Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Dec. 31, 2010	Feb. 11, 2011	Jun. 30, 2010
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2010
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Entity Registrant Name	ALEXION PHARMACEUTICALS INC
Entity Central Index Key	0000899866
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		91,308,703
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 4,611,459,750

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Assets
Cash and cash equivalents	$ 267,145	$ 157,172
Marketable securities	94,460	19,048
Trade accounts receivable, net	168,732	113,731
Inventories	62,165	40,885
Prepaid manufacturing costs	7,500	5,762
Deferred tax assets	19,643	16,726
Prepaid expenses and other current assets	26,911	20,132
Total current assets	646,556	373,456
Property, plant and equipment, net	162,240	164,691
Intangible assets, net	24,146	28,589
Goodwill	19,954	19,954
Deferred tax assets	154,569	194,308
Other assets	4,572	5,403
Total assets	1,012,037	786,401
Liabilities and Stockholders' Equity
Accounts payable	16,026	11,530
Accrued expenses	107,030	66,915
Deferred revenue	2,896	1,652
Current portion of capital lease obligations	715	422
Other current liabilities	11,848	4,743
Total current liabilities	138,515	85,262
Capital lease obligations, less current portion	744	503
Convertible notes	3,718	9,918
Deferred tax liabilities		204
Other liabilities	9,324	2,158
Total liabilities	152,301	98,045
Commitments and contingencies (Note 10)
Stockholders' Equity:
Preferred stock, $.0001 par value; 5,000 shares authorized, no shares issued or outstanding
Common stock, $.0001 par value; 145,000 shares authorized; 91,591and 89,097 shares issued at December 31, 2010 and 2009, respectively	6	5
Additional paid-in capital	1,173,480	1,093,933
Treasury stock, at cost, 97 shares at December 31, 2010 and 2009	(2,676)	(2,676)
Accumulated other comprehensive loss	(7,140)	(1,942)
Accumulated deficit	(303,934)	(400,964)
Total stockholders' equity	859,736	688,356
Total liabilities and stockholders' equity	$ 1,012,037	$ 786,401

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Consolidated Balance Sheets (Parenthetical)
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	145,000	145,000
Common stock, shares issued	91,591	89,097
Treasury stock, shares	97	97

Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Revenues:
Net product sales	$ 540,957	$ 386,800	$ 259,004
Contract research revenues			95
Total revenues	540,957	386,800	259,099
Cost of sales	64,437	45,059	28,366
Operating expenses:
Research and development	98,394	81,915	62,581
Selling, general and administrative	227,488	172,767	133,543
Total operating expenses	325,882	254,682	196,124
Operating income	150,638	87,059	34,609
Other income and expense:
Investment income	1,511	786	2,810
Interest expense	(704)	(606)	(2,407)
Foreign currency loss	(2,434)	(530)	(282)
Debt exchange expense		(3,395)
Income before income taxes	149,011	83,314	34,730
Income tax provision (benefit)	51,981	(211,852)	1,581
Net income	$ 97,030	$ 295,166	$ 33,149
Earnings Per Common Share
Basic	$ 1.09	$ 3.46	$ 0.43
Diluted	$ 1.04	$ 3.26	$ 0.39
Shares used in computing earnings per common share
Basic	89,271	85,326	77,680
Diluted	93,037	90,582	89,967

Consolidated Statements of Changes in Stockholders' Equity and Comprehensive Income (Loss) (USD $) In Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Other Comprehensive Income (Loss) [Member]	Accumulated Deficit [Member]	Comprehensive Income [Member]
Balance, value at Dec. 31, 2007	$ 101,536	$ 4	$ 833,534	$ (1,260)	$ (1,443)	$ (729,279)	$ (93,556)
Balance, shares at Dec. 31, 2007		75,746		57
Foreign currency translation	(74)				(74)		(74)
Unrealized loss on pension obligation, net of tax	(471)				(471)		(471)
Unrealized gain (loss) on hedging activities, net of tax	(4,935)				4,935		4,935
Costs associated with 2 for 1 stock split	(99)		(99)
Conversion of convertible notes to common stock, value	52,185	1	52,184
Conversion of convertible notes to common stock, shares		3,356
Issuance of common stock from exercise of options, value	28,893		28,893
Issuance of common stock from exercise of options, shares		2,120
Issuance of restricted common stock, shares		310
Recognition of equity impact on R and D tax credit	404		404
Share-based compensation expense	26,523		26,523
Net income	33,149					33,149	33,149
Balance, value at Dec. 31, 2008	247,001	5	941,439	(1,260)	2,947	(696,130)	37,539
Balance, shares at Dec. 31, 2008		81,532		57
Foreign currency translation	415				415		415
Net change in unrealized gains on marketable securities, net of tax	22				22		22
Unrealized loss on pension obligation, net of tax	(416)				(416)		(416)
Unrealized gain (loss) on hedging activities, net of tax	(4,910)				(4,910)		(4,910)
Conversion of convertible notes to common stock, value	89,893		89,893
Conversion of convertible notes to common stock, shares		5,644
Issuance of common stock from exercise of options, value	29,317		30,733	(1,416)
Issuance of common stock from exercise of options, shares		1,564		40
Issuance of restricted common stock, shares		357
Excess tax benefit from stock options	764		764
Share-based compensation expense	31,104		31,104
Net income	295,166					295,166	295,166
Balance, value at Dec. 31, 2009	688,356	5	1,093,933	(2,676)	(1,942)	(400,964)	290,277
Balance, shares at Dec. 31, 2009		89,097		97
Foreign currency translation	(528)				(528)		(528)
Net change in unrealized gains on marketable securities, net of tax	(12)				(12)		(12)
Unrealized loss on pension obligation, net of tax	(1,898)				(1,898)		(1,898)
Unrealized gain (loss) on hedging activities, net of tax	(2,760)				(2,760)		(2,760)
Conversion of convertible notes to common stock, value	6,175		6,175
Conversion of convertible notes to common stock, shares		394
Issuance of common stock from exercise of options, value	37,546	1	37,545
Issuance of common stock from exercise of options, shares		1,646
Issuance of restricted common stock, shares		454
Excess tax benefit from stock options	1,970		1,970
Share-based compensation expense	33,857		33,857
Net income	97,030					97,030	97,030
Balance, value at Dec. 31, 2010	$ 859,736	$ 6	$ 1,173,480	$ (2,676)	$ (7,140)	$ (303,934)	$ 91,832
Balance, shares at Dec. 31, 2010		91,591		97

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Cash flows from operating activities:
Net income	$ 97,030	$ 295,166	$ 33,149
Adjustments to reconcile net income to net cash flows from operating activities:
Loss on disposal of property, plant and equipment	76	271	44
Depreciation and amortization	15,792	12,473	7,608
Share-based compensation expense	32,338	28,731	23,682
Deferred taxes	36,389	(208,726)
Marketable securities premium amortization	960
Non-cash debt exchange expense		3,395
Unrealized foreign currency (gain) loss	(523)	(997)	3
Unrealized loss (gain) on forward contracts	6,205	(2,233)	473
Changes in operating assets and liabilities:
Accounts receivable	(59,239)	(36,440)	(31,262)
Inventories	(14,119)	14,596	(15,700)
Prepaid expenses and other assets	(2,773)	(6,926)	951
Accounts payable and accrued expenses	47,455	14,131	32,912
Deferred revenue	1,315	400	1,339
Net cash provided by operating activities	160,906	113,841	53,199
Cash flows from investing activities:
Purchases of marketable securities	(129,860)	(19,026)
Proceeds from maturity or sale of marketable securities	53,387		9,368
Purchases of property, plant and equipment	(12,823)	(35,275)	(39,733)
Purchase of technology rights	(20)	(27,740)	(8,624)
(Increase) decrease in restricted cash	(2)	618	339
Net cash used in investing activities	(89,318)	(81,423)	(38,650)
Cash flows from financing activities:
Debt issuance costs		(50)	(312)
Payments on capital leases	(649)	(301)	(273)
Payments on mortgage loan		(44,000)
Excess tax benefit from stock options	1,970	764
Payment of taxes in exchange of treasury shares		(1,416)
Net proceeds from the exercise of stock options	37,546	30,733	28,893
Net cash provided by (used in) financing activities	38,867	(14,270)	28,308
Effect of exchange rate changes on cash	(482)	1,012	(166)
Net change in cash and cash equivalents	109,973	19,160	42,691
Cash and cash equivalents at beginning of period	157,172	138,012	95,321
Cash and cash equivalents at end of period	267,145	157,172	138,012
Supplemental disclosures
Cash paid for interest (net of amounts capitalized)	500	4,282	6,688
Cash paid for income taxes	$ 7,953	$ 4,268

Business Overview and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2010

Business Overview and Summary of Significant Accounting Policies

Business Overview and Summary of Significant Accounting Policies

1.	Business Overview and Summary of Significant Accounting Policies

Business

Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") is a biopharmaceutical company engaged in the discovery, development and commercialization of innovative therapeutic products aimed at treating patients with severe and life-threatening disease states, including those in the therapeutic areas of hematology, nephrology including transplant rejection, neurology, ophthalmology and cancer. Our marketed product Soliris^® (eculizumab) is the first and only therapy approved for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), an ultra-rare and life-threatening blood disorder. We were incorporated in 1992 and began commercial sale of Soliris in 2007.

Stock Split

In July 2008, the Company's Board of Directors approved a two-for-one stock split to be effected in the form of a 100 percent stock dividend. The additional shares were distributed on August 22, 2008 to stockholders of record as of the close of trading on August 12, 2008. All share and per share data presented in the accompanying consolidated financial statements and throughout these notes have been retroactively restated to reflect this stock split.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Alexion and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

We have reclassified certain balance sheet amounts for the prior period to conform to the current year presentation.

Dividend Policy

We have never paid a cash dividend on shares of our stock. We currently intend to retain our earnings to finance future operations and do not anticipate paying any cash dividends on our stock in the foreseeable future.

Critical Accounting Estimates

The preparation of our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We believe the most complex judgments result primarily from the need to make estimates about the effects of matters that are inherently uncertain and are significant to our consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We evaluate our estimates, judgments and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

The most significant areas involving estimates, judgments and assumptions used in the preparation of our consolidated financial statements are as follows:

•

Revenue recognition

•

Contingent liabilities

•

Inventories

•

Research and development expenses

•

Share-based compensation

•

Income taxes

Foreign Currency Translation

The financial statements of our subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders' equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive income (loss), net of tax, in stockholders' equity. Foreign currency transaction gains and losses are included in the results of operations in other income and expense.

Segment Reporting

We are managed and operated as one business. The entire business is managed by a single management team with reporting to the chief executive officer. We do not operate separate lines of business or separate business entities with respect to our products or product candidates. Accordingly, the Company does not prepare discrete financial information with respect to separate product areas or by location and only has one reportable segment.

Cash and Cash Equivalents

Cash and cash equivalents are stated at cost plus accrued interest, which approximates fair value, and include short-term highly liquid investments with original maturities of three months or less.

Fair Value of Financial Instruments

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other assets, accounts payable, accrued expenses and other liabilities approximate fair value due to their short-term maturities. Our derivative financial instruments are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks. Our marketable securities, all of which are available-for-sale, are valued based upon pricing of securities with similar investment characteristics and holdings. Our convertible notes and other debt obligations are carried at historical cost (see Notes 8 and 14 for fair value information).

Marketable Securities

We invest our excess cash balances in marketable securities of highly rated financial institutions and investment-grade debt instruments. We limit the amount of investment exposure as to institution, maturity and investment type. We classify our marketable securities as "available-for-sale" and, accordingly, record such securities at fair value.

Unrealized gains and losses that are deemed temporary, are included in accumulated other comprehensive income (loss) as a separate component of stockholders' equity. If any adjustment to fair value reflects a significant decline in the value of the security, we consider all available evidence to evaluate the extent to which the decline is "other than temporary" and would mark the security to market through a charge to our statement of operations. Credit losses are identified when we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security. In the event of a credit loss, only the amount associated with the credit loss is recognized in operating results, with the amount of loss relating to other factors recorded in accumulated other comprehensive income (loss).

Accounts Receivable

Our standard credit terms vary based on the country of sale and range from 30 to 120 days. Our average days' sales outstanding ranges from 80 to 100 days. We sell Soliris to a limited number of customers, and we evaluate the creditworthiness of each such customer on a regular basis. In certain European countries, sales by us are subject to payment terms that are statutorily determined. This is primarily the case in countries where the payor is government-owned or government-funded, which we consider to be creditworthy. The length of time from sale to receipt of payment in certain countries typically exceeds our credit terms. We make judgments as to our ability to collect outstanding receivables and provide allowances for the portion of receivables if and when collection becomes doubtful.

During the second quarter of 2010, the Greek government announced a plan for repayment of its debt to international pharmaceutical companies. This plan calls for the majority of pharmaceutical industry receivables from 2007 to 2009 to be settled in non-interest bearing bonds issued by the Greek government, with maturity dates ranging from 1 to 4 years.

In countries in which collections from customers extend beyond normal payment terms, we seek to collect interest. We record interest on customer receivables as interest income when collected.

For the year ended December 31, 2010, one individual customer accounted for 18% of the accounts receivable balance. For the year ended December 31, 2009, one individual customer accounted for 20% of the accounts receivable balance. For the year ended December 31, 2010, one individual customer accounted for 21% of net product sales. For the year ended December 31, 2009, one individual customer accounted for 20% of net product sales. No other customer accounted for more than 10% of net product sales or accounts receivable.

Inventories

Inventories are stated at the lower of cost or estimated realizable value. We determine the cost of inventory using the weighted-average cost method.

The components of inventory are as follows:


	December 31,
	2010		2009
Raw materials	$	4,835	$	2,678
Work-in-process		37,312		6,900
Finished goods		20,018		31,307

	$	62,165	$	40,885

Capitalization of Inventory Costs

We capitalize inventory produced for commercial sale, including costs incurred prior to regulatory approval but subsequent to the filing of a Biologics License Application (BLA) when the Company has determined that the inventory has probable future economic benefit. Inventory is not capitalized prior to completion of a phase III clinical trial. Raw materials and purchased drug product associated with clinical development programs are included in inventory. This inventory is charged to research and development expense when consumed. We also capitalize the cost of inventory manufactured at our manufacturing plant in property, plant and equipment prior to the approval of the facility by regulatory authorities.

Inventory Write-Offs

We analyze our inventory levels to identify inventory that may expire prior to sale, inventory that has a cost basis in excess of its estimated realizable value, or inventory in excess of expected sales requirements. Although the manufacturing of our product is subject to strict quality control, certain batches or units of product may, after a period of time, no longer meet quality specifications or may expire, at which point we would adjust our inventory values. Soliris currently has a maximum estimated life of 48 months and, based on our sales forecasts, we expect to realize the carrying value of the Soliris inventory.

Derivative Instruments

We record the fair value of derivative instruments as either assets or liabilities on the balance sheet. The accounting for gains and losses resulting from changes in fair value is dependent on the use of the derivative and whether it is designated and qualifies for hedge accounting.

All hedging activities are documented at the inception of the hedge and must meet the definition of highly effective in offsetting changes to future cash flows within the meaning of the authoritative guidance to be a qualifying hedge. The effectiveness of the qualifying hedge contract is assessed quarterly to ensure compliance with the authoritative guidance. We record the fair value of the qualifying hedges in other current assets, other assets, other current liabilities and other liabilities. Gains or losses resulting from changes in the fair value of qualifying hedges are recorded in other comprehensive income (loss) until the forecasted transaction occurs. When the forecasted transaction occurs, this amount is reclassified into revenue. Any non-qualifying portion of the gains or losses resulting from changes in fair value, if any, is reported in other income and expense.

Prepaid Manufacturing Costs

Cash advances paid by us prior to receipt of the inventory are recorded as prepaid manufacturing costs. The cash advances are subject to forfeiture if we terminate the scheduled production. We expect the carrying value of the prepaid manufacturing costs to be fully realized.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. We estimate economic lives as follows:

•

Building and improvements—five to thirty years

•

Machinery and laboratory equipment—three to fifteen years

•

Computer hardware and software—three to five years

•

Furniture and office equipment—three to five years

Leasehold improvements and assets under capital lease arrangements are amortized over the lesser of the estimated useful life or the term of the respective lease. Maintenance costs are expensed as incurred.

Construction-in-progress reflects amounts incurred for property, plant, or equipment construction or improvements that have not been placed in service.

Long-Lived Assets

We evaluate our long-lived assets, which are primarily comprised of intangible assets and property, plant and equipment, for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the assets group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not recognize any impairment loss for long-lived assets during the years ended December 31, 2010, 2009 and 2008.

Goodwill

Goodwill represents the difference between the purchase price of acquired businesses and the fair value of their identifiable tangible and intangible net assets and is not amortized. Goodwill is reviewed for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill might not be recoverable. No impairment charges have occurred as a result of our annual impairment assessments.

Revenue Recognition

Our principal source of revenue is product sales. We have applied the following principles in recognizing revenue:

We recognize revenue from product sales when persuasive evidence of an arrangement exists, title to product and associated risk of loss has passed to the customer, the price is fixed or determinable, collection from the customer is reasonably assured and we have no further performance obligations. Revenue is recorded upon receipt of the product by the end customer, which is typically a hospital, physician's office, private or government pharmacy or other health care facility. Amounts collected from customers and remitted to governmental authorities, such as value-added taxes (VAT) in foreign jurisdictions, are presented on a net basis in the Company's statements of operations and do not impact net product sales.

In the United States, our customers are primarily specialty distributors and specialty pharmacies which supply physician office clinics, hospital outpatient clinics, infusion clinics or home health care providers. We also sell Soliris to government agencies. Outside the United States, our customers are primarily hospitals, hospital buying groups, pharmacies, other health care providers and distributors.

In addition to sales in countries where Soliris is commercially available, we have also recorded revenue on sales for individual patients through named-patient programs. The relevant authorities or institutions in those countries have agreed to reimburse for product sold on a named-patient basis where Soliris has not received final approval for commercial sales.

Because of factors such as the pricing of Soliris, the limited number of patients, the short period from sale of product to patient infusion and the lack of contractual return rights, Soliris customers generally carry limited inventory. We monitor inventory within our distribution channel to determine whether deferral of sales is required. To date, actual refunds and returns have been negligible.

We record estimated rebates payable under governmental programs, including Medicaid in the United States and other programs outside the United States, as a reduction of revenue at the time of product sale. Our calculations related to these rebate accruals require an analysis of historical claim patterns and estimates of customer mix to determine which sales will be subject to rebates and the amount of such rebates. We update our estimates and assumptions each period and record any necessary adjustments, which may have an impact on revenue in the period in which the adjustment is made. Generally, the length of time between product sale and the processing and reporting of the rebates is three to six months.

In March 2010, United States government healthcare legislation, which contains several provisions that impact rebates payable, was enacted. The provisions in the legislation which relate to rebates payable include an increase in the minimum Medicaid rebate percentages, which is also extended as a discount to 340B institutions, and an extension of the Medicaid rebate to managed care organizations that dispense drugs to Medicaid recipients. We have recorded estimated rebates payable according to the new legislation. If the provisions of this legislation change, we may revise our estimates of rebates payable, which may have an impact on revenue in the period in which the adjustment is made.

We record distribution and other fees paid to our customers as a reduction of revenue. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.

We enter into foreign exchange forward contracts to hedge exposures resulting from portions of our forecasted intercompany revenues that are denominated in currencies other than the U.S. dollar. These hedges are designated as cash flow hedges upon inception. We record the effective portion of these cash flow hedges to revenue in the period in which the sale is made to an unrelated third party and the derivative contract is settled.

Research and Development Expenses

Research and development expenses are comprised of costs incurred in performing research and development activities including payroll and benefits, pre-clinical, clinical trial and related clinical manufacturing costs, manufacturing development and scale-up costs, product development and regulatory costs, contract services and other outside contractor costs, research license fees, depreciation and amortization of lab facilities, and lab supplies. These costs are expensed as incurred. We accrue costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by the vendors that perform the services.

Share-Based Compensation

We have one share-based compensation plan known as the 2004 Incentive Plan. Under this plan, restricted stock, restricted stock units, stock options and other stock-related awards may be granted to our directors, officers, employees and consultants or advisors of the Company or any subsidiary. To date, share-based compensation issued under the plan consists of incentive and non-qualified stock options, restricted stock and restricted stock units. Stock options are granted to employees at exercise prices equal to the fair market value of our stock at the dates of grant. Generally, stock options, restricted stock and restricted stock units granted to employees fully vest four years from the grant date. Stock options have a contractual term of 10 years. We recognize share-based compensation expense, based on the fair value of stock awards, on a straight-line basis over the requisite service period of the individual grants, which typically equals the vesting period.

Earnings Per Common Share

Basic earnings per common share (EPS) are computed by dividing net income by the weighted-average number of shares of common stock outstanding. For purposes of calculating diluted EPS, net income is adjusted for the after-tax amount of interest and deferred financing costs associated with our convertible debt, and the denominator reflects the potential dilution that could occur if stock options, unvested restricted stock or other contracts to issue common stock were exercised or converted into common stock, using the treasury stock method, as well as the potential dilution if the remaining convertible notes were converted to common stock.

The following table summarizes the calculation of basic and diluted EPS for years ended December 31, 2010, 2009 and 2008:


	December 31
	2010		2009		2008
Net income used for basic calculation	$	97,030	$	295,166	$	33,149

Weighted-average effect of dilutive securities:
Interest expense and debt financing cost amortization, net of tax, related to our 1.375% convertible senior notes		72		298		1,943

Net income used for diluted calculation	$	97,102	$	295,464	$	35,092

Shares used in computing earnings per common share—basic		89,271		85,326		77,680
Weighted-average effect of dilutive securities:
Shares issuable upon the assumed conversion of our 1.375% convertible senior notes		383		2,459		8,970
Stock awards		3,383		2,797		3,317

Dilutive potential common shares		3,766		5,256		12,287

Shares used in computing earnings per common share—diluted		93,037		90,582		89,967

Earnings per common share:
Basic	$	1.09	$	3.46	$	0.43
Diluted	$	1.04	$	3.26	$	0.39

The following table represents the potentially dilutive shares excluded from the calculation of EPS for the years ended December 31, 2010, 2009 and 2008 because their effect is anti-dilutive:


	December 31
	2010		2009		2008
Potentially dilutive securities:
Options to purchase common stock		1,234		2,240		1,439
Unvested restricted stock		3		7		20

		1,237		2,247		1,459

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. We provide a valuation allowance when it is more likely than not that deferred tax assets will not be realized. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), such as foreign currency translation adjustments, changes in pension liabilities, unrealized holding gains and losses on available for sale securities and unrealized gains and losses on hedge contracts. Certain of these changes in equity are reflected net of tax.

Marketable Securities

12 Months Ended

Dec. 31, 2010

Marketable Securities

Marketable Securities

2.	Marketable Securities

The following tables summarize our marketable securities at December 31, 2010 and 2009:


	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Other Than Temporary Impairments		Aggregate Fair Value
December 31, 2010
Commercial paper	$	65,244	$	44	$	(27	)	$	—	$	65,261
Corporate bonds		19,186		6		(8	)		—		19,184
Federal agency obligations		10,003		12		—			—		10,015

Total	$	94,433	$	62	$	(35	)	$	—	$	94,460


December 31, 2009
Corporate bonds	$	19,026	$	22	$	—		$	—	$	19,048

Total	$	19,026	$	22	$	—		$	—	$	19,048

No realized gains or losses were recorded for the year ended December 31, 2010 and 2009. We utilize the specific identification method in computing realized gains and losses.

Prepaid Expenses and Other Assets

12 Months Ended

Dec. 31, 2010

Prepaid Expenses and Other Assets

Prepaid Expenses and Other Assets

3.	Prepaid Expenses and Other Assets

Prepaid expenses and other current assets consist of the following:


	December 31, 2010		December 31, 2009
Prepaid taxes	$	7,411	$	7,682
Forward contract receivable		9,365		5,209
Other		10,135		7,241

	$	26,911	$	20,132


Other non-current assets consist of the following:
	December 31, 2010		December 31, 2009
Forward contract receivable	$	590	$	2,061
Leasehold deposits		2,403		1,913
Other		1,579		1,429

	$	4,572	$	5,403

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2010

Property, Plant and Equipment, Net

Property, Plant and Equipment, Net

4.	Property, Plant and Equipment, Net

A summary of property, plant and equipment is as follows:


Asset	December 31, 2010			December 31, 2009
Land	$	692		$	692
Buildings and improvements		133,430			132,675
Machinery and laboratory equipment		41,986			38,946
Computer hardware and software		20,012			13,245
Furniture and office equipment		5,340			4,216
Construction-in-progress		3,831			3,294

		205,291			193,068
Less: Accumulated depreciation and amortization		(43,051	)		(28,377	)

	$	162,240		$	164,691

Depreciation and amortization of property, plant and equipment was approximately $11,003, $7,566 and $5,688 for the year ended December 31, 2010, 2009 and 2008, respectively.

At December 31, 2010 and 2009, computer software costs included in property, plant and equipment, net, was $7,368 and $4,440, respectively. Depreciation and amortization expense for capitalized computer software costs was $2,883, $2,091 and $1,318 for the years ended December 31, 2010, 2009 and 2008, respectively.

In July 2006, we acquired a manufacturing plant in Smithfield, Rhode Island for the commercial production of Soliris and development and manufacturing of future products. Since this date, we have incurred costs related to the construction of the plant to support full-scale commercial manufacturing. We have also capitalized costs related to validation activities, including engineering runs and inventory production necessary to obtain approval of the facility from government regulators for the production of a commercially approved drug. In December 2009, we received final regulatory approval for production of commercial quantities of eculizumab by the European Commission. Accordingly, our plant was considered substantially complete and ready for its intended use. As a result of the approval, we placed the plant in service. Based on the approval, we expected to sell certain pre-approval inventory, and we therefore reclassified $4,514 from property, plant and equipment to inventory. In August 2010, the U.S. Food and Drug Administration (FDA) approved our Rhode Island manufacturing facility for the production of Soliris.

We capitalized interest of $3,427 and $4,717 in the years ended December 31, 2009 and 2008, respectively.

Intangible Assets, Net

12 Months Ended

Dec. 31, 2010

Intangible Assets, Net

Intangible Assets, Net

5.	Intangible Assets, Net

Intangible assets and goodwill, net of accumulated amortization, are as follows:


		December 31, 2010							December 31, 2009
	Estimated Life (months)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Licenses	28-96	$	25,531	$	(8,251	)	$	17,280	$	25,422	$	(4,895	)	$	20,527
Patents	90		10,517		(3,651	)		6,866		10,517		(2,455	)		8,062

Total		$	36,048	$	(11,902	)	$	24,146	$	35,939	$	(7,350	)	$	28,589

Goodwill	Indefinite	$	22,855	$	(2,901	)	$	19,954	$	22,855	$	(2,901	)	$	19,954

Amortization of our intangible assets was approximately $4,552, $4,663 and $1,176 for the years ended December 31, 2010, 2009 and 2008, respectively. Assuming no changes in the gross cost basis of intangible assets, the estimated amortization of intangible assets for the next five fiscal years is as follows:


Year
2011	$	4,711
2012		5,696
2013		7,148
2014		6,583
2015		42

In December 2008, we entered into a definitive license agreement with PDL BioPharma, Inc. on a patent portfolio relating to the humanization of antibodies for $25,000. No additional payments will be owed by Alexion to PDL for these patents in respect of Soliris sales for any indication. As a result of the settlement, we recorded an intangible asset which will be amortized in proportion to product sales through November 2014, which represents the expiration of the PDL patents. Based on the settlement and evaluation of other potential royalties, we recorded a reduction in cost of goods sold of approximately $1,800 during the fourth quarter of 2008 related to an adjustment of estimated accrued royalties on sales of Soliris prior to the fourth quarter.

Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2010

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

6.	Derivative Instruments and Hedging Activities

We operate internationally and, in the normal course of business, are exposed to fluctuations in foreign currency exchange rates. The exposures result from portions of our revenues, as well as the related receivables, and expenses that are denominated in currencies other than the U.S. dollar, primarily the Euro, Japanese Yen, Swiss Franc and British Pound. We manage our foreign currency transaction risk within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.

We enter into foreign exchange forward contracts, with durations of up to 36 months, to hedge exposures resulting from portions of our forecasted intercompany revenues that are denominated in currencies other than the U.S. dollar. The purpose of the hedges of intercompany revenue is to reduce the volatility of exchange rate fluctuations on our operating results and to increase the visibility of the foreign exchange impact on forecasted revenues. These hedges are designated as cash flow hedges upon contract inception. At December 31, 2010, we have open contracts with notional amounts totaling $330,019 that qualified for hedge accounting.

The impact on other comprehensive income (OCI) and earnings from foreign exchange contracts that qualified as cash flow hedges, for the years ended December 31, 2010 and 2009 are as follows:


	December 31,
	2010			2009
Loss recognized in OCI, net of tax	$	(2,760	)	$	(4,910	)
Gain reclassified from OCI to net product sales (Effective portion)	$	8,778		$	3,363
Gain (loss) reclassified from OCI to other income and expense (Ineffective portion)	$	668		$	(258	)

Assuming no change in foreign exchange rates from market rates at December 31, 2010, $55 of a gain recognized in other comprehensive income is expected to be reclassified to revenue over the next twelve months.

We enter into foreign exchange forward contracts, with durations of approximately 30 days, designed to limit the balance sheet exposure of monetary assets and liabilities of our foreign subsidiaries. We enter into these hedges to reduce the impact of fluctuating exchange rates on our operating results. These derivative instruments do not qualify for hedge accounting under the guidance; however, gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of December 31, 2010, the notional settlement amount of foreign exchange contracts relating to monetary assets and liabilities was $115.457.

We recognized a gain (loss) of $9,443 and $(3,820), in other income and expense, for the years ended December 31, 2010 and 2009, respectively, associated with the foreign exchange contracts not designated as hedging instruments under the guidance. These amounts were largely offset by gains or losses in monetary assets and liabilities.

The following table summarizes the Company's fair value of outstanding derivatives at December 31, 2010:

Asset Derivatives

Liability Derivatives

Balance Sheet

Fair

Balance Sheet

Fair

Location

Value

Location

Value

Derivatives designated as hedging instruments:

Foreign exchange forward contracts

Other current assets

8,015

Other current liabilities

7,124

Foreign exchange forward contracts

Other non-current assets

590

Other non-current liabilities

3,380

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts

Other current assets

1,350

Other current liabilities

4,724

Total fair value of derivative instruments

9,955

15,228

Accrued Expenses

12 Months Ended

Dec. 31, 2010

Accrued Expenses

Accrued Expenses

7.	Accrued Expenses

Accrued expenses consist of the following:


	December 31, 2010		December 31, 2009
Royalties	$	50,133	$	29,177
Payroll and employee benefits		24,034		17,251
Taxes payable		9,580		5,947
Rebates payable		4,660		4,068
Other		18,623		10,472

	$	107,030	$	66,915

See Note 10 for additional information on accrued royalties.

Debt

12 Months Ended

Dec. 31, 2010

Debt

Debt

Debt

Convertible Notes

In January 2005 we sold $150,000 principal amount of 1.375% Convertible Senior Notes due February 1, 2012 (the "1.375% Notes"). The interest rate on the notes is 1.375% per annum on the principal amount from January 25, 2005, payable semi-annually in arrears in cash on February 1 and August 1 of each year, beginning August 1, 2005. The 1.375% Notes are convertible into our common stock at an initial conversion rate of 63.5828 shares of common stock (equivalent to a conversion price of approximately $15.73 per share) per $1 principal amount of the 1.375% Notes, subject to adjustment, at any time prior to the close of business on the final maturity date of the notes. We do not have the right to redeem any of the 1.375% Notes prior to maturity. The convertible notes payable do not contain covenants related to our financial performance.

In the second quarter of 2009, certain holders of the 1.375% Notes exercised conversion rights with respect to an aggregate principal amount of $87,304 resulting in the issuance of 5,644 shares of our common stock. In the second quarter of 2009, we recorded a non-cash expense of $3,395 for the fair value of the additional shares over the stated conversion rate. We reclassified $1,105 of deferred financing costs to equity in 2009 as a result of the exchange and had a remaining balance of $272 at December 31, 2009.

In the first quarter of 2010, certain holders of the 1.375% Notes exercised conversion rights with respect to an aggregate principal amount of $1,000 resulting in the issuance of 63,582 shares of our common stock. In the second quarter of 2010, certain holders of the 1.375% Notes exercised conversion rights with respect to an aggregate principal amount of $5,200 resulting in the issuance of 330,629 shares of our common stock. At December 31, 2010, $3,718 of the convertible notes remains outstanding, and the fair value, based on quoted market prices, was estimated at $18,892.

Amortization expense associated with deferred financing costs for the year ended December 31, 2010, 2009 and 2008 was approximately $239, $260 and $733, respectively.

Revolving Credit Facility

In January 2010, we entered into an amended and restated credit agreement, the Amended Credit Agreement, that provides for an available $50,000 revolving credit facility through January 22, 2013, with up to a $20,000 sublimit for letters of credit that can be used for working capital requirements and other general corporate purposes. With the consent of the lenders and the administrative agent and subject to satisfaction of certain conditions, we may increase the facility to $75,000. The loan is collateralized by substantially all of Alexion Pharmaceuticals, Inc.'s assets, including the pledge of the equity interests of certain direct subsidiaries and Rhode Island facility, but excluding intellectual property and assets of foreign subsidiaries.

We may elect that the loans under the agreement bear interest at a rate per annum equal to (i) LIBOR plus 2.50% to 3.00% depending on the ratio of our cash to liabilities (as calculated in accordance with the agreement), or (ii) a Base Rate equal to the higher of the (A) Prime Rate then in effect, (B) Federal Funds Rate then in effect plus 0.50%, and (C) Eurodollar Rate then in effect plus 1.00%, plus 0.50% to 1.00% depending on the ratio of our cash to liabilities (as calculated in accordance with the agreement). Interest is payable quarterly for Base Rate loans and, in the case of LIBOR-based loans, at the end of the applicable interest period, with the principal due on January 22, 2013, the maturity date.

The Amended Credit Agreement requires us to comply with certain financial covenants on a quarterly basis. Further, the agreement includes negative covenants, subject to exceptions, restricting or limiting our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, grant liens, engage in certain investment, acquisition and disposition transactions, and enter into transactions with affiliates. The agreement also contains customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the interest rate would increase and the administrative agent would be entitled to take various actions, including the acceleration of amounts due under the loan.

As of December 31, 2010, we had no outstanding amounts under the revolving credit facility. We had open letters of credit of $6,647 at December 31, 2010.

Capital Leases

12 Months Ended

Dec. 31, 2010

Capital Leases

Capital Leases

9.	Capital Leases

We lease office equipment and software licenses under capital lease agreements expiring in 2013. The assets and liabilities under capital leases are recorded at the lesser of the present value of the minimum lease payments or the fair value of the asset. The assets are amortized over the lower of their related lease terms or their estimated useful lives. Amortization of assets under capital lease is included in depreciation expense. As of December 31, 2010, the cost of equipment under capital lease is $2,642 and accumulated amortization is $958. The weighted-average interest rate on the capital leases is approximately 4.02%.

Minimum future lease payments under capital lease as of December 31, 2010 are:


Year
2011	$	793
2012		627
2013		181

		1,601
Less: Amount representing interest		142

Present value of minimum lease payments	$	1,459

Commitments and Contingencies

12 Months Ended

Dec. 31, 2010

Commitments and Contingencies

Commitments and Contingencies

10.

Commitments and Contingencies

Contingent liabilities

We are currently involved in various claims and legal proceedings. On a quarterly basis, we review the status of each significant matter and assess its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals are based on our best estimates based on available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, we may reassess the potential liability related to these matters and may revise these estimates, which could result in a material adverse adjustment to our operating results.

On January 26, 2011, Novartis filed a civil action against Alexion Pharmaceuticals, Inc. and other biopharmaceuticals companies in the U.S. District Court for the District of Delaware. Novartis claims willful infringement by Alexion of U.S. Patent No. 5,688,688. Novartis seeks, among other things, monetary damages. If it is finally determined that we infringe the Novartis patent, we may be required to pay royalties to Novartis on sales of Soliris regarding certain manufacturing technology. Although we do not believe that the manufacture of Soliris infringes a valid patent claim owned by Novartis, we cannot guarantee that we will be successful in defending against such action. Given the early stages of this litigation, Management does not believe a loss related to this matter is probable and the potential magnitude of such loss, if any, can be reasonably estimated.

In addition to Novartis's claim, other third parties may claim that the manufacture, use or sale of Soliris or other drugs under development infringes patents owned or granted to such third parties. We are aware of broad patents owned by others relating to the manufacture, use and sale of recombinant humanized antibodies, recombinant human antibodies, and recombinant human single chain antibodies. Soliris and many of our product candidates are genetically engineered antibodies, including recombinant humanized antibodies, recombinant human antibodies, or recombinant human single chain antibodies. In addition to the action described above, we have received notices from the owners of some of these patents claiming that their patents may be infringed by the development, manufacture or sale of Soliris or some of our drug candidates. We are also aware of other patents owned by third parties that might be claimed by such third parties to be infringed by the development and commercialization of Soliris and some of our drug candidates. In respect to some of these patents, we have obtained licenses, or expect to obtain licenses. We estimate our obligations for probable contingent liabilities based on our assessment of estimated royalties potentially owed to other third parties. A costly license, or inability to obtain a necessary license, could have a material adverse effect on our business. However the amount of such loss, if any, beyond amounts currently accrued cannot be reasonably estimated.

At December 31, 2010, we have recorded $50,133 of accrued royalties, which includes amounts related to our existing royalty agreements and amounts recorded for contingent liabilities described above. Our cost of sales for the years ended December 31, 2010, 2009 and 2008 also includes amounts recorded for existing royalty agreements and contingent liabilities.

Operating Leases

As of December 31, 2010, we lease our headquarters and primary research and development facilities in Cheshire, Connecticut. The lease is set to expire in May 2017. Monthly fixed rent started at approximately $162, increasing to approximately $193 over the term of this lease. We also lease space for our regional executive and sales offices in Lausanne, Switzerland, as well as in certain other countries to facilitate our operations as a global organization.

Aggregate lease expense for our facilities was $6,980, $6,817 and $4,728 for the years ended December 31, 2010, 2009 and 2008, respectively. Lease expense is being recorded on a straight-line basis over the applicable lease terms.

Aggregate future minimum annual rental payments for the next five years and thereafter under non-cancellable operating leases (including facilities and equipment) as of December 31, 2010 are:


Year
2011	$	10,274
2012		8,718
2013		6,548
2014		5,681
2015		3,117
Thereafter		4,160

License and Research and Development Agreements

We have entered into a number of license, research and development and manufacturing development agreements since our inception. These agreements have been made with various research institutions, universities, contractors, collaborators, and government agencies in order to advance and obtain technologies and services related to our business.

License agreements generally provide for us to pay an initial fee followed by annual minimum royalty payments. Additionally, certain agreements call for future payments upon the attainment of agreed upon milestones, such as, but not limited to, Investigational New Drug (IND) application or approval of Biologics License Application. These agreements require minimum royalty payments based on sales of products developed from the applicable technologies, if any.

Clinical and manufacturing development agreements generally provide for us to fund manufacturing development and on-going clinical trials. Clinical trial and development agreements include contract services and outside contractor services including contracted clinical site services related to patient enrolment for our clinical trials. Manufacturing development agreements include clinical manufacturing and manufacturing development and scale-up. We have executed a large-scale product supply agreement with Lonza Sales AG for the long-term commercial manufacture of Soliris.

In order to maintain our rights under these agreements, we may be required to provide a minimum level of funding or support. Accordingly, we recognize the expense and related obligation related to these arrangements over the period of performance.

The minimum fixed payments (assuming non-termination of the above agreements) as of December 31, 2010, for each of the next five years are as follows:


Years Ending December 31,	License Agreements		Clinical and Manufacturing Development Agreements
2011	$	315	$	7,800
2012		315		3,900
2013		315		7,800
2014		315		3,900
2015		310		3,900

	$	1,570	$	27,300

Product Supply

The Large-Scale Product Supply Agreement dated December 18, 2002 (Lonza Agreement) between Lonza Sales AG (Lonza) and us, relating to the manufacture of Soliris, was amended in June 2007. We amended our supply agreement to provide for additional purchase commitments of Soliris from 2009 through 2013. This amendment has remaining commitments of $39,000 as of December 31, 2010. Such commitments may only be cancelled in limited circumstances.

Income Taxes

12 Months Ended

Dec. 31, 2010

Income Taxes

Income Taxes

11.

Income Taxes

The income tax provision (benefit) is based on income before income taxes as follows:


	2010		2009			2008
U.S.	$	108,226	$	86,803		$	23,756
Non-U.S.		40,785		(3,489	)		10,974

	$	149,011	$	83,314		$	34,730

The components of the income tax provision (benefit) are as follows:


	2010			2009			2008
Income Tax Provision (Benefit)
Domestic
Current	$	5,013		$	(7,742	)	$	2,514
Deferred		40,569			(207,604	)		(2,633	)

		45,582			(215,346	)		(119	)
Foreign
Current		9,728			4,601			1,902
Deferred		(3,329	)		(1,107	)		(202	)

		6,399			3,494			1,700
Total
Current		14,741			(3,141	)		4,416
Deferred		37,240			(208,711	)		(2,835	)

	$	51,981		$	(211,852	)	$	1,581

We reversed the valuation allowance against certain non-U.S. deferred tax assets in the second quarter of 2010 where realization of those assets was more likely than not. In the fourth quarter of 2009, we also reversed the valuation allowance recorded against a substantial portion of our deferred tax assets in the United States. We continue to maintain a valuation allowance against certain other deferred tax assets where the realization is not certain. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of these deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized.

Due to the amount of our NOL's and credit carryforwards, we do not anticipate paying substantial U.S. federal income taxes in the foreseeable future. We do expect to pay cash taxes in various U.S. states and foreign jurisdictions where we have operations and have utilized all of our net operating losses. We were subject to the alternative minimum tax during 2010 and expect that we will continue to be subject to cash payments for the alternative minimum tax in the near term. The payment of an alternative minimum tax amount generates a credit that may be carried forward indefinitely and used to offset our regular income tax liability.

At December 31, 2010, we have federal and state net operating loss carryforwards of $579,308 and $86,138, respectively. Included in the NOL's are federal and state NOL's of $225,574 and $49,644, respectively, attributable to excess tax benefits from the exercise of non-qualified stock options. The tax benefits attributable to these NOL's will be credited directly to additional paid in capital when utilized to offset taxes payable. Our NOL's expire between 2011 and 2029. We also have federal and state income tax credit carryforwards of approximately $37,913 and $4,199, respectively. These income tax credits expire between 2011 and 2030. Additionally, included in these income tax credit carryforwards are federal income tax credit carryforwards of $5,350 attributable to excess tax benefits from the exercise of non-qualified stock options.

Certain stock option exercises resulted in tax deductions in excess of previously recorded benefits based on the option value at the time of grant. Although these additional tax benefits or "windfalls" are reflected in net operating loss carryforwards, pursuant to authoritative guidance, the additional tax benefit associated with the windfall is not recognized until the deduction reduces regular taxes payable. Accordingly, since the tax benefit does not reduce our current taxes payable due to net operating loss carryforwards, these "windfall" tax benefits are not reflected in our net operating losses and credit carryforward in deferred tax assets for all periods presented.

At December 31, 2009, we had federal and state net operating loss carryforwards of $665,740 and $117,778, respectively. Included in the NOL's were federal and state NOL's of $174,545 and $72,070, respectively, attributable to excess tax benefits from the exercise of non-qualified stock options. The tax benefits attributable to these NOL's will be credited directly to additional paid in capital when utilized to offset taxes payable. We also had federal and state income tax credit carryforwards of approximately $34,208 and $7,689 respectively. Additionally, included income tax credit carryforwards are federal income tax credit carryforwards of $4,767, attributable to excess tax benefits from the exercise of non-qualified stock options.

The Company was granted an incentive tax holiday in the Canton of Vaud in Switzerland effective January 1, 2010, with a final expiration date in 2019. The tax holiday will exempt the Company from most local corporate income taxes in Switzerland through the end of 2014 and is expected to be renewed for an additional 5 years.

The Tax Reform Act of 1986 contains certain provisions that can limit a taxpayer's ability to utilize net operating loss and tax credit carryforwards in any given year resulting from cumulative changes in ownership interests in excess of 50 percent over a three-year period. We have determined that these limiting provisions were triggered during a prior year. However, we believe that such limitation is not expected to result in the expiration or loss of any of our federal NOL's and income tax credit carryforwards.

The provision (benefit) for income taxes differs from the U.S. federal statutory tax rate. The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows:


	Year Ended December 31,
	2010			2009			2008
U.S. federal statutory tax rate		35.0	%		35.0	%		35.0	%
State and local income taxes		2.5	%		0.8	%		0.9	%
Foreign income tax rate differential		-4.9	%		5.0	%		-3.3	%
Income tax credits		-1.0	%		-12.1	%		-2.9	%
Foreign income subject to U.S. taxation		1.6	%		0.2	%		8.6	%
Provision (benefit) attributable to foreign currency		0.0	%		0.0	%		4.8	%
Stock option compensation		1.3	%		2.0	%		0.9	%
Other nondeductible and permanent differences		1.1	%		0.3	%		1.7	%
Provision (benefit) attributable to valuation allowances		-0.7	%		-285.5	%		-41.1	%

Effective income tax rate		34.9	%		-254.3	%		4.6	%

Provisions have been made for deferred taxes based on the differences between the basis of the assets and liabilities for financial statement purposes and the basis of the assets and liabilities for tax purposes using currently enacted tax rates and regulations that will be in effect when the differences are expected to be recovered or settled. The components of the deferred tax assets and liabilities are as follows:


	Year Ended December 31,			Year Ended December 31,
	2010			2009
Deferred tax assets:
Net operating losses	$	126,111		$	174,424
Income tax credits		35,293			34,438
Stock compensation		16,814			12,799
Accruals and allowances		28,728			16,439
Intangible assets		8,013			7,568

		214,959			245,668
Valuation allowance		(2,470	)		(3,296	)

Total deferred tax assets		212,489			242,372

Deferred tax liabilities:
Depreciable assets		(37,805	)		(31,090	)
Unrealized gains		(471	)		(453	)

Total deferred tax liabilities		(38,276	)		(31,543	)

Net deferred tax asset	$	174,213		$	210,829

We follow authoritative guidance regarding accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

The beginning and ending amounts of unrecognized tax benefits reconciles as follows:


	2010			2009			2008
Beginning of period balance	$	7,305		$	9,569		$	6,671
Increases for tax positions taken during a prior period		184			59			306
Decreases for tax positions taken during a prior period		(22	)		(3,018	)		—
Increases for tax positions taken during the current period		1,191			695			2,817
Reduction as a result of a lapse of statute of limitations		—			—			(225	)

	$	8,658		$	7,305		$	9,569

The company recognizes the interest accrued and the penalties related to unrecognized tax benefits as a component of tax expense. The total amount of accrued interest and penalties and the tax expense as of December 31, 2010 is $52. Unless related to excess tax benefits from stock options, all of our unrecognized tax benefits, if recognized, would impact the effective tax rate.

We file federal and state income tax returns in the U.S. and in numerous foreign jurisdictions. The U.S. and foreign jurisdictions have statute of limitations ranging from 3 to 5 years. However, the statute of limitations could be extended due to our NOL carryforward position in a number of our jurisdictions. The tax authorities, generally, have the ability to review income tax returns for periods where the statute of limitation has previously expired and can subsequently adjust the NOL carryforward or tax credit amounts. Accordingly, we do not expect to reverse any portion of the unrecognized tax benefits within the next year.

The Company has not provided for U.S. income taxes on undistributed earnings of our non-U.S. subsidiaries as these earnings are permanently reinvested. These earnings would be taxable if repatriated to the U.S. It is not practicable to estimate the amount of additional tax that might be payable if such earnings were remitted to the U.S.

Stock Options and Restricted Stock

12 Months Ended

Dec. 31, 2010

Stock Options and Restricted Stock

Stock Options and Restricted Stock

12.

Stock Options and Restricted Stock

At December 31, 2010, we have one stock option plan, the 2004 Incentive Plan ("2004 Plan"). Under the 2004 Plan, restricted stock and restricted stock units (collectively referred to as Restricted Stock), incentive and non-qualified stock options, and other stock-related awards, may be granted for up to a maximum of 14,937 shares to our directors, officers, key employees and consultants. Stock options granted under all Plans have a maximum contractual term of ten years from the date of grant, have an exercise price not less than the fair value of the stock on the grant date and generally vest over four years.

The following table summarizes the components of share-based compensation expense in the consolidated statements of operations:


	December 31,
	2010		2009		2008
Research and development	$	7,878	$	9,049	$	6,063
Selling, general and administrative		23,194		19,682		17,619

Total share-based compensation expense	$	31,072	$	28,731	$	23,682

For the year ended December 31, 2010, $1,266 of share-based compensation expense was recognized in cost of sales that was previously capitalized into inventory. The corresponding amounts recognized in 2009 and 2008 are not material to the results of operations.

The following table summarizes the share-based compensation capitalized to inventory and fixed assets:


	December 31,
	2010		2009		2008
Share-based compensation expense capitalized to inventory	$	2,785	$	1,403	$	1,215
Share-based compensation expense capitalized to fixed assets	$	—	$	970	$	1,626

The weighted average fair value at the date of grant for options granted during the years ended December 31, 2010, 2009 and 2008 is $17.00, $14.94 and $16.93 per option, respectively.

As of December 31, 2010, there was $55,354 of total unrecognized share-based compensation expense related to non-vested share-based compensation arrangements granted under the Plan. The expense is expected to be recognized over a weighted-average period of 2.57 years.

A summary of the status of our stock option plans at December 31, 2010, and changes during the year then ended is presented in the table and narrative below:


	Number of shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2009		6,474		$	24.78
Granted		1,465			48.07
Exercised		(1,646	)		22.81
Forfeited and cancelled		(179	)		36.80

Outstanding at December 31, 2010		6,114		$	30.54		6.87	$	305,777

Vested and unvested expected to vest at December 31, 2010		5,874		$	30.09		6.81	$	296,417
Exercisable at December 31, 2010		3,684		$	23.08		5.84	$	211,729

Total intrinsic value of stock options exercised during the years ended December 31, 2010, 2009 and 2008 was $64,656, $33,335 and $52,082, respectively. The Company primarily utilizes newly issued shares to satisfy the exercise of stock options. The total fair value of shares vested during the years ended December 31, 2010, 2009 and 2008 was $20,039, $20,734 and $20,034, respectively.

The fair value of options at the date of grant was estimated using the Black-Scholes model with the following ranges of weighted average assumptions:


	Year Ended December 31,	Year Ended December 31,	Year Ended December 31,
	2010	2009	2008
Expected life in years	3.55 - 5.90	3.67 - 6.24	3.67 - 7.73
Interest rate	0.84% - 2.16%	1.41% - 2.19%	1.44% - 3.53%
Volatility	40.70% - 42.48%	40.30% - 48.03%	40.25% - 61.39%
Dividend yield	-	-	-

The expected stock price volatility rates are based on historical volatilities of our common stock. The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The average expected life represents the weighted average period of time that options granted are expected to be outstanding. We have evaluated three distinct employee groups in determining the expected life assumptions, and we estimate the expected life of stock options based on historical experience of exercises, cancellations and forfeitures of our stock options.

A summary of the status of our non-vested Restricted Stock and changes during the period then ended is as follows:


	Year Ended December 31,
	2010
Nonvested restricted stock, beginning of period		944
Shares issued		514
Shares cancelled		(56	)
Shares vesting		(341	)

Nonvested restricted stock, end of period		1,061

Weighted average grant date fair value	$	46.89

Common and Preferred Stock

12 Months Ended

Dec. 31, 2010

Common and Preferred Stock

Common and Preferred Stock

13.

Common and Preferred Stock

Preferred Stock

In February 1997, our Board of Directors declared a dividend of one preferred stock purchase right for each outstanding share of Common Stock (including all future issuances of Common Stock). Under certain conditions, each right may be exercised to purchase one one-hundredth of a share of a new series of preferred stock at an exercise price of $75.00, subject to adjustment (see below). The rights may be exercised only after a public announcement that a party acquired 20 percent or more of our Common Stock or after commencement or public announcement to make a tender offer for 20 percent or more of our Common Stock. The rights, which do not have voting rights, expire on March 6, 2017, and may be redeemed by us at a price of $0.01 per right at any time prior to their expiration or the acquisition of 20 percent or more of our stock. The preferred stock purchasable upon exercise of the rights will have a minimum preferential dividend of $10.00 per year, but will be entitled to receive, in the aggregate, a dividend of 100 times the dividend declared on a share of Common Stock. In the event of liquidation, the holders of the shares of preferred stock will be entitled to receive a minimum liquidation payment of $100 per share, but will be entitled to receive an aggregate liquidation payment equal to 100 times the payment to be made per share of Common Stock.

On February 23, 2007, our Board of Directors amended the purchase price under the preferred stock purchase rights. Further, as a result of the two-for-one stock split of the Company's outstanding shares of Common Stock effected on August 22, 2008, the number of shares of preferred stock purchasable upon proper exercise of each preferred stock purchase right automatically adjusted from one one-hundredth of a share of preferred stock to one two-hundredth of a share of preferred stock. Therefore, the purchase price, for each one two-hundredth of a share of preferred stock to be issued upon the exercise of each preferred stock purchase right is $300.00. Except for the increase in the purchase price, the terms and conditions of the rights remain unchanged.

In the event that we are acquired in a merger, other business combination transaction, or 50 percent or more of our assets, cash flow, or earning power are sold, proper provision shall be made so that each holder of a right shall have the right to receive, upon exercise thereof at the then current exercise price, that number of shares of Common Stock of the surviving company which at the time of such transaction would have a market value of two times the exercise price of the right.

- Definition

This element is used to capture the complete disclosure pertaining to an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation. Stock by Class includes common, convertible and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued and outstanding.

+ References+ Details

Fair Value Measurement

12 Months Ended

Dec. 31, 2010

Fair Value Measurement

Fair Value Measurement

14.

Fair Value Measurement

Authoritative guidance establishes a valuation hierarchy for disclosure of the inputs to the valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2010 and 2009, and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value.


		Fair Value Measurement at December 31, 2010
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Money market funds	$	186,565	$	—	$	186,565	$	—
Marketable securities	Commercial paper	$	65,261	$	—	$	65,261	$	—
Marketable securities	U.S. Corporate bonds	$	19,184	$	—	$	19,184	$	—
Marketable securities	Federal agency obligations	$	10,015	$	—	$	10,015	$	—
Other current assets	Foreign exchange forward contracts	$	9,365	$	—	$	9,365	$	—
Other assets	Foreign exchange forward contracts	$	590	$	—	$	590	$	—
Other current liabilities	Foreign exchange forward contracts	$	11,848	$	—	$	11,848	$	—
Other liabilities	Foreign exchange forward contracts	$	3,380	$	—	$	3,380	$	—


		Fair Value Measurement at December 31, 2009
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Money market funds	$	87,971	$	—	$	87,971	$	—
Marketable securities	U.S. Corporate bonds	$	19,048	$	—	$	19,048	$	—
Other current assets	Foreign exchange forward contracts	$	5,209	$	—	$	5,209	$	—
Other assets	Foreign exchange forward contracts	$	2,061	$	—	$	2,061	$	—
Other current liabilities	Foreign exchange forward contracts	$	4,742	$	—	$	4,742	$	—

Valuation Techniques

Items classified as Level 2 within the valuation hierarchy, consisting of an institutional money market fund held at a multinational financial institution and corporate and federal agency bonds and commercial paper, are valued based upon pricing of securities with similar investment characteristics and holdings. Our derivative assets and liabilities include foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy.

As of December 31, 2010, there has not been any impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties' credit risks.

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2010

Employee Benefit Plans

Employee Benefit Plans

15.

Employee Benefit Plans

Defined Contribution Plan

We have one qualified 401(k) plans covering all eligible employees. Under the plan, employees may contribute up to the statutory allowable amount for any calendar year. We make matching contributions equal to:

•

$1.00 for each dollar contributed up to the first 3 percent of an individual's base salary and incentive cash bonus; and

•

$0.50 for each dollar contributed of the next 2 percent of such compensation.

For the years ended December 31, 2010, 2009 and 2008, we recorded matching contributions of approximately $1,893, $1,552 and $1,298, respectively.

Defined Benefit Plan

We maintain defined benefit plans for employees outside the United States, including a retirement benefit plan required by local law. The plans are valued by independent actuaries using the projected unit credit method. The liabilities correspond to the projected benefit obligations of which the discounted net present value is calculated based on years of employment, expected salary increases, and pension adjustments.

The following table sets forth the funded status and the amounts recognized for defined benefit plans:


	December 31,
	2010			2009
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	5,655		$	2,897
Prior service cost		76			—
Service cost		2,240			763
Interest cost		266			105
Change in assumptions		1,055			70
Recognized actuarial net loss		1,017			351
Foreign currency exchange rate changes		929			194
Transfers into plan		2,120			1,275

Projected benefit obligation, end of year	$	13,358		$	5,655

Accumulated benefit obligation, end of year		11,110			4,598

Change in plan assets:
Fair value of plan assets, beginning of year	$	4,737		$	2,420
Return on plan assets		108			107
Employer contributions		1,646			508
Plan participants' contributions		666			264
Foreign currency exchange rate changes		945			163
Transfers into plan		1,440			1,275

Fair value of plan assets, end of year	$	9,542		$	4,737

Funded status at end of year	$	(3,816	)	$	(918	)

The following table provides information about the fair value of the plan assets per asset category:


	December 31, 2010					December 31, 2009
	Fair Value (Level 2)		as % of total plan assets			Fair Value (Level 2)		as % of total plan assets
Cash and cash equivalents	$	921		10	%	$	—		—
Equity security funds		2,473		26	%		1,326		28	%
Debt security funds		4,934		52	%		2,700		57	%
Real estate funds		1,214		12	%		711		15	%

	$	9,542		100	%	$	4,737		100	%

At December 31, 2010, we have recorded a liability of $3,816 in other non-current liabilities and a charge to accumulated other comprehensive income of $3,018 related to an additional minimum liability.

The following table provides the weighted average assumptions used to calculate net periodic benefit cost and the actuarial present value of projected benefit obligations:


	December 31,
	2010			2009
Weighted average assumptions:
Discount rate		2.7	%		3.5	%
Long term rate of return on assets		4.0	%		4.0	%
Rate of compensation increase		1.5	%		1.5	%

The expected long-term rate of return on plan assets represents a weighted average of expected returns per asset category. It considers historical and estimated future risk free rates of return as well as risk premiums for the relevant investment categories.

The components of net pension expense are as follows:


	December 31,
	2010			2009
Service cost	$	2,240		$	763
Interest cost		266			105
Expected return on plan assets		(265	)		(99	)
Employee contributions		(666	)		(264	)
Amortization of prior service costs		8			—
Amortization and deferral of actuarial gain (loss)		35			12

Net pension expense	$	1,618		$	517

The investment objective of the collective trust is to maximize the overall return from investment income and capital appreciation considering investment strategies and asset allocation limits as determined by pension law. The targeted allocation for these funds (if any) is as follows:


	Target Allocation Ranges in %
Cash and notes receivable issued by banks or insurance companies		0-10	%
Equity securities		16-40	%
Debt securities		38-76	%
Real estate		10-20	%

Other changes in plan assets and benefit obligations recognized in other comprehensive income (OCI) for the year ended December 31, 2010 are as follows:


Amount included in OCI-beginning of year	$	(886	)
Prior service cost		(76	)
Net gain (loss) arising during the period		(1,017	)
Change in assumptions		(1,055	)
Amortization of net gain (loss)		43
Plan assets losses		(157	)
Taxes		130

Amount included in OCI-end of year	$	(3,018	)

We estimate that we will pay employer contributions of approximately $2,372 in 2011. The expected future cash flows to be paid in respect of the pension plans as of December 31 were as follows:


Estimated future benefit payments
2011	$	612
2012		649
2013		779
2014		693
2015		724
2016 to 2020		3,423

- Definition

Description containing the entire pension and other postretirement benefits disclosure as a single block of text.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 158

-Paragraph 7, 21, 22

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5, 6, 7, 8

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 8

-Subparagraph m

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 106

-Paragraph 518

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 87

-Paragraph 264

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph b

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph a

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph h

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph q

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS106-2

-Paragraph 20, 21, 22

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 03-2

-Paragraph 8

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 30

-Paragraph 26

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Implementation Guide (Q and A)

-Number FAS88

-Paragraph 63

+ Details

Revenue and Assets by Geography

12 Months Ended

Dec. 31, 2010

Revenue and Assets by Geography

Revenue and Assets by Geography

16.

Revenue and assets by geography

Revenues and tangible long-lived assets by significant geographic region are as follows:


	Year Ended December 31,
Revenues:	2010		2009		2008
United States	$	205,792	$	159,829	$	113,299
Europe		274,919		215,763		143,645
Other		60,246		11,208		2,155

	$	540,957	$	386,800	$	259,099


	December 31,
Long-lived assets (1):	2010		2009
United States	$	154,227	$	158,621
Europe		6,557		5,637
Other		1,456		433
	$	162,240	$	164,691

(1)	Long-lived assets consist of property, plant and equipment.

Subsequent Events

12 Months Ended

Dec. 31, 2010

Subsequent Events

Subsequent Events

17.

Subsequent Events

On January 28, 2011, Alexion acquired Taligen Therapeutics, Inc. (Taligen), a privately held development-stage biotechnology company based in Cambridge, Massachusetts, in a transaction accounted for as a business combination. The acquisition was intended to broaden Alexion's portfolio of pre-clinical compounds and to expand Alexion's capabilities in translational medicine. Taligen's pre-clinical compounds include product candidates for the potential treatment of patients with ophthalmic diseases such as age-related macular degeneration (AMD), as well as other novel antibody and protein regulators of the complement inflammatory pathways. Alexion made an upfront cash payment of $111,000 for 100 percent of Taligen's equity interests. Additional contingent payments would be earned upon reaching various clinical efficacy and product approval milestones in both the U.S. and European Union for up to six product candidates. If all such clinical efficacy and product approval milestones were achieved in both the U.S. and European Union for six product candidates, the total payments would be $367,000.

On February 10, 2011, Alexion acquired patents and assets from Germany-based Orphatec Pharmaceuticals GmbH (Orphatec) related to an investigational therapy for patients with Type A molybdenum cofactor deficiency (MoCD), an ultra-rare disorder characterized by severe brain damage and rapid death in newborn infants. The acquisition will be accounted for as a business combination. Orphatec is a privately held development-stage biotechnology company with headquarters in Cologne, Germany. Alexion made an upfront cash payment of approximately $3,000. Additional contingent payments of up to $42,000 would be earned upon reaching various development, regulatory and commercial milestones. Alexion also established a research collaboration with key MoCD researchers from Orphatec to accelerate development of the investigational therapy.

Quarterly Financial Information

12 Months Ended

Dec. 31, 2010

Quarterly Financial Information

Quarterly Financial Information

18.

Quarterly Financial Information (unaudited)

The following condensed quarterly financial information is for the years ended December 31, 2010 and 2009:


	Quarter Ended
	March 31		June 30		September 30		December 31
2010:
Revenues	$	117,578	$	125,834	$	141,569	$	155,976
Cost of sales		13,999		13,721		16,495		20,222
Operating expenses		73,009		79,788		82,361		90,724
Operating income		30,570		32,325		42,713		45,030
Net income	$	20,934	$	21,773	$	27,873	$	26,450
Earnings per common share
Basic	$	0.24	$	0.24	$	0.31	$	0.30
Diluted	$	0.23	$	0.24	$	0.30	$	0.27

	March 31		June 30		September 30		December 31
2009:
Revenues	$	81,267	$	92,256	$	102,628	$	110,649
Cost of sales		9,959		10,313		11,895		12,892
Operating expenses		55,741		60,993		62,846		75,102
Operating income		15,567		20,950		27,887		22,655
Net income	$	14,506	$	16,802	$	26,731	$	237,127	(1)
Earnings per common share
Basic	$	0.18	$	0.20	$	0.31	$	2.70
Diluted	$	0.16	$	0.19	$	0.29	$	2.59

(1)

In the fourth quarter of 2009, we determined that it was more likely than not that a significant portion of our deferred tax assets in the United States, primarily net operating losses and research and development credits, would be realized. Accordingly, we recorded a tax benefit of $215,516 as a result of reversing the valuation allowance on these deferred tax assets.

- Definition

This element can be used to disclose the entire quarterly financial data disclosure in the annual financial statements as a single block of text. The disclosure includes a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income (loss) before extraordinary items and cumulative effect of a change in accounting principle and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished. Alternatively, the details of this disclosure can be reported using the elements in this group, or by using other taxonomy elements and applying the appropriate quarterly date and period contexts when creating an instance document. For example, the element for "Interest and Dividend Income, Operating" may be used by financial institutions from the Statement of Income, applying the appropriate quarterly date and period context when creating an instance document.

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