursuant to the Merger Agreement and the CVR Agreement was fair, from a financial point of view, to such holders. For a detailed discussion of Centerview’s opinion, please see the section entitled “The Merger — Opinion of Achillion’s Financial Advisor,” beginning on page [●] of this proxy statement.

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After further discussion, including a discussion regarding the various factors described under the caption “The Merger — Recommendation of the Board of Directors and Reasons for the Merger,” the Board of Directors unanimously: (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, Achillion and its stockholders; (2) declared that it is advisable for Achillion to enter into the Merger Agreement; and (3) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

On October 15, 2019, Achillion, Alexion and Merger Subsidiary executed and delivered the Merger Agreement.

On October 16, 2019, Achillion and Alexion issued a joint press release announcing the execution of the Merger Agreement prior to the opening of trading on NASDAQ.

Recommendation of the Board of Directors and Reasons for the Merger

Recommendation of the Board of Directors

The Board of Directors has unanimously (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, Achillion and its stockholders; (2) declared that it is advisable for Achillion to enter into the Merger Agreement; and (3) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Achillion to its named executive officers in connection with the Merger.

Reasons for the Merger

In evaluating the Merger Agreement and the transactions contemplated thereby, the Board of Directors consulted with outside legal counsel, its financial advisor and Achillion’s senior management. In recommending that Achillion’s stockholders vote in favor of adoption of the Merger Agreement, the Board of Directors considered numerous positive factors relating to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the following material factors (which factors are not necessarily presented in order of relative importance):

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In the course of reaching the determinations and decisions and making the recommendation described above, the Board of Directors, in consultation with Achillion’s senior management, outside legal counsel and financial advisor, considered the risks and potentially negative factors relating to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the following material factors (which factors are not necessarily presented in order of relative importance):

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The Board of Directors believed that, overall, the potential benefits of the Merger to Achillion’s stockholders outweighed the risks and uncertainties of the Merger.

The foregoing discussion of factors considered by the Board of Directors contains the material factors considered by the Board of Directors, but is not in any way intended to be exhaustive. In light of the variety of factors considered in connection with its evaluation of the Merger, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Each member of the Board of Directors applied his or her own business judgment to the process and may have given different weight to different factors. The Board of Directors did not undertake to make any specific determination as to whether any factor or any particular aspect of a factor supported or did not support its ultimate determination. The Board of Directors based its recommendation on the totality of the information presented.

Opinion of Achillion’s Financial Advisor

On October 15, 2019, Centerview rendered to the Board of Directors its oral opinion, subsequently confirmed in a written opinion dated such date, that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Merger Consideration to be paid to the holders of shares of Achillion common stock (other than Excluded Shares) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders.

The full text of Centerview’s written opinion, dated October 15, 2019, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex C and is incorporated herein by reference. The summary of the written opinion of Centerview set forth below is qualified in its entirety to the full text of Centerview’s written opinion attached as Annex C. Centerview’s financial advisory services and opinion were provided for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction and Centerview’s opinion only addressed the fairness, from a financial point of view, as of the date thereof, to the holders of shares of Achillion common stock (other than Excluded Shares) of the Merger Consideration to be paid to such holders pursuant to the Merger Agreement. Centerview’s opinion did not address any other term or aspect of the Merger Agreement or the Transaction and does not constitute a recommendation to any stockholder of Achillion or any other person as to how such stockholder or other

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person should vote with respect to the Merger or otherwise act with respect to the Transaction or any other matter.

The full text of Centerview’s written opinion should be read carefully and in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:

Centerview also participated in discussions with members of the senior management and representatives of Achillion regarding their assessment of the Internal Data. In addition, Centerview reviewed publicly available financial and stock market data for Achillion and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also compared certain of the proposed financial terms of the Transaction with the financial terms, to the extent publicly available, of certain other transactions that Centerview deemed relevant, and conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.

Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with Achillion’s consent, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at Achillion’s direction, that the Internal Data (including, without limitation, the Management Projections) were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Achillion as to the matters covered thereby and Centerview relied, at Achillion’s direction, on the Internal Data for purposes of Centerview’s analysis and opinion. Centerview expressed no view or opinion as to the Internal Data or the assumptions on which it was based. In addition, at Achillion’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of Achillion, nor was Centerview furnished with any such evaluation or appraisal, and was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of Achillion. Centerview assumed, at Achillion’s direction, that the final executed Merger Agreement and CVR Agreement would not differ in any respect material to Centerview’s analysis or opinion from the Execution Copies reviewed by Centerview. Centerview also assumed, at Achillion’s direction, that the Transaction will be consummated on the terms set forth in the Merger Agreement and in accordance with all applicable laws and other relevant documents

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or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of Achillion, or the ability of Achillion to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.

Centerview’s opinion expressed no view as to, and did not address, Achillion’s underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to Achillion or in which Achillion might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview’s written opinion, to the holders of the shares of Achillion common stock (other than Excluded Shares) of the Merger Consideration to be paid to such holders pursuant to the Merger Agreement and the CVR Agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the Merger Agreement, the CVR Agreement or the Transaction, including, without limitation, the structure or form of the Transaction, the form or terms of the CVR with respect to transferability, illiquidity or otherwise, or any other agreements or arrangements contemplated by the Merger Agreement or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of the Transaction to, or any consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of Achillion or any other party. In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of Achillion or any party, or class of such persons in connection with the Transaction, whether relative to the Merger Consideration to be paid to the holders of the shares of Achillion common stock (other than Excluded Shares) pursuant to the Merger Agreement or otherwise. Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview’s opinion does not constitute a recommendation to any stockholder of Achillion or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with respect to the Transaction or any other matter. Centerview’s financial advisory services and its written opinion were provided for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction. The issuance of Centerview’s opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

Summary of Centerview’s Financial Analysis

The following is a summary of the material financial analyses prepared and reviewed with the Board of Directors in connection with Centerview’s opinion, dated October 15, 2019. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview’s view of the actual value of Achillion. Some of the summaries of the financial analyses set forth below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not

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constitute a complete description of the financial analyses performed by Centerview. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Centerview’s financial analyses and its opinion. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Achillion or any other parties to the Transaction. None of Achillion, Alexion, Merger Sub or Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of Achillion do not purport to be appraisals or reflect the prices at which Achillion may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before October 15, 2019 (the last trading day before the public announcement of the Transaction), and is not necessarily indicative of current market conditions. The implied per share equity value ranges described below were based on Achillion’s fully diluted shares outstanding calculated on a treasury stock method basis (taking into account outstanding in-the-money options) based on information provided by Achillion.

Analysis of Consideration

Centerview conducted an analysis of the Merger Consideration to be paid to the holders of shares of Achillion common stock (other than Excluded Shares) pursuant to the Merger Agreement and the CVR Agreement. Such consideration is equal, on a per share basis, to $6.30 upfront in cash together, and not separately, with one (1) CVR, which could result in an additional one-time payment of $1.00 in cash upon achievement of the clinical trial milestone and an additional one-time payment of $1.00 in cash upon achievement of the regulatory approval milestone, each as more fully described below in the section entitled “The Form of Contingent Value Rights Agreement,” beginning on page [●] of this proxy statement. For analytical purposes, assuming that CVR holders receive a $1.00 per CVR payment upon the achievement of the clinical trial milestone and a $1.00 per CVR payment upon the achievement of the regulatory approval milestone, based solely on the assessments of Achillion’s management as to the probability of success and the estimated timing of achievement of the milestones, and discounting the two probability-adjusted payments under the CVR back to the valuation date using the midpoint of a range of discount rates from 11% to 13% based on Centerview’s analysis of Achillion’s weighted average cost of capital, Centerview calculated an illustrative net present value for one (1) CVR of $1.14.

Solely for purposes of the financial analyses summarized below, the term “illustrative assumed per share merger consideration” refers to an aggregate assumed implied per share value of the merger consideration of $7.44 per share, equal, on a per share basis, to $6.30 upfront plus the estimated net present value of the CVR of $1.14 per CVR, based on the midpoint of the range of discount rates, as set forth above. However, there is no guarantee that the conditions triggering the CVR payment will be satisfied, and if triggered, when such conditions will be satisfied.

Selected Public Company Analysis

Centerview reviewed and compared certain financial information for Achillion to corresponding financial information for the following publicly traded biopharmaceutical companies that Centerview deemed comparable, based on its experience and professional judgment, to Achillion. Although none of the selected companies is directly comparable to Achillion, the companies listed below were chosen by Centerview, among other reasons, because they are publicly traded biopharmaceutical companies with certain operational, business and/or financial characteristics that, for purposes of Centerview’s analysis, may be considered similar to those of Achillion.

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However, because none of the selected companies is exactly the same as Achillion, Centerview believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public company analysis. Accordingly, Centerview also made qualitative judgments, based on its experience and professional judgment, concerning differences between the operational, business and/or financial characteristics of Achillion and the selected companies that could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative analysis.

Using publicly available information obtained from SEC filings and other data sources as of October 15, 2019, Centerview calculated, for each selected company, the company’s enterprise value (calculated as the equity value (determined using the treasury stock method and taking into account outstanding in-the-money options, warrants, restricted stock units and other convertible securities) plus the book value of debt and certain liabilities less cash and cash equivalents), which is referred to, with respect to the selected companies, as “Enterprise Value.”

The selected companies are summarized below (dollars in millions):

Based on its analysis and other considerations that Centerview deemed relevant in its professional judgment and experience, Centerview selected a reference range of Enterprise Values of $250 million to $450 million. In selecting this range of Enterprise Values, Centerview made qualitative judgments based on its experience and professional judgment concerning differences between the business, financial and operating characteristics of Achillion and the selected companies that could affect their public trading values in order to provide a context in which to consider the results of the quantitative analysis. Applying this range of Enterprise Value and adding to it Achillion’s estimated net cash of $190 million as of December 31, 2019, as set forth in the Internal Data, resulted in an implied per share equity value range for the shares of approximately $3.11 to $4.43. Centerview then compared this range to the illustrative assumed per share merger consideration.

Selected Precedent Transactions Analysis

Centerview reviewed and compared certain information relating to the following selected biopharmaceutical transactions that Centerview, based on its experience and professional judgment, deemed relevant to consider in relation to Achillion and the Transaction. These transactions were selected, among other reasons, because their participants, size or other factors, for purposes of Centerview’s analysis, may be considered similar to the Transaction. Centerview used its experience, expertise and knowledge of these industries to select transactions that involved companies with certain operational, business and/or financial characteristics that, for purposes of this analysis, may be considered similar to those of Achillion.

However, because none of the selected transactions used in this analysis is identical or directly comparable to the Transaction, Centerview believed that it was inappropriate to rely solely on the quantitative results of the selected transaction analysis. Accordingly, Centerview also made qualitative judgments, based on its experience and professional judgment, concerning differences between the operational, business and/or financial characteristics

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of Achillion and each target company as well as the Transaction and the selected transactions that could affect the transaction values of each in order to provide a context in which to consider the results of the quantitative analysis.

Using publicly available information obtained from SEC filings and other data sources as of October 15, 2019, Centerview calculated, for each selected transaction, the transaction value (calculated as the offer value (determined using the treasury stock method and taking into account outstanding in-the-money options, warrants, restricted stock units and other convertible securities), plus the book value of debt and certain liabilities less cash and cash equivalents) implied for each target company based on the consideration payable in the applicable selected transaction, in each case excluding any contingent payments, which is referred to, with respect to the selected transactions, as “Transaction Value.”

The selected transactions considered in this analysis are summarized below (dollars in millions):

Based on its analysis and other considerations that Centerview deemed relevant in its professional judgment and experience, Centerview selected a reference range of Transaction Values of $400 million to $925 million. In selecting this range of Transaction Values, Centerview made qualitative judgments based on its experience and professional judgment concerning differences between the business, financial and operating characteristics of Achillion and the target companies included in the selected transactions and other factors that could affect each transaction or other values in order to provide a context in which to consider the results of the quantitative analysis. Applying this range of Transaction Values and adding to it Achillion’s estimated net cash of $190 million as of December 31, 2019, as set forth in the Internal Data, resulted in an implied per share equity value range for the shares of approximately $4.10 to $7.54. Centerview then compared this range to the illustrative assumed per share merger consideration.

Discounted Cash Flow Analysis

Centerview performed a discounted cash flow analysis of Achillion based on the Management Projections, which reflect different assumptions and future financing needs of Achillion. For a detailed discussion of the Management Projections, please see the section entitled “The Merger — Certain Financial Projections,” beginning on page [●] of this proxy statement. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows and is obtained by discounting those future cash flows by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

In performing this analysis, Centerview calculated the estimated present value of the unlevered free cash flows of Achillion reflected in the Management Projections for the years from 2020 through 2038, based on a cash tax rate of 25% after utilization of federal net operating losses and credits (as set forth in the Management Projections), and an implied terminal value of Achillion, assuming that Achillion’s unlevered free cash flows would decline in perpetuity after December 31, 2038, at a rate of free cash flow decline year- over-year of 80.0%.

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The unlevered free cash flows were then discounted to present values using a range of discount rates from 11.0% to 13.0% using a mid-year convention. This range of discount rates was based on Centerview’s analysis of Achillion’s weighted average cost of capital. In performing its discounted cash flow analysis, Centerview adjusted for (i) net present value of tax savings from usage of federal net operating losses of $541 million as of December 31, 2018 plus $70 million in estimated 2019 losses, as set forth in the Management Projections, (ii) estimated net cash of $190 million as of December 31, 2019. See the section entitled “The Merger — Certain Financial Projections,” beginning on page [●] of this proxy statement. Centerview divided the results of each of the foregoing calculations by Achillion’s fully diluted shares outstanding (using the treasury stock method and taking into account outstanding in-the-money options) as of October 14, 2019 based on the Internal Data and adjusted for the cash to be received and shares to be issued in an assumed $150 million equity financing at a 10% discount to an illustrative 2020 price of $4.00 per share.

This analysis resulted in the implied per share equity value range for shares of Achillion’s common stock of $4.41 to $5.15.

Centerview then compared this range to the illustrative assumed per share merger consideration.

Other Factors

Centerview noted for the Board of Directors certain additional factors solely for informational purposes, including, among other things, the following:

General

The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.

Centerview’s financial analyses and opinion were only one of many factors taken into consideration by the Board of Directors in its evaluation of the Transaction. Consequently, the analyses described above should not be viewed as determinative of the views of the Board of Directors or Achillion management with respect to the

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Merger Consideration or as to whether the Board of Directors would have been willing to determine that a different consideration was fair. For a background of the negotiations related to the Transaction, please see the section entitled “The Merger — Background of the Merger,” beginning on page [●] of this proxy statement, including a description of the September 30 Proposal. The consideration for the Transaction was determined through arm’s-length negotiations between Achillion and Alexion and was approved by the Board of Directors. Centerview provided advice to Achillion during these negotiations. Centerview did not, however recommend any specific amount of consideration to Achillion or the Board of Directors or that any specific amount of consideration constituted the only appropriate consideration for the Transaction.

Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two (2) years prior to the date of its written opinion, except for Centerview’s current engagement, Centerview had not been engaged to provide financial advisory or other services to Achillion, and Centerview did not receive compensation from Achillion during such period. In the two (2) years prior to the date of its written opinion, Centerview was not engaged to provide financial advisory or other services to Alexion or Merger Sub, and Centerview did not receive compensation from Alexion or Merger Sub during such period. Centerview may provide financial advisory and other services to or with respect to Achillion or Alexion or their respective affiliates in the future, for which Centerview may receive compensation. Certain (i) of Centerview’s and its affiliates’ directors, officers, members and employees, or family members of such persons, (ii) of Centerview’s affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, Achillion, Alexion, or any of their respective affiliates, or any other party that may be involved in the Transaction.

The Board of Directors selected Centerview as its financial advisor in connection with the Transaction based on Centerview’s reputation and experience. Centerview is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Transaction.

In connection with Centerview’s services as the financial advisor to the Board of Directors, Achillion has agreed to pay Centerview an aggregate fee of $16.5 million, which is payable contingent upon consummation of the Transaction. In addition, Achillion has agreed to reimburse certain of Centerview’s expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of Centerview’s engagement.

Certain Financial Projections

Achillion, which does not yet have any marketed products, does not make public long-term projections as to future revenues, earnings or other results due to the uncertainty of the underlying assumptions and estimates. In its normal operating cadence, Achillion has traditionally provided forecast ranges for year and cash spend and cash balance. However, in connection with the Board of Director’s evaluation of the Merger and other strategic alternatives, Achillion management prepared certain long-range, risk-adjusted financial projections for the years 2020 through 2038 as a stand-alone company (the “Management Projections”).

The Management Projections were also provided to Centerview, Achillion’s financial advisor, and were relied upon by Centerview in connection with the rendering of Centerview’s fairness opinion to the Board of Directors and in performing the related financial analyses as described below under “— Opinion of Achillion’s Financial Advisor” and were the only financial projections with respect to Achillion used by Centerview in performing such financial analyses. The Management Projections were not provided to Alexion.

Achillion is electing to summarize the Management Projections in this proxy statement to provide holders of shares access to certain non-public, unaudited prospective financial information that was prepared for the Board of Directors for purposes of considering and evaluating Alexion’s proposal. Achillion makes and has made no representation to Alexion or Merger Sub in the Merger Agreement or otherwise, concerning any projected financial information.

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Cautionary Note About the Management Projections

The Management Projections, while necessarily presented with numerical specificity, were based on numerous variables and assumptions that were inherently uncertain and many of which were beyond Achillion’s control. The Management Projections reflect numerous estimates and assumptions made by Achillion’s management, based on information available at the time the Management Projections were developed, including with respect to industry performance and competition, regulatory conditions and general business, economic, market and financial conditions. In addition, the forecasts were based on certain internal assumptions about the probability of success and regulatory approval, launch timing, pricing, labeling, addressable markets, market growth, market share, competition, partnering, costs and other relevant factors relating to commercialization and profitability of Achillion’s product candidates, ACH-4471 (danicopan) and ACH-5228. In preparing the forecasts, Achillion management weighed the opportunity to enter previously undisclosed new indications beyond PNH and C3G against the operational complexity and capital formation required of clinical expansion and determined that the Company could manage expanding into one additional indication for ACH-4471 (danicopan) and one indication for ACH-5228. Achillion management selected an ophthalmology indication and a nephrology indication for ACH-4471 (danicopan) and ACH-5228, respectively. The probability of success attributed to all indications and partnerships in the forecasts are based on management assumptions, as well as typical success rates for programs based on similar stages of clinical development and other considerations.

Furthermore, Achillion made certain assumptions concerning future capital raises (including that it would be required to raise approximately $150 million in equity financing) and also determined that it would partner certain of its compounds on a territory and indication-specific basis. For valuation purposes, the upfront and milestone cash payments assumed from such partnerships are based on market norms for such transactions and are reflected as revenues in the period received. The U.S. generally accepted accounting principles (“GAAP”) accounting for such payments from third-parties would depend on the actual structure of the transaction which could include such payments being recognized as revenue over long periods of time.

As a result, there can be no assurance that the Management Projections accurately reflect future trends or accurately estimate the future market for Achillion’s product candidates. There can be no assurance of the approval, or timing of such approval, of Achillion’s product candidates, and it is possible that other therapeutic scenarios will be preferable. The Management Projections also reflect assumptions as to certain business decisions that are subject to change. Important factors that may affect actual results and result in the Management Projections not being achieved include, but are not limited to, the timing of regulatory approvals and introductions of new products, market acceptance of new products, success of clinical testing, availability of third-party reimbursement, impact of competitive products and pricing, the effect of regulatory actions, the effect of global economic conditions, the cost and effect of changes in tax and other legislations and other risk factors described in Achillion’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. In addition, the Management Projections may be affected by Achillion’s ability to achieve strategic goals, objectives and targets over the applicable periods. Further, the Management Projections cover multiple years and, by their nature, become subject to greater uncertainty with each successive year. Accordingly, there can be no assurance that the Management Projections will be realized, and actual results may vary materially from those shown.

In light of the foregoing factors and the uncertainties inherent in the Management Projections, stockholders are cautioned not to place undue, if any, reliance on the Management Projections. The Management Projections were not prepared with a view toward public disclosure. The inclusion of the Management Projections in this proxy statement should not be regarded as an indication that Achillion or any of its affiliates, advisors or representatives considered or consider the Management Projections to be predictive of actual future events, and the Management Projections should not be relied upon as such or construed as financial guidance. Neither Achillion nor any of its affiliates assumes any responsibility for the accuracy of this information. Neither Achillion nor any of its respective affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the Management Projections, and none of them

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undertakes any obligation to update or otherwise revise or reconcile the Management Projections to reflect circumstances existing after the date the Management Projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Management Projections are shown to be in error. Achillion does not intend to make publicly available any update or other revision to the Management Projections, except as otherwise required by law. Neither Achillion nor any of its respective affiliates, advisors, officers, directors or representatives has made or makes any representation or warranty to any holders of shares or other person regarding the ultimate performance of Achillion compared to the information contained in the Management Projections, the likelihood that the Management Projections will be achieved, the results of Achillion’s clinical trials, the effectiveness or marketability of Achillion’s product candidates or the overall future performance of Achillion. The Management Projections were prepared based on Achillion’s continued operation as a stand-alone company and do not take into account the effect of any business or strategic decision or action that has been or will be taken as a result of the execution of the Merger Agreement. The Management Projections are subjective in many respects and are thus subject to interpretation. Please refer to the section of this proxy statement captioned “Forward-Looking Statements,” beginning on page [●] of this proxy statement.

The Management Projections were not prepared with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts, or GAAP. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Achillion may not be comparable to similarly titled amounts used by other companies. In addition, the Management Projections were not prepared with the assistance of, or reviewed, compiled or examined by, independent accountants. The Management Projections are not being included in this proxy statement to influence any stockholder’s decision whether to vote in favor of the Merger, but instead are being included because the Management Projections were provided to the Board of Directors and to Centerview to evaluate the transactions contemplated by the Merger Agreement. The Management Projections may differ from publicly available analyst estimates, and the Management Projections do not take into account any events or circumstances after the date they were prepared, including the announcement of the Merger.

The following table provides a summary of the risk-adjusted Management Projections on a non-GAAP basis:

ACHILLION DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE MANAGEMENT PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE MANAGEMENT FORECASTS ARE NO LONGER APPROPRIATE.

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Interests of Achillion’s Directors and Executive Officers in the Merger

When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of stockholders generally, as more fully described below. The Board of Directors was aware of and considered these interests to the extent that they existed at the time, among other matters, in approving the Merger Agreement and the Merger and recommending that the Merger Agreement be adopted by stockholders.

Treatment of Equity-Based Awards

The Merger Agreement provides that Achillion’s Company Stock Options that are held by each director and each executive officer and that are outstanding immediately prior to the Effective Time will be subject to the following treatment at the Effective Time:

In the Money Options. Each In the Money Option that is (i) a Company Stock Option that is then outstanding, unexercised and vested (or which, pursuant to its terms or the terms of a contract in effect on October 15, 2019, shall become vested upon the consummation of the Merger), (ii) an unvested Company Stock Option held by an executive officer who has, at or prior to the Effective Time, delivered to Achillion and not revoked a non-competition agreement in the form attached to the Merger Agreement as Exhibit D, and (iii) a Company Stock Option that is then outstanding and unexercised, whether or not vested, that is held by a director, which, in each case, has a per share exercise price that is less than the Cash Merger Consideration, will be cancelled and converted into the right to receive both (i) a cash payment equal to (A) the excess of (x) the Cash Merger Consideration over (y) the exercise price payable per share under such In the Money Option, multiplied by (B) the total number of shares subject to such Company Stock Option immediately prior to the Effective Time (without regard to vesting) and (ii) one (1) CVR for each share subject to such In the Money Option immediately prior to the Effective Time (without regard to vesting).

Out of the Money Options. At the Effective Time, each Out of the Money Option that is (i) a Company Stock Option other than an In the Money Option that is then outstanding, unexercised and vested (or which, pursuant to its terms or the terms of a contract in effect on October 15, 2019, shall become vested upon the consummation of the Merger), (ii) an unvested Company Stock Option that is not an In the Money Option that is held by an executive officer who has, at or prior to the Effective Time, delivered to Achillion and not revoked a non-competition agreement, and (iii) a Company Stock Option other than an In the Money Option that is then outstanding and unexercised, whether or not vested, that is held by a director, will be cancelled and, except as described below, converted into the right to receive a cash payment, if any, from Alexion with respect to each share subject to the Out of the Money Option upon each Valuation Point which occurs after the Effective Time, equal to (i) the amount by which, as of the Valuation Point, the sum of the Per Share Value Paid exceeds the exercise price payable per share under such Out of the Money Option, less (ii) the amount of all payments previously received with respect to such Out of the Money Option. Any Out of the Money Options with an exercise price payable per share equal to or greater than $8.30 and any other Company Stock Options that are not vested as of the effective time and which do not vest pursuant to their respective terms or the terms of a contract in effect on October 15, 2019 that are held by an executive officer who has not, at or prior to the Effective Time, delivered to Achillion and not revoked a non-competition agreement will be cancelled at the Effective Time without any consideration payable therefor.

The following table sets forth, for each of our executive officers and the non-employee members of Achillion’s Board of Directors, (i) the number of vested and unvested In the Money Options held as of October 31, 2019, and (ii) the estimated cash consideration payable (on a pre-tax basis) in respect thereof, calculated by multiplying the excess of $6.30 over the exercise price of such In the Money Options by the total number of shares subject to such In the Money Options, assuming that the Effective Time occurs on October 31, 2019. Each share subject to an In the Money Option will also entitle the holder to receive one (1) CVR, with the total number of CVRs each

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individual is entitled to receive with respect to his or her Company Stock Options reflected in the table below. Each applicable Out of the Money Option will be eligible for a cash payment (deducting the applicable exercise price) as if the holder received one (1) notional (or “phantom”) CVR for each share subject to any applicable Out of the Money Option. For purposes of this table, the cash value that is assigned to each CVR is $2.00 (or a portion thereof in the case of CVR-related payments in respect of Out of the Money Options), which is the maximum (and only) amount payable under a CVR.

Potential Severance Payments Upon a Qualifying Termination Following the Effective Time

Achillion previously has entered into employment agreements with each of its executive officers. Each employment agreement provides that upon a termination by Achillion without “cause,” a termination due to non-renewal by Achillion or a resignation by the executive officer for “good reason” (each as defined in the applicable employment agreement) within twelve (12) months following a change in control, the executive officer will be entitled to receive:

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The Merger Agreement permits Achillion to amend the executive employment agreements so that severance may all be paid in a lump sum, instead of continued payment of base salary, to the extent permitted under Section 409A of the Code. The estimated value of severance payments and benefits for Messrs. Truitt, Firuta and Gibney and Dr. Zelenkofske is set forth below in the table entitled “Golden Parachute Compensation.” Based on the same assumptions set forth in the section below “Merger-Related Compensation” and applied in the table entitled “Golden Parachute Compensation,” Mr. Di Donato’s and Ms. Manning’s estimated cash severance payments would be $504,000 and $481,808, respectively, and the payment of COBRA premiums would be $7,690 and $20,899, respectively.

The closing of the Merger will constitute a change in control for purposes of the executive officers’ employment agreements. If the payments and benefits provided to the executive officer constitute “parachute payments” subject to the excise tax imposed by Section 4999 of the Code, then any such payments and benefits will be reduced to less than the amount that would incur such excise tax, if the net after-tax amount payable to the executive officer is 110% greater than the net after-tax amount payable without the reduction. Pursuant to the Merger Agreement, Achillion may implement tax reimbursements in respect of any excise and related taxes imposed on any employee, including any executive officer, under Section 4999 of the Code up to an aggregate limit of $1.5 million. The estimated value of the excise tax reimbursement payment for Messrs. Truitt, Firuta and Gibney and Dr. Zelenkofske is set forth in the section below “Merger-Related Compensation” and applied in the table entitled “Golden Parachute Compensation.” Based on the same assumptions set forth in the section below “Merger-Related Compensation” and applied in the table entitled “Golden Parachute Compensation,” the estimated excise tax reimbursement payment for Mr. Di Donato and Ms. Manning would be $300,711 and $0, respectively (for purposes of this calculation, Achillion has assigned an estimated value to Mr. Di Donato’s non-competition covenant). The actual amount of the excise tax reimbursement for each executive officer, if any, would not be determinable until after the consummation of the transaction.

2019 Annual Bonus

Achillion may pay annual bonuses to its executive officers and other eligible employees in respect of 2019 at the level determined by the Board of Directors. In the event that the Closing occurs prior to Achillion paying the 2019 annual bonuses during the first calendar quarter of 2020, Alexion will pay to each executive officer and other eligible employees a cash bonus in respect of 2019 in an amount equal to the cash bonus payable under the applicable Achillion annual cash incentive plan or program based on the greater of target or actual level of achievement of the applicable performance criteria.

As of the date of the filing of this proxy statement, the achievement of the applicable performance criteria in respect of the 2019 annual bonus has not yet been determined. The value of the 2019 annual bonus assuming target level of performance for Messrs. Truitt, Firuta and Gibney and Dr. Zelenkofske is set forth below in the table entitled “Golden Parachute Compensation.” Based on the same assumptions set forth in the section below “Merger-Related Compensation” and applied in the table entitled “Golden Parachute Compensation,” Mr. Di Donato’s and Ms. Manning’s 2019 annual bonus assuming target level of performance would be $144,000 and $124,913, respectively.

Merger-Related Compensation

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation that is based on or otherwise related to the Merger for each of our executive officers who are designated as “named executive officers” in the Definitive Proxy Statement filed on April 15, 2019. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section we use such term to describe the Merger-related compensation that will, or may be, payable to our named executive

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officers. The amounts set forth in the table below are based on multiple assumptions that may or may not actually prove correct, including assumptions described in this proxy statement and in the footnotes to the table below. As a result, the actual amounts, if any, to be received by a named executive officer in connection with the Merger may differ materially from the amounts set forth below.

The table below sets forth, for purposes of this golden parachute disclosure, the amount of payments and benefits that each of Achillion’s named executive officers would receive, assuming that (i) the Effective Time occurs on October 31, 2019 (which is the assumed date solely for purposes of this golden parachute compensation disclosure); (ii) each of Achillion’s named executive officers experiences a qualifying termination of employment (i.e., a termination of employment without “cause” or for “good reason” as such terms are defined in the applicable employment agreement) at the Effective Time; (iii) the unvested Stock Options outstanding as of October 31, 2019 will be cancelled in exchange for a cash payment equal to $6.30 per share (less the applicable Stock Option exercise price) and a corresponding CVR cash payment (or corresponding phantom CVR cash payment in respect of Out of the Money Options) equal to $2.00 (or a portion thereof in the case of CVR-related payments in respect of Out of the Money Options), which is the maximum amount payable under each CVR (or phantom CVR); (iv) no named executive officer receives any additional equity grants or other awards on or prior to the Effective Time; and (v) no named executive officer enters into any new agreement with Achillion or is otherwise legally entitled to, prior to the Effective Time, additional compensation or benefits. Each of the potential payments and benefits described below is also discussed with additional detail in the section entitled “The Merger — Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page [●] of this proxy statement. The amounts in respect of the “golden parachute” compensation set forth in the table below are subject to a non-binding advisory vote of Achillion’s shareholders, as described in the section of this proxy statement titled “Proposal 3 — Advisory, Non-Binding Vote on Merger-Related Executive Compensation Arrangements” beginning on page [●].

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Passive Ownership Interest in Alexion

One of the members of the Board of Directors may be deemed to hold a passive beneficial ownership interest in Alexion with an aggregate value of approximately $13,100 as of the date of entry into the Merger Agreement.

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Following identification and discussion, and prior to the entry into the Merger Agreement, the Board of Directors determined such beneficial ownership did not constitute a material conflict of interest with respect to the proposed transaction with Alexion.

Indemnification Arrangements

For six (6) years after the Effective Time, Alexion will, or will cause the Surviving Corporation to, maintain officers’ and directors’ liability insurance and fiduciary liability insurance in respect of acts or omissions occurring prior to the Effective Time covering each such person currently covered by Achillion’s officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on October 15, 2019, subject to limitations.

From and after the Effective Time through the sixth anniversary of the Effective Time, Alexion will cause the Surviving Corporation to fulfill and honor in all respects the obligations of Achillion pursuant to: (i) each indemnification agreement in effect between Achillion and any person who is now, or has been at any time prior to October 15, 2019, or who becomes prior to the Effective Time, a director or officer of Achillion; and (ii) any indemnification provision and any exculpation provision and advancement of expenses provision set forth in the certificate of incorporation or by-laws of Achillion as in effect on October 15, 2019.

Executive Officers Following the Merger

As of the date of this proxy statement, none of our executive officers has entered into any new agreement or arrangement with Alexion or any of its affiliates regarding employment with, or the right to purchase or participate in the equity of, Alexion or any of its affiliates. Prior to or following the Effective Time (but in any case following the time Alexion agreed upon the Per Share Merger Consideration), it is anticipated that certain of our executive officers may be identified by Alexion and thereafter engage in negotiations regarding compensation, benefits and the right to participate in the equity incentive programs of Alexion and may enter into definitive agreements with regarding employment or the right to participate in the equity incentive programs of Alexion or one or more of its affiliates on a going-forward basis following completion of the Merger. The Merger is not conditioned upon any Achillion executive officer agreeing to remain with the Surviving Corporation or any of its affiliates.

Financing of the Merger

The Merger is not conditioned upon the receipt of financing by Alexion. Alexion has represented to Achillion that it will have sufficient cash, available lines of credit or other sources of immediately available funds to enable Alexion to pay the aggregate Cash Merger Consideration and to perform its obligations with respect to the transactions contemplated by the Merger Agreement.

Closing and Effective Time

The closing of the transactions contemplated by the Merger Agreement will take place as soon as practicable (and, in any event, within two business days) after the satisfaction or waiver in accordance with the Merger Agreement of all of the conditions to closing of the transactions contemplated by the Merger Agreement (as described under the caption “The Merger Agreement — Conditions to the Closing of the Merger”), other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions.

Appraisal Rights

If the Merger is completed, stockholders who do not vote in favor of the adoption of the Merger Agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the Merger under Section 262.

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The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which is attached to this proxy statement as Annex D and incorporated herein by reference. The following summary does not constitute any legal or other advice and does not constitute a recommendation that stockholders exercise their appraisal rights under Section 262. Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A person having a beneficial interest in shares of common stock held of record in the name of another person, such as a bank, broker or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of our common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee.

Under Section 262, holders of shares of common stock who (i) do not vote in favor of the adoption of the Merger Agreement; (ii) continuously are the record holders of such shares through the Effective Time; and (iii) otherwise follow the procedures set forth in Section 262 will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court. Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest on an appraisal award will accrue and compound quarterly from the Effective Time through the date the judgment is paid at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period.

Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than twenty (20) days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement constitutes Achillion’s notice to stockholders that appraisal rights are available in connection with the Merger, and the full text of Section 262 is attached to this proxy statement as Annex D. In connection with the Merger, any holder of shares of common stock who wishes to exercise appraisal rights or who wishes to preserve such holder’s right to do so should review Annex D carefully. Failure to strictly comply with the requirements of Section 262 in a timely and proper manner will result in the loss of appraisal rights under the DGCL. A stockholder who loses his, her or its appraisal rights will be entitled to receive the Merger Consideration. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of common stock, Achillion believes that if a stockholder considers exercising such rights, that stockholder should seek the advice of legal counsel.

Stockholders wishing to exercise the right to seek an appraisal of their shares of common stock must do ALL of the following:

Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the Merger Agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the adoption of the Merger Agreement, abstain or not vote its shares.

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Filing Written Demand

Any holder of shares of common stock wishing to exercise appraisal rights must deliver to Achillion, before the vote on the adoption of the Merger Agreement at the Special Meeting at which the proposal to adopt the Merger Agreement will be submitted to the stockholders, a written demand for the appraisal of the stockholder’s shares, and that stockholder must not vote or submit a proxy in favor of the adoption of the Merger Agreement. A holder of shares of common stock exercising appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the Effective Time. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the Merger Agreement, and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption of the Merger Agreement or abstain from voting on the adoption of the Merger Agreement. Neither voting against the adoption of the Merger Agreement nor abstaining from voting or failing to vote on the proposal to adopt the Merger Agreement will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption of the Merger Agreement. A proxy or vote against the adoption of the Merger Agreement will not constitute a demand. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the Merger Agreement at the Special Meeting of Achillion’s stockholders will constitute a waiver of appraisal rights.

Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A demand for appraisal in respect of shares of common stock should be executed by or on behalf of the holder of record and must reasonably inform Achillion of the identity of the holder and state that the person intends thereby to demand appraisal of the holder’s shares in connection with the Merger. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners.

STOCKHOLDERS WHO HOLD THEIR SHARES IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS AND WHO WISH TO EXERCISE APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR BANK, BROKER OR OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKER OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKER OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.

All written demands for appraisal pursuant to Section 262 should be mailed or delivered to:

Achillion Pharmaceuticals, Inc.

Attention: Martha E. Manning, Esq., Corporate Secretary

1777 Sentry Parkway West, VEVA Building #14 Suite 200

Blue Bell, Pennsylvania 19422

Any holder of shares of common stock may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement by delivering to Achillion a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than sixty (60) days after

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the Effective Time will require written approval of the Surviving Corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just.

Notice by the Surviving Corporation

If the Merger is completed, within ten (10) days after the Effective Time, the Surviving Corporation will notify each holder of shares of common stock who has made a written demand for appraisal pursuant to Section 262 and who has not voted in favor of the adoption of the Merger Agreement that the Merger has become effective and the effective date thereof.

Filing a Petition for Appraisal

Within one hundred twenty (120) days after the Effective Time, but not thereafter, the Surviving Corporation or any holder of shares of common stock who has complied with Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the Surviving Corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. The Surviving Corporation is under no obligation, and has no present intention, to file a petition, and holders should not assume that the Surviving Corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of common stock. Accordingly, any holders of shares of common stock who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their shares of common stock within the time and in the manner prescribed in Section 262. The failure of a holder of common stock to file such a petition within the period specified in Section 262 could nullify the stockholder’s previous written demand for appraisal.

Within one hundred twenty (120) days after the Effective Time, any holder of shares of common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Surviving Corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and with respect to which Achillion has received demands for appraisal, and the aggregate number of holders of such shares. The Surviving Corporation must mail this statement to the requesting stockholder within ten (10) days after receipt of the written request for such a statement or within ten (10) days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition seeking appraisal or request from the Surviving Corporation the foregoing statements. As noted above, however, the demand for appraisal can only be made by a stockholder of record.

If a petition for an appraisal is duly filed by a holder of shares of common stock and a copy thereof is served upon the Surviving Corporation, the Surviving Corporation will then be obligated within twenty (20) days after such service to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss that stockholder from the proceedings.

Determination of Fair Value

After determining the holders of common stock entitled to appraisal, the Delaware Court of Chancery will appraise the “fair value” of the shares of common stock, exclusive of any element of value arising from the

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accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. Unless the court in its discretion determines otherwise for good cause shown, interest from the Effective Time through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the Effective Time and the date of payment of the judgment. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a Merger is not an opinion as to, and does not in any manner address, fair value under Section 262. Although Achillion believes that the Merger Consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Merger Consideration. Neither Achillion nor Alexion anticipates offering more than the Merger Consideration to any stockholder exercising appraisal rights, and each of Achillion and Alexion reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of common stock is less than the Merger Consideration. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to be appraised.

If any stockholder who demands appraisal of his, her or its shares of common stock under Section 262 fails to perfect, or loses or successfully withdraws, such holder’s right to appraisal, the stockholder’s shares of common stock will be deemed to have been converted at the Effective Time into the right to receive the Merger Consideration. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within one hundred twenty (120) days after the Effective Time or if the stockholder delivers to the Surviving Corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the Merger Consideration in accordance with Section 262.

From and after the Effective Time, no stockholder who has demanded appraisal rights will be entitled to vote such shares of common stock for any purpose or to receive payment of dividends or other distributions on the stock, except dividends or other distributions on the holder’s shares of common stock, if any, payable to stockholders as of a time prior to the Effective Time. If no petition for an appraisal is filed, or if the stockholder delivers to the Surviving Corporation a written withdrawal of the demand for an appraisal and an acceptance of

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the Merger, either within sixty (60) days after the Effective Time or thereafter with the written approval of the Surviving Corporation, then the right of such stockholder to an appraisal will cease. Once a petition for appraisal is filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder who commenced the proceeding or joined that proceeding as a named party without the approval of the court.

Failure to comply strictly with all of the procedures set forth in Section 262 may result in the loss of a stockholder’s statutory appraisal rights. Consequently, any stockholder wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.

Accounting Treatment

The Merger is anticipated to be accounted for as an acquisition of a business, pending final assessment upon closing of the Merger. Alexion anticipates it will record assets acquired and liabilities assumed from Achillion primarily at their respective fair values at the date of completion of the Merger. Any excess of the Merger Consideration is anticipated to be recorded to goodwill.

The financial condition and results of operations of Alexion after completion of the Merger will reflect Achillion’s balances and results after completion of the Merger but will not be restated retroactively to reflect the historical financial condition or results of operations at Achillion.

Certain U.S. Federal Income Tax Considerations of the Merger

The following discussion is a summary of certain U.S. federal income tax considerations relating to the Merger that are relevant to U.S. Holders and Non-U.S. Holders (each as defined below) of shares of common stock whose shares are exchanged for cash and CVRs pursuant to the Merger. This discussion is for general information only and is not tax advice. This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated under the Code, court decisions, published positions of the Internal Revenue Service (the “IRS”), and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect.

This discussion is limited to holders who hold their shares of common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not describe any of the tax considerations arising under the laws of any state, local or foreign tax jurisdiction and does not consider any aspects of U.S. federal tax law other than income taxation (e.g., estate or gift taxation) or the alternative minimum tax or the Medicare net investment income surtax that may be relevant or applicable to a particular holder in connection with the Merger and the receipt of, and payments with respect to, CVRs. For purposes of this discussion, a “holder” means either a U.S. Holder or a Non-U.S. Holder (each as defined below) or both, as the context may require.

This discussion does not address all of the tax considerations that may be relevant to holders in light of their particular circumstances. For example, this discussion does not address:

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If a partnership (including an entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of common stock, then the U.S. federal income tax considerations applicable to a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of common stock and partners therein should consult their tax advisors regarding the U.S. federal income tax considerations applicable to them relating to the Merger and the receipt of, and payments with respect to, CVRs.

No ruling has been or will be obtained from the IRS regarding the U.S. federal income tax considerations of the Merger described below. No assurance can be given that the IRS will agree with the views expressed in this discussion, or that a court will not sustain any challenge by the IRS in the event of litigation.

THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE TO ANY HOLDER. A HOLDER SHOULD CONSULT ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE MERGER AND THE RECEIPT OF, AND PAYMENTS WITH RESPECT TO, CVRS IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSIDERATIONS ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.

U.S. Holders

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of common stock that is for U.S. federal income tax purposes:

Receipt of Cash and CVRs

The receipt of cash and CVRs by a U.S. Holder in exchange for shares of common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. The amount of gain or loss a U.S. Holder

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recognizes, and the timing and potential character of a portion of such gain or loss, depends on the U.S. federal income tax treatment of the CVRs, with respect to which there is a significant amount of uncertainty. The installment method of reporting any gain attributable to the receipt of a CVR generally will not be available with respect to the disposition of shares of Achillion common stock of pursuant to the Merger because such shares are traded on an established securities market.

There is no legal authority directly addressing the U.S. federal income tax treatment of the receipt of the CVRs in connection with the Merger. The receipt of the CVRs as part of the Merger consideration might be treated as a “closed transaction” or as an “open transaction” for U.S. federal income tax purposes, each discussed below.

Pursuant to Treasury Regulations addressing contingent payment obligations analogous to the CVRs, if the fair market value of the CVRs is “reasonably ascertainable,” a U.S. Holder should treat the transaction as a “closed transaction” and treat the fair market value of the CVRs as part of the consideration received in the Merger for purposes of determining gain or loss. On the other hand, if the fair market value of the CVRs cannot be reasonably ascertained, a U.S. Holder should treat the transaction as an open transaction for purposes of determining gain or loss. These Treasury Regulations state that only in “rare and extraordinary” cases would the value of contingent payment obligations not be reasonably ascertainable. The following sections discuss the U.S. federal income tax considerations relating to the receipt of cash and CVRs in exchange for shares of common stock in the event it is treated as an open transaction and, alternatively, in the event it is treated as a closed transaction. There is no authority directly addressing whether contingent payment rights with characteristics similar to the rights under a CVR should be treated as “open transactions” or “closed transactions,” and such question is inherently factual in nature. Accordingly, U.S. Holders are urged to consult their own tax advisors regarding this issue. The CVRs also may be treated as debt instruments for U.S. federal income tax purposes. However, as such treatment is unlikely, the discussion below does not address the tax considerations relating to such a characterization. We urge you to consult your own tax advisor with respect to the proper characterization of the receipt of, and payments made with respect to, a CVR.

Treatment as Open Transaction

If the transaction is treated as an “open transaction” for U.S. federal income tax purposes, the fair market value of the CVRs would not be treated as additional consideration for shares of common stock at the time the CVRs are received in the Merger, and the U.S. Holder would have no tax basis in the CVRs. Instead, the U.S. Holder would take payments under the CVRs into account when made or deemed made in accordance with the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes. A portion of such payments would be treated as interest income under Section 483 of the Code (as discussed below) and the balance, in general, as additional consideration for the disposition of shares of common stock. Payments of cash pursuant to the Merger, plus the portion of payments on the CVRs not treated as imputed interest under Section 483 of the Code, will generally first be applied to reduce a U.S. Holder’s adjusted tax basis in the shares of common stock. A U.S. Holder will then recognize capital gain to the extent of any cash received pursuant to the Merger or the portion of CVR payments not so treated as imputed interest received after the U.S. Holder’s adjusted tax basis has been reduced to zero. A U.S. Holder will recognize capital loss to the extent of any remaining basis after the basis reduction described in the previous sentence, although it is possible that such holder may not be able to recognize such loss until the resolution of all contingencies under the CVRs or possibly until such holder’s abandonment of the holder’s CVRs. Gain or loss recognized in the transaction must be determined separately for each identifiable block of shares of common stock (i.e., shares of common stock acquired at the same cost in a single transaction). Any such capital gain or loss will be long-term if the shares of common stock were held for more than one year prior to such disposition. The deductibility of capital losses is subject to certain limitations.

A CVR payment may be treated as a payment under a contract for the sale or exchange of shares of common stock to which Section 483 of the Code applies if at least one payment is due more than one year after the consummation of the Merger. If Section 483 of the Code applies, a portion of any CVR payment that is due more than six months after the consummation of the Merger will be treated as interest and subject to U.S. federal

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income tax as ordinary income. The portion of any payment made with respect to a CVR treated as imputed interest under Section 483 of the Code will be determined at the time such payment is made and generally should equal the excess of (1) the amount of the CVR payment over (2) the present value of such amount as of the Effective Time, calculated using the applicable federal rate as the discount rate. The applicable federal rate is published monthly by the IRS. The relevant applicable federal rate will be the lower of the lowest applicable federal rate in effect during the three month period ending with the month that includes the date on which the Merger Agreement was signed or the lowest applicable federal rate in effect during the three month period ending with the month that includes the date of the consummation of the Merger. The maturity range of the relevant applicable federal rate will correspond to the period from the date of the consummation of the Merger to the date the amount is received or deemed received. A U.S. Holder must include in its taxable income interest imputed pursuant to Section 483 of the Code using such holder’s regular method of accounting for U.S. federal income tax purposes.

Treatment as Closed Transaction

If the receipt of the CVRs is treated as, or determined to be, part of a closed transaction for U.S. federal income tax purposes, then a U.S. Holder of shares of common stock generally would recognize capital gain or loss, if any, in the same manner as if the transaction were an open transaction, except that a U.S. Holder would take into account the “reasonably ascertainable” fair market value of the CVR determined on the date of the consummation of the Merger as an additional amount realized for purposes of calculating gain or loss with respect to the exchange of shares of common stock pursuant to the Merger. It is possible that the trading value of Achillion’s common stock would be considered along with other factors in determining whether the value of the CVR is reasonably ascertainable. A U.S. Holder’s initial tax basis in a CVR received in the Merger would equal the fair market value of such CVR as determined for U.S. federal income tax purposes. The holding period for a CVR would begin on the day following the date of the Effective Time. There is no authority directly addressing the U.S. federal income tax treatment of receiving payments on the CVRs and, therefore, the amount, timing and character of any gain, income or loss with respect to the CVRs would be uncertain. For example, payments with respect to the CVRs could be treated as payments with respect to a sale or exchange of a capital asset or as giving rise to ordinary income. In addition, it is unclear how a U.S. Holder of the CVRs would recover its adjusted tax basis with respect to payments thereon. It is also possible that, were a payment to be treated as being with respect to the sale of a capital asset, a portion of such payment would constitute imputed interest under Section 483 of the Code (as described above under “Treatment as Open Transaction”). Additionally, a U.S. Holder may recognize loss to the extent of any remaining basis after the expiration of any right to cash payments under such U.S. Holder’s CVR.

Non-U.S. Holders

For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of shares of common stock that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.

In general, any gain realized by a Non-U.S. Holder pursuant to the Merger generally will not be subject to U.S. federal income tax unless:

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Generally, if payments are made to a Non-U.S. Holder with respect to a CVR, such Non-U.S. Holder may be subject to withholding at a rate of 30% (or a lower rate under an applicable income tax treaty) of the portion of any such payments treated as interest income under Section 483 of the Code (as described above under “Treatment as Open Transaction”), unless such Non-U.S. Holder establishes its entitlement to exemption from or a lower rate of withholding under an applicable income tax treaty by providing the appropriate documentation (generally, IRS Form W-8BEN or W-8BEN-E) to the applicable withholding agents.

Non-U.S. Holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax considerations that may be relevant to them in light of their particular circumstances.

Foreign Account Tax Compliance Act (FATCA)

Withholding at a rate of 30% generally will be required in certain circumstances on interest (including payments treated as interest income under Section 483 of the Code) in respect of CVRs held by or through certain non-U.S. financial institutions (including investment funds), unless such institution (i) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold on certain payments or (ii) if required under an intergovernmental agreement between the U.S. and an applicable foreign country, reports such information to its local tax authority, which will exchange such information with the U.S. authorities. An intergovernmental agreement between the U.S. and an applicable foreign country may modify these requirements. Accordingly, the entity through which the CVR is held will affect the determination of whether such withholding is required. Similarly, in certain circumstances, interest (including payments treated as interest income under Section 483 of the Code) in respect of the CVRs held by a holder that is a non-financial non-U.S. entity that does not qualify under certain exemptions generally will be subject to withholding at a rate of 30%, unless such entity either (i) certifies to the payor that such entity does not have any “substantial United States owners” or (ii) provides certain information regarding the entity’s “substantial United States owners,” which the payor will then in turn be required to provide to the U.S. Department of the Treasury. Holders should consult their tax advisors regarding the possible implications of these rules on their receipt of, and payments with respect to, CVRs.

Information Reporting and Backup Withholding

Information reporting and backup withholding generally will apply to payments to a holder pursuant to the Merger, unless such holder is an entity that is exempt from information reporting and, when required, properly demonstrates its eligibility for exemption. In addition, payments with respect to a CVR may be subject to information reporting and backup withholding. Any payment to a U.S. Holder that is subject to information reporting generally will also be subject to backup withholding, currently at a rate of 24%, unless such U.S. Holder (i) provides the appropriate documentation (generally, IRS Form W-9) to the applicable withholding agent certifying that, among other things, its taxpayer identification number is correct, or otherwise establishes an exemption and (ii) with respect to payments on the CVRs, provides the rights agent with the certification documentation in clause (i) of this sentence or otherwise establishes an exemption from backup withholding.

The information reporting and backup withholding rules that apply to payments to a holder pursuant to the Merger generally will not apply to payments to a Non-U.S. Holder if such Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person (generally by providing an IRS Form W-8BEN or W-8BEN-E or other applicable IRS Form W-8) or otherwise establishes an exemption. Non-U.S. Holders should consult their own tax advisors to determine which IRS Form W-8 is appropriate.

Certain stockholders (including corporations) generally are not subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability if the required information is properly and timely furnished by such U.S. Holder to the IRS.

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Tax information provided to a U.S. Holder and the IRS on IRS Form 1099-B for the year of the Merger may reflect only the cash amounts paid to the U.S. Holder on the Merger and not the fair market value of the U.S. Holder’s interest in payments made (or to be made) on the CVRs. Accordingly, a U.S. Holder that treats the Merger as a “closed transaction” for U.S. federal income tax purposes may receive an IRS Form 1099-B reporting an amount received that is less than the amount such U.S. Holder will realize in the year of the Merger. In addition, any IRS Form 1099-B a U.S. Holder receives with respect to payments on the CVRs may reflect the entire amount of the CVR payments paid to the U.S. Holder (except imputed interest) and therefore may not take into account the fact that the U.S. Holder already included the value of the such payments in such U.S. Holder’s amount realized in the year of the Merger. As a result, U.S. Holders reporting under this method should not rely on the amounts reported to them on IRS Forms 1099-B with respect to the Merger. U.S. Holders are urged to consult their tax advisors regarding how to accurately report their income under this method.

THE FOREGOING SUMMARY DOES NOT PURPORT TO BE A COMPLETE DISCUSSION OF THE POTENTIAL TAX CONSIDERATIONS OF THE OFFER OR THE MERGER OR THE RECEIPT OF, AND PAYMENTS WITH RESPECT TO, CVRS. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS RELATING TO THE MERGER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES. NOTHING IN THIS SUMMARY IS INTENDED TO BE, OR SHOULD BE CONSTRUED AS, TAX ADVICE.

Regulatory Approvals Required for the Merger

Achillion and Alexion have agreed to use their reasonable best efforts to obtain all necessary regulatory approvals required to consummate the Merger and to fully carry out the purposes of the Merger Agreement. These approvals include the expiration or termination of the waiting period under the HSR Act.

HSR Act and U.S. Antitrust Matters

Under the HSR Act and the rules promulgated thereunder, the Merger cannot be completed until Achillion and Alexion file a notification and report form with the United States Federal Trade Commission (the “FTC”) and the Antitrust Division of the Department of Justice (the “DOJ”) under the HSR Act and the waiting period has expired or been terminated. A transaction notifiable under the HSR Act may not be completed until the expiration of the waiting period following the parties’ filing of their respective HSR Act notification forms (typically a thirty (30) day period) or the early termination of that waiting period. Achillion and Alexion have agreed to make the necessary filings with the FTC and the Antitrust Division of the DOJ on November 12, 2019.

Assuming the filings are made on November 12, 2019, the waiting period under the HSR Act is scheduled to expire at 11:59 p.m. (Eastern time in the United States) on December 12, 2019. However, before that time, the DOJ or the FTC can choose to shorten the waiting period by granting early termination or may extend the waiting period by requesting additional information or documentary material from the parties. If such request were made, the waiting period would be extended until 11:59 p.m. (Eastern time in the U.S.) on the 30th day after certification of substantial compliance by the parties with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act rules. The DOJ or the FTC may also request that the parties agree not to consummate the merger for some period of time after the expiration or termination of the relevant HSR Act waiting period.

At any time before or after consummation of the Merger, notwithstanding the termination of the waiting period under the HSR Act, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary under the applicable statutes, including seeking to enjoin the completion of the Merger, seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the Merger, and

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notwithstanding the termination of the waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary. Such action could include seeking to enjoin the completion of the Merger or seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

Other Regulatory Approvals

One or more governmental agencies may impose a condition, restriction, qualification, requirement or limitation when it grants the necessary approvals and consents. Third parties may also seek to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, any of which actions could significantly impede or even preclude obtaining required regulatory approvals. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained, and there may be a substantial period of time between the approval by stockholders and the completion of the Merger.

Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the Merger, including the requirement to divest assets, or require changes to the terms of the Merger Agreement. These conditions or changes could result in the conditions to the Merger not being satisfied.

THE MERGER AGREEMENT

Explanatory Note Regarding the Merger Agreement

The following summary describes the material provisions of the Merger Agreement. The descriptions of the Merger Agreement in this summary and elsewhere in this proxy statement are not complete and are qualified in their entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. We encourage you to read the Merger Agreement carefully and in its entirety because this summary may not contain all the information about the Merger Agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this proxy statement. Capitalized terms used in this section but not defined in this proxy statement have the meaning ascribed to them in the Merger Agreement.

The representations, warranties, covenants and agreements described below and included in the Merger Agreement (1) were made only for purposes of the Merger Agreement and as of specific dates; (2) were made solely for the benefit of the parties to the Merger Agreement; and (3) may be subject to important qualifications, limitations and supplemental information agreed to by Achillion, Alexion and Merger Sub in connection with negotiating the terms of the Merger Agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to reports and documents filed with the SEC and in some cases were qualified by confidential matters disclosed to Alexion and Merger Sub by Achillion in connection with the Merger Agreement. In addition, the representations and warranties may have been included in the Merger Agreement for the purpose of allocating contractual risk among Achillion, Alexion and Merger Sub rather than to establish matters as facts, and may be subject to standards of materiality applicable to such parties that differ from those applicable to investors. Stockholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of Achillion, Alexion or Merger Sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after October 15, 2019. In addition, you should not rely on the covenants in the Merger Agreement as actual limitations on the respective businesses of Achillion, Alexion and

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Merger Sub, because the parties may take certain actions that are either expressly permitted in the confidential disclosure letter to the Merger Agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The Merger Agreement is described below, and included as Annex A, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding Achillion, Alexion, Merger Sub or their respective businesses. Accordingly, the representations, warranties, covenants and other agreements in the Merger Agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding Achillion and our business.

Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws

The Merger Agreement provides that, at the Effective Time, (1) Merger Sub will be merged with and into Achillion in accordance with Delaware law, with Achillion continuing as a wholly owned subsidiary of Alexion; and (2) the separate corporate existence of Merger Sub will thereupon cease.

Effective as of, and immediately following, the Effective Time, the board of directors of the Surviving Corporation will consist of the directors of Merger Sub, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until the earlier of their death, resignation or removal or until their successors are duly elected and qualified, as the case may be. From and after the Effective Time, the officers of Merger Sub at the Effective Time will be the officers of the Surviving Corporation, until the earlier of their death, resignation or removal or until their successors have been duly elected or appointed and qualified, as the case may be. At the Effective Time, the certificate of incorporation of Achillion as the Surviving Corporation will be amended to be identical to the certificate set forth in Exhibit A to the Merger Agreement until changed or amended in accordance with applicable law and the applicable provisions of such certificate, and the bylaws of the Surviving Corporation, without any further action on the part of Achillion or Merger Sub, will be the bylaws of Merger Sub (except references to Merger Sub’s name will be replaced by references to “Achillion Pharmaceuticals, Inc.”).

Closing and Effective Time

The closing of the Merger will take place at 10:00 a.m., Boston time, as soon as practicable (and, in any event, within two (2) business days) after satisfaction or, to the extent permitted under the Merger Agreement, waiver of all conditions to the Merger (described below under the caption “Conditions to the Closing of the Merger”) (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions), unless the Merger Agreement has been terminated pursuant to its terms or unless another time or date is agreed to in writing by Alexion, Merger Sub and Achillion. As soon as practicable after the closing, Achillion will file with the Delaware Secretary of State a certificate of merger in connection with the Merger in such form as is required by, and executed and acknowledged in accordance with, Delaware law. The Merger will become effective on the date and time that the certificate of merger is filed with the Delaware Secretary of State (or at such later time as may be agreed by the parties that is specified in the certificate of merger).

Merger Consideration and Treatment of Equity Securities

Conversion of Shares

At the Effective Time, each share of Achillion common stock outstanding immediately prior to the Effective Time, other than shares held by Achillion as treasury stock, shares owned by Alexion or any subsidiary of Alexion and dissenting shares, will be converted into the right to receive (i) the Cash Merger Consideration and (ii) one (1) CVR, in each case, without interest thereon.

At the Effective Time, each share of Achillion common stock held by Achillion as treasury stock or owned by Alexion or Merger Sub immediately prior to the Effective Time will be canceled, and no payment will be made in exchange for such cancellation.

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At the Effective Time, shares of Achillion common stock held by any subsidiary of Alexion (other than Merger Sub) immediately prior to the Effective Time will be converted into an equal number of shares of common stock, par value $0.001 per share, of the Surviving Corporation so that each subsidiary owns the same percentage of the Surviving Corporation immediately following the Effective Time as it owned in Achillion immediately prior to the Effective Time.

At the Effective Time, each share of common stock of Merger Sub outstanding immediately prior to the Effective Time will be converted into and become one share of common stock, par value $0.001 per share, of the Surviving Corporation and (ii) each share of preferred stock of Merger Sub outstanding immediately prior to the Effective Time will be converted into and become one share of preferred stock, par value $0.001 per share, of the Surviving Corporation, in each case with the same rights, powers and privileges as the shares so converted and, together with the shares held by any subsidiary of Alexion other than Merger Sub, shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

Treatment of Equity Awards

The Merger Agreement provides that Achillion’s equity awards that are outstanding immediately prior to the Effective Time will be subject to the following treatment at the Effective Time:

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Achillion and Alexion have agreed that Achillion may grant equity awards after October 15, 2019 in the ordinary course of business consistent with past practice, subject to certain agreed upon limitations. All such awards granted after October 15, 2019 will be subject to the same treatment upon closing as applies to the corresponding type of equity awards as set forth in the Merger Agreement, provided, however, that such awards will not provide for accelerated vesting and payout upon the closing.

Treatment of ESPP

Achillion will take such action as may be necessary under the ESPP to terminate all offerings under the ESPP as of the last day of Achillion’s last payroll period ending at least ten (10) days prior to the Effective Time and the ESPP will terminate on or following such date.

Exchange and Payment Procedures

As of the Effective Time, Alexion will deposit with an exchange agent the aggregate Cash Merger Consideration to be paid in respect of the certificates representing shares of Achillion common stock and the uncertificated shares of Achillion common stock.

Promptly after the Effective Time, Alexion will send, or will cause the exchange agent to send, to each record holder of shares of Achillion common stock at the Effective Time a letter of transmittal which will specify that the delivery of Merger Consideration will be effected upon proper delivery of the certificates (or affidavits of loss in lieu thereof in accordance with the Merger Agreement or transfer of the uncertificated shares to the exchange agent) for use in such exchange.

Upon surrender of a certificate (or affidavit of loss in lieu thereof) to the exchange agent in accordance with the terms of such letter of transmittal, duly executed, the holder of such certificate will be entitled to receive in exchange therefor the Merger Consideration in respect of the Achillion common stock represented by such certificate, and the certificate so surrendered will be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of the certificates.

Each holder of record of one or more uncertificated shares whose shares were converted into the right to receive the Merger Consideration will, upon receipt by the exchange agent of an “agent’s message” in customary form (or such other evidence, if any, as the exchange agent may reasonably request), be entitled to receive, and Alexion will cause the exchange agent to pay and deliver, the Merger Consideration as promptly as reasonably practicable after the Effective Time.

Representations and Warranties

The Merger Agreement contains representations and warranties of Achillion, Alexion and Merger Sub.

Achillion

In the Merger Agreement, Achillion has made customary representations and warranties to Alexion and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

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Some of the representations and warranties in the Merger Agreement made by Achillion are qualified as to “materiality” or “Company Material Adverse Effect.” For purposes of the Merger Agreement, “Company

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Material Adverse Effect” means (A) any effect, change, event or occurrence that would or would reasonably be expected to be materially adverse to the business, financial condition or results of operations of Achillion, or (B) any effect, change, event or occurrence that would or would reasonably be expected to, individually or in the aggregate, materially impair, prevent or delay Achillion’s ability to consummate the Merger and the other transactions contemplated by the Merger Agreement in a timely manner on the terms set forth therein, excluding in the case of clause (A) above, any such material adverse effect resulting from or arising out of:

Alexion and Merger Sub

In the Merger Agreement, Alexion has made customary representations and warranties to Achillion that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

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Some of the representations and warranties in the Merger Agreement made by Alexion and Merger Sub are qualified as to a “Parent Material Adverse Effect.” For purposes of the Merger Agreement, “Parent Material Adverse Effect” means any effect, change, event or occurrence that would or would reasonably be expected to, individually or in the aggregate, materially impair, prevent or delay Alexion or Merger Sub’s ability to consummate the Merger and the other transactions contemplated by the Merger Agreement in a timely manner on the terms set forth therein.

Conduct of Business Pending the Merger

The Merger Agreement provides that from October 15, 2019 until the Effective Time, except for matters (i) expressly permitted or contemplated by the Merger Agreement or as set forth in the confidential disclosure schedule to the Merger Agreement, (ii) as required under any Achillion employee benefit plan, (iii) as required by applicable law or (iv) with the prior written consent of Alexion (which consent will not be unreasonably withheld, conditioned or delayed), Achillion will conduct its business in the ordinary course, consistent with past practice, and use its commercially reasonable efforts to (i) preserve intact its business organization and material assets, (ii) maintain in effect all of its material regulatory authorizations, (iii) keep available the services of its directors, officers and employees and (iv) maintain satisfactory relationships with customers, lenders, suppliers, licensors, licensees, distributors and others having business relationships with Achillion.

In addition, except for matters expressly permitted or contemplated by the Merger Agreement or as set forth in the confidential disclosure schedule or except as required by applicable law, Achillion will not do any of the following without the prior written consent of Alexion:

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