Alexion Pharmaceuticals, Inc. (NasdaqGS:ALXN) entered into a definitive agreement to acquire Achillion Pharmaceuticals, Inc. (NasdaqGS:ACHN) for approximately $880 million on October 15, 2019. Under the terms of the agreement, each share of Achillion common stock will be converted into the right to receive $6.3 in cash and one contractual contingent value right (CVR) pursuant to the CVR agreement. The transaction includes the potential for additional consideration in the form of non-tradeable contingent value rights (CVRs), which will be paid to Achillion shareholders if certain clinical and regulatory milestones are achieved within specified periods. Each CVR represents the right to receive $1.00 per share for the U.S. FDA approval of danicopan and $1.00 per share for ACH-5228 Phase 3 initiation. In addition, at the effective time, each option to purchase shares of Achillion, will be cancelled and converted into the right to receive both a cash payment equal to the excess, if any, of the merger consideration over the exercise price payable per share under such option, multiplied by the total number of shares subject to such in the money option and one CVR for each share subject to such in the money option. For each out of the money option, Achillion will be granted a phantom CVR which will make the option holders eligible to receive future payments. Alexion will also be acquiring the cash on Achillion's balance sheet which is $230 million as of September 30, 2019, but the actual amount will be determined as on the transaction closing date. The transaction is not conditioned upon the receipt of financing by Alexion. The transaction will be funded with cash on hand.

Upon closing, Achillion will become a wholly owned subsidiary of Alexion. In the event of termination, Achillion may be required to pay Alexion a termination fee equal to $20 million. Alexion may be required to pay Achillion a termination fee equal to (i) $30 million if the agreement is terminated prior to April 15, 2020, (ii) $40 million if Alexion has extended the end date and the merger agreement is terminated after April 15, 2020 but on or prior to the July 15, 2020, (iii) $50 million if Alexion has extended the end date twice and the agreement is terminated after July 15, 2020 but on or prior to October 15, 2020 or $60 million if Alexion has extended the end date three times and the agreement is terminated after October 15, 2020. Leadership team will continue to lead Achillion through closing. Ludwig Hanston, Chief Executive Officer of Alexion will lead the combined company and Achillion Board of Directors to remain in place until closing.

The transaction is subject to the approval by the shareholders of Achillion and satisfaction of customary closing conditions, the contingent value right (CVR) agreement being in full force and effect, and approval from relevant regulatory agencies, including clearance under the Hart-Scott Rodino Antitrust Improvements Act. The Board of Directors of Achillion has unanimously approved the transaction. The Board of Alexion has also approved the transaction. The Board of Achillion has received from Centerview Partners LLC an opinion to the effect that, the cash merger consideration, together with one CVR, to be paid to the holders of Achillion pursuant to the agreement is fair, from a financial point of view, to such holders. A special meeting of stockholders of Achillion will be held on December 19, 2019. As of December 19, 2019, shareholder of Achillion approved the transaction. As of January 15, 2020, Achillion and Alexion have each filed their respective notification and report forms pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, with the Federal Trade Commission and the Antitrust Division of the Department of Justice. The 30-calendar-day waiting period is scheduled to expire on February 14, 2020, unless the FTC or DOJ extends that period by requesting additional information from the parties. As of January 24, 2020, Federal Trade Commission granted the early termination notice. The transaction is expected to be completed in the first half of 2020. As of November 20, 2019, the transaction is expected to close prior to second half of 2020.

Centerview Partners LLC acted as the financial advisor for an aggregate fee of $16.5 million and fairness opinion provider while Graham Robinson, Maya Florence, Regina Olshan, Young Park, Maria Raptis, Resa Schlossberg and Moshe Spinowitz of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Achillion Pharmaceuticals. Mark A. Haddad, Dan Clevenger, Teresa Martland, Earl Mellott, Areta Kupchyk, Mike Rosen, Sarah Cooleybeck of Foley Hoag LLP acted as legal advisor for Alexion. RBC Capital Markets Inc. acted as financial advisor to Alexion Pharmaceuticals, Inc. BofA Securities, Inc. acted as financial advisor to Alexion Pharmaceuticals, Inc. Innisfree M&A Inc. acted as the information agent to Achillion Pharmaceuticals and will receive a fee of $25,000 for its services. Gibson, Dunn & Crutcher LLP is advising Centerview Partners LLC as financial advisor to Achillion Pharmaceuticals, in connection with its $880 million cash acquisition by Alexion Pharmaceuticals, Inc.