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Delaware		2834		04-3416587
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code No.)		(I.R.S. Employer Identification Number)

David E. Redlick Stuart R. Nayman Wilmer Cutler Pickering Hale and Dorr LLP 399 Park Avenue New York, New York 10022 (212) 230-8800		Mark E. Boulding Senior Vice President and General Counsel PTC Therapeutics, Inc. 100 Corporate Court South Plainfield, New Jersey 07080-2449 (908) 222-7000		Patrick O’Brien Ropes & Gray LLP One International Place Boston, Massachusetts 02110 (617) 951-7000

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

Underwriting

Price to

Discounts and

Proceeds to

Public

Commissions

PTC

Per Share

$

$

$

Total

$

$

$

MORGAN STANLEY	JPMORGAN

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		Page
Prospectus Summary			1
Risk Factors			6
Special Note Regarding Forward-Looking Statements			24
Use of Proceeds			25
Dividend Policy			25
Capitalization			26
Dilution			28
Selected Financial Data			30
Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
Business			42
Management			73
Certain Relationships and Related Party Transactions			85
Principal Stockholders			87
Description of Capital Stock			90
Shares Eligible for Future Sale			94
Underwriters			96
Legal Matters			99
Experts			99
Where You Can Find More Information			99
Index to Financial Statements			F-1
EX-23.1: CONSENT OF KPMG LLP

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	•	continue our ongoing Phase 2 clinical trials of PTC124 for the treatment of cystic fibrosis and Duchenne muscular dystrophy caused by nonsense mutations and conduct potential later stage clinical trials of PTC124 if our Phase 2 trials are successful;
	•	initiate and pursue clinical trials of PTC299 for the treatment of cancer;
	•	continue the research and development of our other product candidates;
	•	seek to discover and develop additional product candidates;
	•	seek regulatory approvals for our product candidates that successfully complete clinical trials;
	•	establish a sales and marketing infrastructure to commercialize products for which we may obtain regulatory approval; and
	•	add operational, financial and management information systems and personnel, including personnel to support our product development efforts and our obligations as a public company.

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	•	the progress and results of our clinical trials of PTC124 and PTC299;
	•	the success of our hepatitis C virus collaboration with Schering-Plough;
	•	the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates;
	•	the costs, timing and outcome of regulatory review of our product candidates;
	•	the number and development requirements of other product candidates that we pursue;
	•	the costs of commercialization activities, including product marketing, sales and distribution;
	•	the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
	•	the extent to which we acquire or invest in businesses, products and technologies; and
	•	our ability to establish and maintain collaborations.

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	•	successful completion of clinical trials;
	•	successful completion of additional preclinical studies, such as the additional toxicity study of PTC124 that we are conducting in rats, at the request of the United States Food and Drug Administration, or FDA;
	•	receipt of marketing approvals from the FDA and similar regulatory authorities outside the United States;
	•	establishing commercial manufacturing arrangements with third-party manufacturers;
	•	launching commercial sales of the product, whether alone or in collaboration with others;
	•	acceptance of the product by patients, the medical community and third-party payors;
	•	competition from other therapies; and
	•	a continued acceptable safety profile of the product following approval.

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	•	regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
	•	our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect to be promising;
	•	the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we currently anticipate, or participants may drop out of our clinical trials at a higher rate than we anticipate, any of which would result in significant delays;
	•	our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner;
	•	we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;
	•	regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
	•	the cost of our clinical trials may be greater than we anticipate;

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	•	the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate because we do not currently have any agreements with third-party manufacturers for the long-term commercial supply of any of our product candidates; and
	•	the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.

	•	be delayed in obtaining marketing approval for our product candidates;
	•	not be able to obtain marketing approval;
	•	obtain approval for indications that are not as broad as intended; or
	•	have the product removed from the market after obtaining marketing approval.

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	•	the prevalence and severity of any side effects;
	•	the efficacy and potential advantages over alternative treatments;
	•	the ability to offer our product candidates for sale at competitive prices;
	•	relative convenience and ease of administration;
	•	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
	•	the strength of marketing and distribution support; and
	•	sufficient third-party coverage or reimbursement.

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	•	a covered benefit under its health plan;
	•	safe, effective and medically necessary;
	•	appropriate for the specific patient;
	•	cost-effective; and
	•	neither experimental nor investigational.

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	•	decreased demand for any product candidates or products that we may develop;
	•	injury to our reputation;
	•	withdrawal of clinical trial participants;
	•	costs to defend the related litigation;
	•	substantial monetary awards to trial participants or patients;
	•	loss of revenue; and
	•	the inability to commercialize any products that we may develop.

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	•	reliance on the third party for regulatory compliance and quality assurance;
	•	the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and
	•	the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.

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	•	our collaboration agreements are likely to be for fixed terms and subject to termination by our collaborators in the event of a material breach or lack of scientific progress by us;
	•	our collaborators are likely to have the first right to maintain or defend our intellectual property rights and, although we would likely have the right to assume the maintenance and defense of our intellectual property rights if our collaborators do not, our ability to do so may be compromised by our collaborators’ acts or omissions; and
	•	our collaborators may utilize our intellectual property rights in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential liability.

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	•	restrictions on such products, manufacturers or manufacturing processes;
	•	warning letters;
	•	withdrawal of the products from the market;
	•	refusal to approve pending applications or supplements to approved applications that we submit;
	•	recall;
	•	fines;
	•	suspension or withdrawal of regulatory approvals;
	•	refusal to permit the import or export of our products;
	•	product seizure; or
	•	injunctions or the imposition of civil or criminal penalties.

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	•	establish a classified board of directors such that not all members of the board are elected at one time;

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	•	allow the authorized number of our directors to be changed only by resolution of our board of directors;
	•	limit the manner in which stockholders can remove directors from the board;
	•	establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;
	•	require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;
	•	limit who may call stockholder meetings;
	•	authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and
	•	require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.

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	•	results of clinical trials of our product candidates or those of our competitors;
	•	regulatory or legal developments in the United States and other countries;
	•	variations in our financial results or those of companies that are perceived to be similar to us;
	•	changes in the structure of healthcare payment systems;
	•	market conditions in the pharmaceutical and biotechnology sectors and issuance of new or changed securities analysts’ reports or recommendations;
	•	general economic, industry and market conditions; and
	•	the other factors described in this “Risk Factors” section.

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	•	our plans to develop and commercialize PTC124 and PTC299;
	•	our collaborations with Schering-Plough and Bausch & Lomb;
	•	our ongoing and planned discovery programs, preclinical studies and clinical trials;
	•	the potential benefits of our existing collaboration agreements and our ability to enter into selective additional collaboration arrangements;
	•	the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;
	•	the rate and degree of market acceptance and clinical utility of our products;
	•	our ability to quickly and efficiently identify and develop product candidates;
	•	the extent to which our scientific approach may potentially address a broad range of diseases across multiple therapeutic areas;
	•	our commercialization, marketing and manufacturing capabilities and strategy;
	•	our intellectual property position; and
	•	our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.

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	•	approximately $           million to fund a portion of our development activities for PTC124, including the ongoing Phase 2 clinical trials of PTC124 for the treatment of cystic fibrosis and Duchenne muscular dystrophy and potential later stage clinical trials if our Phase 2 trials are successful;
	•	approximately $           million to fund a portion of our development activities for PTC299, including our Phase 1a clinical trial in healthy volunteers and our planned Phase 1b clinical trial in cancer patients;
	•	approximately $           million to fund research and development for our discovery programs; and
	•	the balance, if any, to fund working capital, capital expenditures and other general corporate purposes, which may include the acquisition or licensing of complementary technologies, products or businesses.

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	•	on an actual basis;
	•	on a pro forma basis to give effect to the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 13,504,722 shares of common stock upon the closing of this offering; and
	•	on a pro forma as adjusted basis to give further effect to our issuance and sale of                      shares of common stock in this offering at an assumed initial public offering price of $           per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and offering expenses payable by us.

				As of March 31, 2006
												Pro Forma
				Actual				Pro Forma				As Adjusted
				(in thousands)
				(unaudited)
Cash and cash equivalents and short-term investments(1)				$	41,166			$	41,166			$
Long-term debt, net of current portion				$	634			$	634			$
Stockholders’ equity:
	Series A convertible preferred stock, par value $0.001 per share; 750,000 shares authorized, issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				750				—
	Series B convertible preferred stock, par value $0.001 per share; 187,500 shares authorized, issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				365				—
	Series C convertible preferred stock, par value $0.001 per share; 6,295,000 shares authorized and 6,000,000 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				14,117				—
	Series D convertible preferred stock, par value $0.001 per share; 13,800,000 shares authorized and 13,095,769 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				39,282				—
	Series E convertible preferred stock, par value $0.001 per share; 128,242,850 shares authorized and 125,740,607 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				49,048				—
	Series E-2 convertible preferred stock, par value $0.001 per share; 4,132,232 shares authorized and 3,670,138 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				26,510				—
	Preferred Stock, par value $0.001 per share; no shares authorized, issued or outstanding, actual and pro forma;          shares authorized and no shares issued or outstanding, pro forma as adjusted
	Common stock, par value $0.001 per share; 18,228,538 shares authorized, actual and pro forma; 11,889 shares issued and outstanding, actual; 13,516,611 shares issued and outstanding, pro forma;          shares authorized and          shares issued and outstanding, pro forma as adjusted				—				14
Additional paid-in capital(1)					532				130,590
Accumulated other comprehensive loss					(34	)			(34	)
Accumulated deficit					(99,525	)			(99,525	)
		Total stockholders’ equity(1)			31,045				31,045
		Total capitalization(1)		$	31,679			$	31,679			$

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) each of cash and cash equivalents and short-term investments, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions.

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	•	2,340,715 shares of common stock issuable upon exercise of options outstanding as of March 31, 2006 at a weighted average exercise price of $2.40 per share;
	•	277,151 shares of common stock issuable upon the exercise of warrants outstanding as of March 31, 2006 at a weighted average exercise price of $17.86 per share;
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 equity plan as of the closing of this offering; and
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 employee stock purchase plan as of the closing of this offering.

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Assumed initial public offering price per share							$
	Historical net tangible book value per share as of March 31, 2006		$
	Increase attributable to the conversion of outstanding preferred stock
	Pro forma net tangible book value per share as of March 31, 2006
	Increase per share attributable to new investors
Pro forma net tangible book value per share after this offering
Dilution per share to new investors							$

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Shares Purchased

Total Consideration

Average

Price per

Number

Percentage

Amount

Percentage

Share

Existing stockholders

%

%

$

New investors

Total

100

%

100

%

	•	2,340,715 shares of common stock issuable upon exercise of stock options outstanding as of March 31, 2006 at a weighted average exercise price of $2.40 per share;
	•	277,151 shares of common stock issuable upon the exercise of warrants outstanding as of March 31, 2006 at a weighted average exercise price of $17.86 per share;
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 equity plan as of the closing of this offering; and
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 employee stock purchase plan as of the closing of this offering.

	•	the percentage of shares of common stock held by existing stockholders will decrease to approximately      % of the total number of shares of our common stock outstanding after this offering; and
	•	the pro forma as adjusted number of shares held by new investors will be increased to                     , or approximately      %, of the total pro forma as adjusted number of shares of our common stock outstanding after this offering.

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																								Three Months Ended
				Year Ended December 31,																				March 31,
				2001				2002				2003				2004				2005				2005				2006
																								(unaudited)
				(in thousands, except share and per share data)
Statements of Operations Data:
Revenues				$	—			$	180			$	756			$	1,606			$	4,967			$	1,157			$	1,563
Operating expenses:
	Research and development				5,808				10,238				17,695				20,070				21,123				6,823				6,529
	General and administrative				3,395				4,165				4,693				6,023				7,944				1,899				2,745
		Total operating expenses			9,203				14,403				22,388				26,093				29,067				8,722				9,274
		Loss from operations			(9,203	)			(14,223	)			(21,632	)			(24,487	)			(24,100	)			(7,565	)			(7,711	)
Interest income					1,043				769				317				579				854				162				372
Interest expense					(54	)			(270	)			(358	)			(184	)			(141	)			(29	)			(42	)
		Loss before tax benefit			(8,214	)			(13,724	)			(21,673	)			(24,092	)			(23,387	)			(7,432	)			(7,381	)
Tax benefit					—				232				235				451				479				—				—
Loss applicable to common stockholders				$	(8,214	)		$	(13,492	)		$	(21,438	)		$	(23,641	)		$	(22,908	)		$	(7,432	)		$	(7,381	)
Basic and diluted loss per share applicable to common stockholders				$	(134,477	)		$	(201,365	)		$	(315,259	)		$	(347,670	)		$	(9,925	)		$	(8,602	)		$	(843	)
Shares used to compute basic and diluted loss per share applicable to common stockholders					62				67				68				68				2,308				864				8,752
Pro forma basic and diluted net loss per common share (unaudited)																				$	(2.11	)						$	(0.55	)
Shares used to compute pro forma basic and diluted net loss per common share (unaudited)																					10,831,634								13,513,474

		As of December 31,
																						As of March 31,
		2001				2002				2003				2004				2005				2006
																						(unaudited)
		(in thousands)
Balance Sheet Data:
Cash and cash equivalents and short-term investments		$	32,507			$	24,599			$	41,570			$	32,987			$	37,840			$	41,166
Working capital			31,669				22,119				37,045				29,580				34,331				34,319
Total assets			44,401				34,800				49,054				38,968				43,974				48,405
Long-term debt, net of current portion			621				2,728				846				205				804				634
Deficit accumulated during the development stage			(10,666	)			(24,157	)			(45,595	)			(69,237	)			(92,144	)			(99,525	)
Total stockholders’ equity			42,340				28,896				43,275				34,613				38,401				31,045

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	•	PTC124 for genetic disorders. We are currently conducting two Phase 2 clinical trials of PTC124 in patients with cystic fibrosis and one Phase 2 clinical trial of PTC124 in patients with Duchenne muscular dystrophy in cases in which a nonsense mutation is the cause of the disease. We have conducted an interim analysis of data from 15 patients who have completed their participation in our cystic fibrosis trials.
	•	PTC299 for oncology. In April 2006, we commenced a Phase 1a clinical trial of PTC299 in healthy volunteers in Belgium. If this Phase 1a trial is successful, we plan to initiate a Phase 1b clinical trial of PTC299 in late 2006 in patients with advanced solid tumors whose disease has progressed during therapy or for whom there is no effective therapy available.
	•	Hepatitis C development program. In March 2006, we entered into a collaboration with Schering-Plough Corporation for the development and commercialization of our compounds for the potential treatment of hepatitis C.

	Revenues

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	Research and Development Expense

	•	external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants;
	•	employee-related expenses, which include salaries and benefits for the personnel involved in our drug discovery and development activities; and
	•	facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory and other supplies.

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															Research and Development Expenses
																											Three
																											Months
											Estimated				Year Ended												Ended
											Completion				December 31,												March 31,
							Phase of				of Current
Product Candidate			Indication				Development				Trial				2003				2004				2005				2005				2006
															(in thousands)
Clinical development:
	PTC124		Cystic Fibrosis; Duchenne Muscular Dystrophy					Phase 2				2006			$	2,642			$	6,018			$	5,132			$	1,708			$	2,184
	PTC299			Cancer				Phase 1a				2006				—				83				2,021				992				608
Total clinical development																2,642				6,101				7,153				2,700				2,792
Research and preclinical																15,053				13,969				13,970				4,123				3,737
Total research and development															$	17,695			$	20,070			$	21,123			$	6,823			$	6,529

	•	the scope, rate of progress and expense of our clinical trials and other research and development activities;
	•	the potential benefits of our product candidates over other therapies;
	•	our ability to market, commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future;
	•	future clinical trial results;
	•	the terms and timing of regulatory approvals; and
	•	the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

	General and Administrative Expense

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	Interest Income and Interest Expense

	Revenue Recognition

	Accrued Expenses

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	•	fees paid to contract research organizations in connection with preclinical and toxicology studies and clinical trials;
	•	fees paid to investigative sites in connection with clinical trials;
	•	fees paid to contract manufacturers in connection with the production of clinical trial materials; and
	•	professional service fees.

	Stock-Based Compensation

	•	pricing of private sales of our preferred stock;
	•	prior valuations of stock grants and preferred stock sales and the effect of events, including the progression of our product candidates, that have occurred between the time of the grants or sales;
	•	comparative rights and preferences of the security being granted compared to the rights and preferences of our other outstanding equity;
	•	comparative values of public companies discounted for the risk and limited liquidity provided for in the shares we are issuing;
	•	perspective provided by unrelated valuation specialists;
	•	perspective provided by investment banks, including the likelihood of an initial public offering and our potential value in an initial public offering; and
	•	general economic trends.

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	Income Taxes

	Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

	•	decreased costs for preclinical studies and manufacturing for PTC124 and PTC299 of $1.1 million;
	•	increased costs for clinical studies for PTC124 of $728,000; and
	•	increased personnel costs of $235,000.

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	•	increased legal and consulting expenses of $101,000;
	•	increased patent-related expense of $402,000 related to filings for PTC124, PTC299 and compounds in our HCV program; and
	•	increased personnel, facilities, and other corporate expenses of approximately $340,000.

	Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

	•	increased costs for preclinical studies and manufacturing for PTC299 of $1.6 million;
	•	increased costs for preclinical studies for PTC124 of $895,000; and
	•	decreased costs for clinical studies and manufacturing for PTC124 of $1.6 million.

	•	increased personnel costs of $1.1 million attributable to increased salaries as well as increased headcount in legal and human resources;

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	•	increased consulting expense of $290,000 related to commercialization planning and information technology infrastructure; and
	•	increased patent-related expense of $528,000 related to filings for PTC124, PTC299 and compounds in our HCV program.

	Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

	•	increased costs of clinical studies and manufacturing for PTC124 of $2.6 million;
	•	increased laboratory supply and library compound costs of $408,000;
	•	increased personnel costs of $1.1 million; and
	•	decreased in-process research and development of $1.4 million.

	•	increased personnel costs of $450,000 attributable to increased salaries and increased headcount in investor relations and general management;
	•	increased consulting expense of $419,000 related to increased legal and human resource temporary staffing;
	•	increased patent and legal expense of $254,000 related to filings for PTC124 and general corporate legal expenses; and
	•	increased miscellaneous corporate expenses of $216,000.

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															Three Months
			Year Ended December 31,												Ended March 31,
			2003				2004				2005				2005				2006
			(in thousands)
Cash provided by (used in):
	Operating activities		$	(16,225	)		$	(22,408	)		$	(20,720	)		$	(7,012	)		$	4,395
	Investing activities			13,618				(20,218	)			(1,647	)			7,990				5,651
	Financing activities			32,223				13,425				26,555				582				(146	)
Capital expenditures (included in investing activities above)				667				1,121				963				274				425

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	•	the progress and results of our clinical trials of PTC124 and PTC299;
	•	the success of our hepatitis C virus collaboration with Schering-Plough;
	•	the scope, progress, results and costs of preclinical development and laboratory testing and clinical trials for our other product candidates;
	•	the costs, timing and outcome of regulatory review of our product candidates;
	•	the number and development requirements of other product candidates that we pursue;
	•	the costs of commercialization activities, including product marketing, sales and distribution;
	•	the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
	•	the extent to which we acquire or invest in businesses, products and technologies; and
	•	our ability to establish and maintain collaborations.

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						Less than				1-3				4-5				More than
		Total				1 Year				Years				Years				5 Years
Equipment financing obligations		$	1,282			$	478			$	774			$	30			$	—
Operating lease obligations			1,338				384				785				169				—
Total fixed contractual obligations		$	2,620			$	862			$	1,559			$	199			$	—

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	•	PTC124 for genetic disorders. We are developing PTC124 for the treatment of patients with genetic disorders that arise as a result of a type of genetic mutation known as a nonsense mutation. Our initial target indications for PTC124 are cystic fibrosis and Duchenne muscular dystrophy in cases in which a nonsense mutation is the cause of the disease. We are currently conducting two Phase 2 clinical trials of PTC124 in patients with cystic fibrosis and one Phase 2 clinical trial of PTC124 in patients with Duchenne muscular dystrophy. We recently performed an interim analysis of data from 15 patients who have completed our ongoing cystic fibrosis trials and observed results which suggest that PTC124 may have pharmacological activity that addresses the underlying cause of cystic fibrosis in these patients.
	•	PTC299 for oncology. We are developing PTC299 initially for the treatment of cancer. In April 2006, we commenced a Phase 1a clinical trial of PTC299 in healthy volunteers in Belgium. If this Phase 1a clinical trial is successful, we plan to initiate a Phase 1b clinical trial of PTC299 in cancer patients in late 2006.
	•	Hepatitis C development program. We have identified a number of small-molecule compounds that, in preclinical tests, inhibited hepatitis C viral protein synthesis and the production of the virus. These compounds target a specific site on the viral mRNA known as an internal ribosomal entry site, or IRES, which is critical to the replication of the hepatitis C virus. In March 2006, we entered into a collaboration with Schering- Plough for the development of these compounds.

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Program		Development Status		Commercialization Rights
PTC124 for genetic disorders		Phase 2 clinical trials in cystic fibrosis and Duchenne muscular dystrophy ongoing; analysis of interim data from cystic fibrosis trials completed		PTC
PTC299 for oncology		Phase 1a clinical trial in healthy volunteers ongoing; Phase 1b clinical trial in cancer patients planned		PTC
Hepatitis C virus program		Preclinical		Schering-Plough Corporation
Antibacterial program		Discovery		PTC
Anemia program		Discovery		PTC
Musculoskeletal program		Discovery		PTC
Ophthalmology program		Subject of research collaboration		Bausch & Lomb

	PTC124

	Background on Genetic Disorders and Nonsense Mutations

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	Cystic Fibrosis

	Duchenne Muscular Dystrophy

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	PTC124 Scientific Background

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	Preclinical Development of PTC124

	•	The administration of PTC124 resulted in the production of full-length and functionally active CFTR in a mouse model of cystic fibrosis. Similarly, the administration of PTC124 resulted in the production of full-length and functionally active dystrophin in both in vitro and animal models of Duchenne muscular dystrophy.
	•	PTC124 demonstrated greater potency and activity than gentamicin controls in the read through of premature stop codons in in vitro studies.
	•	In in vitro and animal safety pharmacology studies, PTC124’s activity was specific for the premature stop codons resulting from nonsense mutations. There was no evidence of read through of normal stop codons in these studies, even when PTC124 was tested at significantly higher plasma concentrations than those that we expect to see in patients.

	Clinical Development of PTC124

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	•	Mean change in TEPD chloride conductance. This is the average among all study participants of the changes from the beginning to the end of the treatment period in each participant’s TEPD chloride conductance. For example, if the study consisted of three participants and if the changes in TEPD chloride conductance for the three participants were -7.0 mV, -2.0 mV and -9.0 mV, the mean change in TEPD chloride conductance among these participants would be -6.0 mV.
	•	Percentage of patients with a chloride conductance response. This is the percentage of patients who demonstrated a TEPD chloride conductance response at the end of each treatment period with PTC124. For purposes of the trials, a chloride conductance response is defined as a TEPD chloride conductance improvement of at least -5.0 mV. For example, in a patient with a TEPD chloride conductance value of +1.0 mV at baseline and a TEPD chloride conductance value of -6.0 mV at the end of treatment, the TEPD chloride conductance improvement would be -7.0 mV, representing a chloride conductance response.
	•	Percentage of patients with improvements of TEPD chloride conductance values into the normal range. As noted above, a chloride conductance equal to or more electrically negative than -5.0 mV is generally considered to be in the normal range. As such, a patient with a TEPD chloride conductance value of +1.0 mV at baseline would be considered to have an abnormal value because the value is more electrically positive than -5.0 mV. If, at the end of treatment, that patient’s TEPD chloride conductance value improved to -6.0 mV, this would represent an improvement into the normal range because the improved value is more electrically negative than -5.0 mV.

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	•	statistically significant mean improvements in TEPD chloride conductance;
	•	statistically significant percentages of patients with a TEPD chloride conductance response; and
	•	statistically significant increases in the percentage of patients with a TEPD chloride conductance value in the normal range.

Lower Dose Level

Higher Dose Level

TEPD Result

Result

p-Value

Result

p-Value

Mean change in TEPD chloride conductance:

Best of nostrils

-9.0 mV

<0.001

-6.4 mV

0.009

Mean of both nostrils

-6.7 mV

<0.001

-4.4 mV

0.023

Number of patients with³ -5 mV improvement in TEPD chloride conductance:

Best of nostrils

9/15 (60)%

<0.001

8/15 (53)%

<0.001

Mean of both nostrils

6/15 (40)%

0.005

7/15 (47)%

<0.001

Number of patients with improvement in TEPD chloride conductance to normal:

Best of nostrils

8/15 (53)%

0.008

8/15 (53)%

0.008

Mean of both nostrils

6/15 (40)%

0.032

7/15 (47)%

0.016

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							End of
							Higher
			Study				Dose
Endpoint			Entry				Treatment				Change				p-Value
Lung function (expressed as a percentage of normal for gender, age and height):
	Mean FEV 1			65.8	%			69.1	%			3.3	%			0.015
	Mean FVC			80.2	%			85.1	%			4.9	%			0.037
Weight				58.3	kg			59.0	kg			0.7	kg			0.012

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	Plans for Future Development

	PTC299

	Background on Cancer and the Role of VEGF

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	PTC299 Scientific Background

	Preclinical Development of PTC299

	•	In in vitro studies PTC299 was a potent inhibitor of tumor VEGF production. In these studies, PTC299 demonstrated a broad range of activity in blocking VEGF synthesis in multiple tumor types, including breast, cervical, colorectal, fibrosarcoma, gastric, lung, melanoma, neuroblastoma, ovarian, pancreas, prostate and renal cell cancer lines.
	•	In multiple animal studies, PTC299 as a monotherapy significantly reduced VEGF concentrations in tumors and plasma, reduced tumor blood vessel density and substantially impeded tumor progression. In addition, in animal studies, PTC299 enhanced the antitumor activity of chemotherapy agents and of Avastin when given as a component of combination therapy.

	Clinical Development of PTC299

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	Plans for Future Development

	Hepatitis C Program

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	Background on Hepatitis C

	HCV Program Scientific Background

	Lead Compound Optimization and Plans for Future Development

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	Antibacterial Program

	Anemia Program

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	Musculoskeletal Program

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	The Importance of UTRs in Post-Transcriptional Control Processes

	Our GEMS and Other Discovery Technologies

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	Our Compound Library

	Integrated Research and Development Infrastructure

	Use of Pharmacodynamic Markers in Clinical Trials

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	•	Rapidly advance our lead programs. We are devoting a significant portion of our resources and business efforts to completing the development of our most advanced product candidates. We plan to complete our Phase 2 clinical trials of PTC124 for the treatment of cystic fibrosis and Duchenne muscular dystrophy and advance this product candidate into pivotal clinical trials as rapidly as possible. In addition, we believe that PTC124 may have applicability to a significant number of other genetic disorders for which a nonsense mutation is the cause of the disease. Similarly, we believe that PTC299, our anti-angiogenesis product candidate, may have potential to treat a range of solid tumor cancers as well as other diseases in which angiogenesis and VEGF overexpression play a role, such as age-related macular degeneration. We plan to pursue these additional potential commercial opportunities for PTC124 and PTC299 aggressively. For our genetic disorder program with PTC124, we are collaborating with patient advocacy groups, foundations and government agencies in order to obtain financial support, access to thought leaders and assistance in obtaining market acceptance of products that we successfully develop. We plan to pursue similar activities in other programs.
	•	Apply our integrated approach to continue to discover and develop small molecules that alter post-transcriptional control processes. We are applying several proprietary technologies, including GEMS, to the discovery and development of small molecules designed to exert therapeutic effects by altering post-transcriptional control processes. We have steadily enhanced these technologies, which span the key disciplines of biology, chemistry and pharmacology, over a number of years. Because post-transcriptional control processes offer many targets for therapeutic intervention and because drugs that alter these processes have the potential to both up-regulate and down-regulate protein production, we believe that our approach may be applicable to a broad range of diseases. We plan to continue to build our technologies for application in the field of post-transcriptional control processes and to apply these technologies in discovering and developing treatments in new therapeutic areas.
	•	Build a specialized sales and marketing infrastructure. We plan to establish our own sales and marketing capabilities. We expect to accomplish this initially by retaining commercial rights for our product candidates for which we receive marketing approvals in situations in which we believe it is possible to access the market through a focused, specialized sales force. For example, for PTC124, we believe that the pulmonologists and neurologists who are the key specialists in treating cystic fibrosis and Duchenne muscular dystrophy are sufficiently concentrated that we will be able to effectively promote the product with our own targeted sales force. For some situations in which we enter into commercial collaborations with third-party pharmaceutical and biotechnology companies, our goal will be to maintain co-promotion or co-commercialization rights in the United States and, in some cases, other markets, in order to further develop our internal sales and marketing capabilities.
	•	Selectively establish strategic alliances with leading pharmaceutical and biotechnology companies. For each of our product candidates, we plan to evaluate the merits of retaining commercialization rights for ourselves or entering into collaboration arrangements with leading pharmaceutical or

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		biotechnology companies, such as our collaborations with Schering-Plough and Bausch & Lomb. Our decision to enter into additional collaboration arrangements will be based on such factors as anticipated development costs, therapeutic expertise and the commercial infrastructure required to access a particular market. We generally plan to seek collaborators for the development and commercialization of product candidates that have high anticipated development costs or that are directed at indications for which a potential collaborator has a particular expertise or that involve markets that can be served more effectively by a large sales and marketing organization.

	Schering-Plough

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	•	the right to terminate the collaboration agreement upon prior written notice at any time after the third anniversary of the effective date of the agreement;
	•	the right to terminate the collaboration agreement if, during the research term, a third-party patent or patent application that could substantially interfere with compounds that we are pursuing under the research collaboration is granted or published in a major market and we are not able to mutually agree on an applicable course of action or obtain a non-infringement opinion with respect to such patent or patent application; and
	•	the right to terminate the research program or the collaboration agreement upon prior written notice if Schering-Plough has not accepted a development candidate within two years of the effective date of the agreement.

	Bausch & Lomb

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	Patents and Trade Secrets

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	License Agreements

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	•	PTC124 for cystic fibrosis. There are currently no approved therapeutics to treat the root causes of cystic fibrosis. Current treatments are designed to alleviate the symptoms of the disease and depend upon the stage of the disease and the organs involved. Clearing mucus from the lungs is an important part of the daily cystic fibrosis treatment regimen. Chest physical therapy is a form of airway clearance that involves vigorous clapping on the back and chest to dislodge the thick mucus from the lungs. Other treatments for cystic fibrosis include TOBI, an aerosolized antibiotic used to treat lung infections that is marketed by Chiron Corporation, Pulmozyme, a mucus-thinning drug shown to reduce the number of lung infections and improve lung function, that is marketed by Genentech, Inc., and azithromycin, an antibiotic recently proven to be effective in people with cystic fibrosis whose lungs are chronically infected with the common bacteria known as Pseudomonas aeruginosa. We believe that PTC124 is the only orally administered product candidate in clinical trials that is designed to treat the root cause of cystic fibrosis by restoring CFTR activity through the read through of a nonsense mutation. However, we are aware of other preclinical and clinical programs of third parties aimed at modulating CFTR function, including programs of Alnylam Pharmaceuticals, Inc. and Vertex Pharmaceuticals Incorporated. In addition, various other anti-inflammatory, anti-infective and mucus regulating product candidates are in clinical development.
	•	PTC124 for Duchenne muscular dystrophy. There are currently no approved therapeutics to treat the root causes of Duchenne muscular dystrophy. Current treatments seek to address symptoms through supportive care measures, such as bracing, joint stretching exercises, tendon release surgery, wheelchair use and assisted ventilation. Corticosteroids, such as prednisone and deflazacort are often prescribed to treat some of the symptoms of the disease. We believe that PTC124 is the only product candidate in clinical trials that is designed to treat the root cause of Duchenne muscular dystrophy by restoring dystrophin activity through the read through of a nonsense mutation. We are aware of early stage gene therapy programs of third parties targeting Duchenne muscular dystrophy. Various growth factors in development for other indications, including other forms of muscular dystrophy and amyotrophic lateral sclerosis, may, if approved, be used for the treatment of Duchenne muscular dystrophy. In addition, Wyeth has a potentially muscle-enhancing product candidate in Phase 2 clinical trials for muscular dystrophy.
	•	PTC299. If approved for the treatment of cancer, PTC299 would compete with numerous cancer therapies. Most notably, we expect that PTC299 would compete with other anti-angiogenesis therapies. These include Genentech’s Avastin and Bayer’s and Onyx’s Nexavar, which act by preventing VEGF from binding to its receptor, and Pfizer Inc.’s Sutent, a tyrosine kinase inhibitor. We are also aware of numerous other anti-angiogenesis cancer therapies in development by third

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		parties, including the VEGF Trap, which is in development by Sanofi-Aventis and Regeneron. However, we are not aware of any other product candidates that, like PTC299, are designed to prevent VEGF formation by targeting post-transcriptional control processes.
	•	HCV. The current standard of care for the treatment of HCV is the combination of interferon and ribavirin. In addition, there are numerous product candidates for the treatment of HCV in clinical development. These include product candidates of Idenix Pharmaceuticals, Inc. and Vertex Pharmaceuticals.

	United States Government Regulation

	The NDA Approval Process

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	•	completion of preclinical laboratory tests, animal studies and formulation studies under the FDA’s good laboratory practices regulations;
	•	submission to the FDA of an investigational new drug application, or IND, for human clinical testing, which must become effective before human clinical trials may begin and which must include independent Institutional Review Board, or IRB, approval at each clinical site before the trials may be initiated;
	•	performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication;
	•	submission to the FDA of an NDA;
	•	satisfactory completion of an FDA Advisory Committee review, if applicable;
	•	satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; and
	•	FDA review and approval of the NDA.

	•	evaluate dosage tolerance and appropriate dosage;
	•	identify possible adverse effects and safety risks; and
	•	provide a preliminary evaluation of the efficacy of the drug for specific indications.

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	Post-Approval Requirements

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	Orphan Drug Designation

	Fast Track Designation

	Regulation Outside the United States

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	•	our research and development programs;
	•	the design and implementation of our clinical trials;
	•	market opportunities from a clinical perspective;
	•	new technologies relevant to our research and development programs; and
	•	scientific and technical issues relevant to our business.

Name		Professional Affiliation
Allan Jacobson, Ph.D.		Chairman of the Department of Molecular Genetics and Microbiology, University of Massachusetts Medical School
Eric N. Jacobsen, Ph.D.		Professor, Department of Chemistry and Chemical Biology, Harvard University
Paul A. Marks, M.D.		President Emeritus and Head, Developmental Cell Biology Laboratory, Memorial Sloan-Kettering Cancer Center
Joseph Puglisi, Ph.D.		Professor and Chair, Department of Structural Biology and Director of the Stanford Magnetic Resonance Laboratory, Stanford University School of Medicine
Robert Schneider, Ph.D.		Professor, Department of Microbiology, Program in Microbiology, Cellular and Molecular Biology, Molecular Oncology and Immunology, and co-director of translational cancer research and breast cancer research programs, New York University School of Medicine
H. Lee Sweeney, Ph.D.		Professor and Chairman of Physiology, University of Pennsylvania School of Medicine
Marvin Wickens, Ph.D.		Professor of Biochemistry, University of Wisconsin-Madison; former President of the RNA Society

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Name		Age				Position
Stuart W. Peltz, Ph.D.			46			President and Chief Executive Officer and Director
William D. Ju, M.D.			49			Chief Operating Officer
Langdon Miller, M.D.			52			Chief Medical Officer
William Baird, III			34			Chief Financial Officer
John Babiak, Ph.D.			49			Senior Vice President, Drug Discovery Technologies
Mark E. Boulding			45			Senior Vice President and General Counsel
Michael Schmertzler(2)(3)			54			Chairman of the Board of Directors
Harvey Berger, M.D.(2)			55			Director
Axel Bolte(2)			34			Director
Søren Carlsen, Ph.D.			53			Director
Carl Goldfischer, M.D.(1)(3)			47			Director
Allan Jacobson, Ph.D.			60			Director
Michael Kranda(1)			52			Director
David P. Southwell(1)(3)			45			Director

(1)	Member of the Audit Committee.
(2)	Member of the Compensation Committee.
(3)	Member of the Nominating and Corporate Governance Committee.

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	•	the class I directors will be Mr. Bolte, Dr. Goldfischer and Mr. Kranda, and their term will expire at the annual meeting of stockholders to be held in 2007;

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	•	the class II directors will be Dr. Berger and Mr. Schmertzler, and their term will expire at the annual meeting of stockholders to be held in 2008; and
	•	the class III directors will be Dr. Peltz and Mr. Southwell, and their term will expire at the annual meeting of stockholders to be held in 2009.

	Audit Committee

	•	appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
	•	overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from our independent registered public accounting firm;
	•	reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
	•	monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
	•	establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;
	•	meeting independently with our independent registered public accounting firm and management; and
	•	preparing the audit committee report required by Securities and Exchange Commission rules.

	Compensation Committee

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	•	reviewing and approving, or making recommendations to our board of directors with respect to, the compensation of our chief executive officer;
	•	overseeing the evaluation of performance of our senior executives;
	•	overseeing and administering, and making recommendations to our board of directors with respect to, our cash and equity incentive plans; and
	•	reviewing and making recommendations to the board of directors with respect to director compensation.

	Nominating and Corporate Governance Committee

	•	recommending to our board of directors the persons to be nominated for election as directors and to each of the board of director’s committees;
	•	overseeing an annual evaluation of management succession planning;
	•	developing and recommending to our board of directors corporate governance principles; and
	•	overseeing a periodic self-evaluation of our board of directors.

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															Long-Term
															Compensation
							Annual Compensation								Shares
															Underlying				All Other
Name and Principal Position			Year				Salary				Bonus				Options (#)				Compensation
Stuart W. Peltz, Ph.D.				2005			$	346,500			$	83,716	(1)			711,720	(2)		$	—
	President, Chief Executive Officer
	and Director
William D. Ju, M.D.				2005			$	277,160			$	50,107	(3)			84,814	(4)		$	—
	Chief Operating Officer
Langdon Miller, M.D.				2005			$	331,800			$	80,327	(5)			131,040	(6)		$	50,890	(7)
	Chief Medical Officer
John Babiak, Ph.D.				2005			$	240,240			$	43,304	(8)			95,090	(9)		$	—
	Senior Vice President, Drug Discovery Technologies
Mark E. Boulding				2005			$	250,120			$	45,084	(10)			97,290	(11)		$	—
	Senior Vice President and
	General Counsel

	(1)	Includes $42,099 that was paid in March 2006 as part of Dr. Peltz’s 2005 bonus.
	(2)	Includes options to purchase 16,410 shares of common stock granted in March 2006 as part of Dr. Peltz’s 2005 bonus.
	(3)	Includes $24,944 that was paid in March 2006 as part of Dr. Ju’s 2005 bonus.
	(4)	Includes options to purchase 12,150 shares of common stock granted in March 2006 as part of Dr. Ju’s 2005 bonus.
	(5)	Includes $40,313 that was paid in March 2006 as part of Dr. Miller’s 2005 bonus.
	(6)	Includes options to purchase 16,410 shares of common stock granted in March 2006 as part of Dr. Miller’s 2005 bonus.
	(7)	Represents the principal amount of and applicable interest on a loan made by us to Dr. Miller which was forgiven in 2005.
	(8)	Includes $21,621 that was paid in March 2006 as part of Dr. Babiak’s 2005 bonus.
	(9)	Includes options to purchase 12,150 shares of common stock granted in March 2006 as part of Dr. Babiak’s 2005 bonus.

(10)	Includes $22,510 that was paid in March 2006 as part of Mr. Boulding’s 2005 bonus.
(11)	Includes options to purchase 12,150 shares of common stock granted in March 2006 as part of Mr. Boulding’s 2005 bonus.

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																		Potential Realizable
																		Value
																		of Assumed
						Percentage												Annual Rates of
		Number of				of Total												Stock Price
		Securities				Options				Exercise								Appreciation
		Underlying				Granted to				Price								for Option Term(1)
		Options				Employees in				Per				Expiration
Name		Granted (#)				Fiscal Year				Share				Date				5% ($)				10% ($)
Stuart W. Peltz, Ph.D.			17,320				1	%		$	1.89				5/24/2015
			677,990				32				1.89				11/5/2014
William D. Ju, M.D.			12,830				1				1.89				5/24/2015
			4				*				1.89				6/14/2014
			59,830				3				1.89				11/5/2014
Langdon Miller, M.D.			17,320				1				1.89				5/24/2015
			97,310				5				1.89				11/5/2014
John Babiak, Ph.D.			12,830				1				1.89				5/24/2015
			70,110				3				1.89				11/5/2014
Mark E. Boulding			12,830				1				1.89				5/24/2015
			72,310				3				1.89				11/5/2014

*	Less than one percent.
(1)	The dollar amounts under these columns are the result of calculations at rates set by the Securities and Exchange Commission and, therefore, are not intended to forecast possible future appreciation, if any, in the price of the underlying common stock. The potential realizable values are calculated using the assumed initial public offering price of $           per share and assuming that the market price appreciates from this price at the indicated rate for the entire term of each option and that each option is exercised and sold on the last day of its term at the assumed appreciated price.

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										Number of Securities
										Underlying								Value of Unexercised
										Unexercised Options at								In-the-Money Options at
		Shares								December 31, 2005								December 31, 2005
		Acquired on				Value
Name		Exercise (#)				Realized				Exercisable				Unexercisable				Exercisable				Unexercisable
Stuart W. Peltz, Ph.D.			—			$	—				592,756				102,571
William D. Ju, M.D.			—				—				34,338				38,327
Langdon Miller, M.D.			—				—				55,773				58,862
John Babiak, Ph.D.			—				—				47,122				35,822
Mark E. Boulding			—				—				48,661				36,483

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	1998 Employee, Director and Consultant Stock Option Plan

	•	provide that the outstanding options under the 1998 stock option plan be assumed or substituted by the successor corporation;
	•	upon written notice to optionees, provide that all unexercised options will terminate, unless exercised, immediately prior to the consummation of such transaction; or
	•	provide that all or any of our outstanding options will terminate in exchange for a cash payment equal to their value.

	2006 Equity and Long Term Incentive Plan

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	•	the number of shares of common stock covered by options and the dates upon which the options become exercisable;
	•	the exercise price of options; provided, however, that the exercise price shall not be less than 100% of fair market value of the stock on the date of grant;
	•	the duration of options, provided that no option shall have a term in excess of 10 years;
	•	the method of payment of the exercise price; and
	•	the number of shares of common stock subject to any restricted stock or other stock-based awards and the terms and conditions of such awards, including conditions for repurchase, issue price and repurchase price.

	2006 Employee Stock Purchase Plan

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	•	whose customary employment is more than 20 hours per week for more than five months in a calendar year;
	•	who were employed by us for at least 90 days prior to enrolling, other than in connection with the initial plan period; and
	•	who are employed on the first day of a designated payroll deduction offering period

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	•	for any breach of their duty of loyalty to us or our stockholders;
	•	for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
	•	for voting or assenting to unlawful payments of dividends or other distributions; or
	•	for any transaction from which the director derived an improper personal benefit.

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		Number of Shares of				Number of Shares of
Name		Series E Preferred Stock				Series E-2 Preferred Stock
Entities affiliated with Credit Suisse(1)			35,699,539				890,854
HBM BioVentures (Cayman) Ltd.(2)			18,315,568				824,187
Vulcan Capital Venture Holdings Inc.(3)			16,708,349				330,650
Entities affiliated with Delphi Ventures(4)			13,493,914				275,482
Entities affiliated with Bay City Capital(5)			10,059,249				206,610
Novo A/S(6)			5,532,586				275,482
Total			99,806,205				2,803,265

(1)	Includes 27,879,539 shares of Series E convertible preferred stock and 695,712 shares of Series E-2 convertible preferred stock issued to Credit Suisse First Boston Equity Partners, L.P.; 7,793,048 shares of Series E convertible preferred stock and 194,469 shares of Series E-2 convertible preferred stock issued to Credit Suisse First Boston Equity Partners (Bermuda), L.P.; and 26,952 shares of Series E convertible preferred stock and 673 shares of Series E-2 convertible preferred stock issued to Credit Suisse First Boston U.S. Executive Advisors, L.P. Mr. Schmertzler, one of our directors, is a Managing Director of Aries Advisors, LLC, an affiliate of Credit Suisse.
(2)	Mr. Bolte, one of our directors, is an employee of HBM Partners AG. HBM Partners AG acts as an investment advisor to HBM BioVentures (Cayman) Ltd. HBM Partners (Cayman) Ltd. provides investment management services to HBM BioVentures (Cayman) Ltd. Neither HBM Partners AG nor Mr. Bolte have voting or investment power over the shares held by HBM BioVentures (Cayman) Ltd.
(3)	Mr. Kranda, one of our directors, is director of biotechnology venture investments at Vulcan Inc.
(4)	Includes 13,349,165 shares of Series E convertible preferred stock and 272,527 shares of Series E-2 convertible preferred stock issued to Delphi Ventures V, L.P.; and 144,749 shares of Series E convertible preferred stock and 2,955 shares of Series E-2 convertible preferred stock issued to Delphi BioInvestments V, L.P.
(5)	Includes 9,637,670 shares of Series E convertible preferred stock and 197,952 shares of Series E-2 convertible preferred stock issued to The Bay City Capital Fund III, L.P.; and 421,579 shares of Series E convertible preferred stock and 8,658 shares of Series E-2 convertible preferred stock issued to The Bay

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	City Capital Fund III Co-Investment Fund, L.P. Dr. Goldfischer, one of our directors, is a Managing Director of Bay City Capital LLC.
(6)	Dr. Carlsen, one of our directors, is managing partner of Novo Ventures, an affiliate of Novo A/S.

	Registration Rights

	Loan to Executive Officer

	Director Compensation

	Executive Compensation and Employment Agreements

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	•	each of our directors;
	•	each of our named executive officers;
	•	each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock; and
	•	all of our directors and executive officers as a group.

Percentage of

Shares

Beneficially Owned

Number of Shares

Before

After

Name and Address of Beneficial Owner

Beneficially Owned

Offering

Offering

5% Stockholders

Entities affiliated with Credit Suisse(1)

3,435,467

25.4

%

Eleven Madison Avenue, 16th Floor

New York, NY 10010

HBM BioVentures (Cayman) Ltd.(2)

2,017,840

14.9

Centennial Towers, 3rd Floor

2454 West Bay Road

Grand Cayman, Cayman Islands

Entities affiliated with Vulcan Capital Venture Holdings Inc.(3)

1,904,527

14.1

505 Fifth Avenue South, Suite 900

Seattle, WA 98104

Entities affiliated with Delphi Ventures(4)

1,169,330

8.7

3000 Sand Hill Road, Building 1, Suite 135,

Menlo Park, CA 94025

Entities affiliated with the Bay City Capital Fund(5)

995,669

7.4

750 Battery Street, Suite 400

San Francisco, CA 94111

Novo A/S(6)

697,559

5.2

Krogshoejvej 41

2880 Bagsvaerd, Denmark

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Percentage of

Shares

Beneficially Owned

Number of Shares

Before

After

Name and Address of Beneficial Owner

Beneficially Owned

Offering

Offering

Executive Officers and Directors

Stuart W. Peltz, Ph.D.(7)

629,649

4.5

William D. Ju, M.D.(8)

48,956

*

Langdon Miller, M.D.(9)

77,968

*

John Babiak, Ph.D.(10)

61,095

*

Mark E. Boulding(11)

62,855

*

Michael Schmertzler(12)

2,751

*

Harvey Berger, M.D.(13)

460

*

Axel Bolte(14)

—

—

Søren Carlsen, Ph.D.(15)

1

*

Carl Goldfischer, M.D.(16)

1

*

Allan Jacobson, Ph.D.(17)

156,118

1.1

Michael Kranda

—

—

David P. Southwell

2,500

*

All directors and executive officers as a group (14 persons)(18)

1,089,351

7.5

	*	Less than one percent.

	(1)	Consists of 2,662,259 shares held by Credit Suisse First Boston Equity Partners, L.P.; 744,169 shares held by Credit Suisse First Boston Equity Partners (Bermuda), L.P.; 2,573 shares held by Credit Suisse First Boston U.S. Executive Advisors, L.P.; 24,800 shares held by EMA Private Equity Fund 1999, L.P.; and 1,666 shares held by Credit Suisse First Boston Finders & Screeners, L.P. Mr. Schmertzler, a member of our board of directors, is a Managing Director of Aries Advisors, LLC, the sub-advisor to Credit Suisse First Boston Equity Partners, L.P., who disclaims beneficial ownership of the shares held by entities affiliated with Credit Suisse except to the extent of any pecuniary interest therein.
	(2)	Consists of 2,017,840 shares held by HBM BioVentures (Cayman) Ltd. The board of directors of HBM BioVentures (Cayman) Ltd. has sole voting and investment power with respect to the shares by held by such entity and acts by majority vote. The board of directors of HBM BioVentures (Cayman) Ltd. is comprised of John Arnold, Colin Shaw, Richard Coles, Dr. Andreas Wicki and John Urquhart, none of whom has individual voting or investment power with respect to such shares and each disclaims beneficial ownership of the shares held by HBM except to the extent of any pecuniary interest therein. Mr. Bolte, a member of our board of directors, is an employee of HBM Partners AG. HBM Partners AG acts as an investment advisor to HBM Partners (Cayman) Ltd. HBM Partners (Cayman) Ltd. provides investment management services to HBM BioVentures (Cayman) Ltd. Neither HBM Partners AG nor Mr. Bolte have voting or investment power over the shares held by HBM BioVentures (Cayman) Ltd.
	(3)	Consists of 330,650 shares held by Vulcan Capital Venture Holdings Inc. and 1,573,877 shares held by Vulcan Ventures Inc. Mr. Kranda, a member of our board of directors, is a Managing Director of Vulcan Inc. and is responsible for its biotech venture investments. Vulcan Capital Venture Holdings Inc. and Vulcan Ventures Inc. are wholly-owned by the sole stockholder of Vulcan Inc.
	(4)	Consists of 1,156,787 shares held by Delphi Ventures V, L.P. and 12,543 shares held by Delphi BioInvestments V, L.P.
	(5)	Consists of 953,944 shares held by The Bay City Capital Fund III, L.P. and 41,725 shares held by The Bay City Capital Fund III Co-Investment Fund, L.P. Dr. Goldfischer, a member of our board of directors, is a Managing Director of Bay City Capital LLC, and serves on Bay City Capital’s board of managers and investment committee. Bay City Capital LLC is the manager of the general partner of the above mentioned funds. Dr. Goldfischer disclaims beneficial ownership of the shares held by Bay City except to the extent of any pecuniary interest therein.

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	(6)	Novo A/S is a Danish private limited liability company fully owned by the Novo Nordisk Foundation. Dr. Carlsen, a member of our board of directors and is Managing Partner of Novo A/ S. Dr. Carlsen disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest arising as a result of his engagement with Novo A/ S.
	(7)	Consists of 629,621 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006 and 28 shares of common stock.
	(8)	Consists of 48,956 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006.
	(9)	Consists of 77,968 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006.

(10)	Consists of 61,095 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006.
(11)	Consists of 62,855 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006.
(12)	Consists of 2,751 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006. Mr. Schmertzler disclaims beneficial ownership of the shares held by Credit Suisse First Boston except to the extent of his pecuniary interest therein. See footnote 1.
(13)	Consists of 460 shares issuable upon exercise of stock options exercisable within 60 days of April 30, 2006.
(14)	Mr. Bolte disclaims beneficial ownership of the shares held by HBM BioVentures (Cayman) Ltd. except to the extent of his pecuniary interest therein. See footnote 2.
(15)	Dr. Carlsen disclaims beneficial ownership of the shares held by Novo A/S except to the extent of his pecuniary interest therein. See footnote 6.
(16)	Dr. Goldfischer disclaims beneficial ownership of the shares held by the Bay City Capital Fund except to the extent of his pecuniary interest therein. See footnote 5.
(17)	Consists of 156,090 shares issuable upon the exercise of stock options exercisable within 60 days of April 30, 2006 and 28 shares of common stock.
(18)	Consists of 1,089,295 shares issuable upon the exercise of stock options exercisable within 60 days of April 30, 2006 and 56 shares of common stock.

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	•	11,889 shares of common stock outstanding held by 14 stockholders of record;
	•	750,000 shares of Series A convertible preferred stock that are convertible into 62,500 shares of common stock;
	•	187,500 shares of Series B convertible preferred stock that are convertible into 25,000 shares of common stock;
	•	6,000,000 shares of Series C convertible preferred stock that are convertible into 833,325 shares of common stock;
	•	13,095,769 shares of Series D convertible preferred stock that are convertible into 2,026,717 shares of common stock;
	•	125,740,607 shares of Series E convertible preferred stock that are convertible into 6,887,042 shares of common stock; and
	•	3,670,138 shares of Series E-2 convertible preferred stock that are convertible into 3,670,138 shares of common stock.

	•	options to purchase 2,340,442 shares of common stock at a weighted average exercise price of $2.40 per share;
	•	a warrant to purchase 77,380 shares of common stock at an exercise price of $21.00 per share;
	•	a warrant to purchase 295,000 shares of Series C preferred stock at an exercise price of $2.50 per share;
	•	warrants to purchase an aggregate of 674,166 shares of Series D preferred stock at an exercise price of $3.25 per share; and
	•	warrants to purchase an aggregate of 994,415 shares of Series E preferred stock at an exercise price of $0.397644 per share.

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91

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	Delaware Law

	Staggered Board

	Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations

	Super-Majority Voting

92

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	Demand and Form S-3 Registration Rights

	Incidental Registration Rights

	Limitations and Expenses

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	•	1% of the number of shares of our common stock then outstanding, which will equal approximately                      shares immediately after this offering, and
	•	the average weekly trading volume in our common stock on The Nasdaq National Market during the four calendar weeks preceding the date of filing of a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale.

	•	the person is not our affiliate and has not been our affiliate at any time during the three months preceding the sale; and
	•	the person has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than our affiliates.

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			Number of
Name			Shares
Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
Pacific Growth Equities, LLC
	Total

		No				Full
		Exercise				Exercise
Per share		$				$
Total		$				$

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	•	offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for our common stock; or
	•	enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock;

	•	during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to our company occurs; or
	•	prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period,

	•	the sale of shares to the underwriters;
	•	the issuance by us of shares of common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing;
	•	the grant of options or the issuance of shares of common stock by us pursuant to our equity plans described in this prospectus, provided that the recipient of the options or shares agrees to be subject to the restrictions described above;
	•	the issuance by us of shares of common stock in connection with strategic transactions, such as collaboration or license agreements, provided that the recipient of the shares agrees to be subject to the restrictions described above;
	•	transactions by any person other than us relating to shares of common stock or other securities acquired in open market transactions after the closing of the offering of the shares;
	•	transfers by any person other than us of shares of common stock or other securities as a bona fide gift; or
	•	distributions other than by us of shares of common stock or other securities to limited partners or stockholders;

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		Page
Report of Independent Registered Public Accounting Firm			F-2
Balance Sheets, December 31, 2004 and 2005, March 31, 2006 (unaudited) and Pro Forma March 31, 2006 (unaudited)			F-4
Statements of Operations, Years ended December 31, 2003, 2004, and 2005, Period from March 31, 1998 (inception) to December 31, 2005 and Three Months Ended March 31, 2005 and 2006 (unaudited)			F-5
Statements of Stockholders’ Equity (Deficit) and Comprehensive Loss, Period from March 31, 1998 (inception) to March 31, 2006			F-6
Statements of Cash Flows, Years ended December 31, 2003, 2004, and 2005, Period from March 31, 1998 (inception) to December 31, 2005 and Three Months Ended March 31, 2005 and 2006 (unaudited)			F-8
Notes to Financial Statements			F-9

F-1

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F-2

---

Table of Contents

F-3

---

Table of Contents

					December 31,												Pro Forma
													March 31,				March 31,
					2004				2005				2006				2006
													(unaudited)				(unaudited)
																	(see note 2(u))
ASSETS
Current assets:
	Cash and cash equivalents				$	6,777,339			$	10,964,552			$	20,864,831			$	20,864,831
	Short-term investments					26,209,351				26,875,682				20,300,770				20,300,770
	Prepaid expenses and other current assets					721,941				1,136,755				1,927,439				1,927,439
			Total current assets			33,708,631				38,976,989				43,093,040				43,093,040
Fixed assets, net						5,205,361				4,701,786				4,763,992				4,763,992
Long-term investments						—				—				498,246				498,246
Deposits and other assets						54,049				295,704				49,871				49,871
			Total assets		$	38,968,041			$	43,974,479			$	48,405,149			$	48,405,149
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	1,703,026			$	1,183,261			$	749,099			$	749,099
	Accrued expenses					1,500,875				2,710,366				3,330,715				3,330,715
	Current portion of long-term debt					924,516				477,808				494,020				494,020
	Deferred revenue — short-term					—				275,000				4,200,000				4,200,000
			Total current liabilities			4,128,417				4,646,435				8,773,834				8,773,834
Deferred rent						21,441				122,653				119,125				119,125
Deferred revenue — long-term						—				—				7,833,333				7,833,333
Long-term debt						204,975				804,473				634,275				634,275
			Total liabilities			4,354,833				5,573,561				17,360,567				17,360,567
Commitments and contingencies (note 10)
Stockholders’ equity:
	Preferred stock, $0.001 par value, authorized 153,407,582 shares;
		Series A convertible preferred stock, designated 750,000 shares; issued and outstanding 750,000 shares actual (liquidation preference of $750,000); no shares issued and outstanding pro forma				750,000				750,000				750,000				—
		Series B convertible preferred stock, designated 187,500 shares; issued and outstanding 187,500 shares actual (liquidation preference of $375,000); no shares issued and outstanding pro forma				364,524				364,524				364,524				—
		Series C convertible preferred stock, designated 6,295,000 shares; issued and outstanding 6,000,000 shares actual (liquidation preference of $15,000,000); no shares issued and outstanding pro forma				14,117,089				14,117,089				14,117,089				—
		Series D convertible preferred stock, designated 13,800,000 shares; issued and outstanding 13,095,769 shares actual (liquidation preference of $42,561,249); no shares issued and outstanding pro forma				39,282,460				39,282,460				39,282,460				—
		Series E convertible preferred stock, designated 128,242,850 shares; issued and outstanding 125,740,607 shares actual (liquidation preference of $49,999,998); no shares issued and outstanding pro forma				49,048,047				49,048,047				49,048,047				—
		Series E-2 convertible preferred stock, designated 4,132,232 shares; issued and outstanding 3,670,138 shares actual (liquidation preference of $26,645,187); no shares issued and outstanding pro forma				—				26,510,745				26,509,451				—
	Common stock, $0.001 par value; authorized 18,228,538 shares; issued and outstanding 68 shares at December 31, 2004, 6,943 shares at December 31, 2005, 11,889 shares at March 31, 2006 (unaudited) and 13,516,611 shares issued and outstanding pro forma (unaudited)					—				7				12				13,517
	Additional paid-in capital					353,131				506,364				531,961				130,590,027
	Accumulated other comprehensive loss					(65,429	)			(33,972	)			(34,024	)			(34,024	)
	Deficit accumulated during the development stage					(69,236,614	)			(92,144,346	)			(99,524,938	)			(99,524,938	)
			Total stockholders’ equity			34,613,208				38,400,918				31,044,582				31,044,582
			Total liabilities and stockholders’ equity		$	38,968,041			$	43,974,479			$	48,405,149			$	48,405,149

F-4

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																Period from
																March 31,
																1998				Three Months Ended
				Year Ended December 31,												(inception) to				March 31,
																December 31,
				2003				2004				2005				2005				2005				2006
																				(unaudited)				(unaudited)
Revenues:
	Collaboration revenue			$	—			$	—			$	50,000			$	50,000			$	—			$	551,945
	Grant revenue				756,101				1,606,076				4,916,779				7,618,956				1,156,664				1,011,275
		Total revenues			756,101				1,606,076				4,966,779				7,668,956				1,156,664				1,563,220
Operating expenses:
	Research and development				17,694,414				20,070,231				21,122,934				76,970,532				6,823,404				6,529,466
	General and administrative				4,693,240				6,022,740				7,943,584				27,230,732				1,898,476				2,744,765
		Total operating expenses			22,387,654				26,092,971				29,066,518				104,201,264				8,721,880				9,274,231
		Loss from operations			(21,631,553	)			(24,486,895	)			(24,099,739	)			(96,532,308	)			(7,565,216	)			(7,711,011	)
Interest income					316,827				578,732				853,817				3,997,886				162,475				371,560
Interest expense					(358,022	)			(184,145	)			(140,647	)			(1,006,919	)			(29,286	)			(41,141	)
		Loss before tax benefit			(21,672,748	)			(24,092,308	)			(23,386,569	)			(93,541,341	)			(7,432,027	)			(7,380,592	)
Tax benefit					235,142				450,781				478,837				1,396,995				—				—
		Net loss allocable to common stockholders		$	(21,437,606	)		$	(23,641,527	)		$	(22,907,732	)		$	(92,144,346	)		$	(7,432,027	)		$	(7,380,592	)
Basic and diluted net loss per share allocable to common stockholders				$	(315,259	)		$	(347,670	)		$	(9,925	)						$	(8,602	)		$	(843	)
Shares used to compute basic and diluted net loss per share allocable to common stockholders					68				68				2,308								864				8,752
Pro forma basic and diluted net loss per common share (note 2(t)) (unaudited)												$	(2.11	)										$	(0.55	)
Shares used to compute pro forma basic and diluted net loss per common share (note 2(t)) (unaudited)													10,831,634												13,513,474

F-5

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				Series A Convertible								Series B Convertible								Series C Convertible								Series D Convertible								Series E Convertible
				Preferred Stock								Preferred Stock								Preferred Stock								Preferred Stock								Preferred Stock
				Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount
Initial capitalization, March 31, 1998					—			$	—				—			$	—				—			$	—				—			$	—				—			$	—
Issuance of common stock					—				—				—				—				—				—				—				—				—				—
Sale of Series A convertible preferred stock					750,000				750,000				—				—				—				—				—				—				—				—
Deferred compensation					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 1998					750,000				750,000				—				—				—				—				—				—				—				—
Deferred compensation					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 1999					750,000				750,000				—				—				—				—				—				—				—				—
Sales of Series B convertible preferred stock, net of issuance costs of $10,476					—				—				187,500				364,524				—				—				—				—				—				—
Sales of Series C convertible preferred stock, net of issuance costs of $882,911					—				—				—				—				6,000,000				14,117,089				—				—				—				—
Issuance of common stock					—				—				—				—				—				—				—				—				—				—
Deferred compensation					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized gain on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2000					750,000				750,000				187,500				364,524				6,000,000				14,117,089				—				—				—				—
Sales of Series D convertible preferred stock, net of issuance costs of $2,286,789					—				—				—				—				—				—				12,295,769				37,674,460				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized loss on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2001					750,000				750,000				187,500				364,524				6,000,000				14,117,089				12,295,769				37,674,460				—				—
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 2002					750,000				750,000				187,500				364,524				6,000,000				14,117,089				12,295,769				37,674,460				—				—
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Issuance of options to consultants					—				—				—				—				—				—				—				—				—				—
Issuance of Series D convertible preferred stock in connection with the termination of collaboration agreement					—				—				—				—				—				—				800,000				1,608,000				—				—
Sales of Series E convertible preferred stock, net of issuance costs of $803,782					—				—				—				—				—				—				—				—				88,018,430				34,196,218
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 2003					750,000				750,000				187,500				364,524				6,000,000				14,117,089				13,095,769				39,282,460				88,018,430				34,196,218
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Warrants issued for in-process research and development					—				—				—				—				—				—				—				—				—				—
Sales of Series E convertible preferred stock, net of issuance costs of $148,169					—				—				—				—				—				—				—				—				37,722,177				14,851,829
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized loss on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2004					750,000				750,000				187,500				364,524				6,000,000				14,117,089				13,095,769				39,282,460				125,740,607				49,048,047
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Warrants issued for in-process research and development					—				—				—				—				—				—				—				—				—				—
Sales of Series E-2 convertible preferred stock, net of issuance costs of $134,441					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized gain on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2005					750,000				750,000				187,500				364,524				6,000,000				14,117,089				13,095,769				39,282,460				125,740,607				49,048,047
Exercise of stock options (unaudited)					—				—				—				—				—				—				—				—				—				—
Series E-2 convertible preferred stock issuance costs (unaudited)					—				—				—				—				—				—				—				—				—				—
Stock-based compensation expense (unaudited)					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss (unaudited)				—				—				—				—				—				—				—				—				—				—
	Unrealized loss on investments (unaudited)				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss (unaudited)
Balance, March 31, 2006 (unaudited)					750,000			$	750,000				187,500			$	364,524				6,000,000			$	14,117,089				13,095,769			$	39,282,460				125,740,607			$	49,048,047

F-6

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Table of Contents

												Common Stock																Accumulated				Deficit
				Series E-2 Convertible																								Other				Accumulated				Total
				Preferred Stock																Additional								Comprehensive				During the				Stockholders’
																$0.001 Par				Paid-in				Deferred				Income				Development-				Equity
				Shares				Amount				Shares				Value				Capital				Compensation				(Loss)				Stage				(Deficit)
Initial capitalization, March 31, 1998					—			$	—				59			$	—			$	1,000			$	—			$	—			$	—			$	1,000
Issuance of common stock					—				—				2				—				42				—				—				—				42
Sale of Series A convertible preferred stock					—				—				—				—				—				—				—				—				750,000
Deferred compensation					—				—				—				—				197				(197	)			—				—				—
Amortization of deferred compensation					—				—				—				—				—				49				—				—				49
Net loss and comprehensive loss					—				—				—				—				—				—				—				(322,338	)			(322,338	)
Balance, December 31, 1998					—				—				61				—				1,239				(148	)			—				(322,338	)			428,753
Deferred compensation					—				—				—				—				197				(197	)			—				—				—
Amortization of deferred compensation					—				—				—				—				—				86				—				—				86
Net loss and comprehensive loss					—				—				—				—				—				—				—				(671,055	)			(671,055	)
Balance, December 31, 1999					—				—				61				—				1,436				(259	)			—				(993,393	)			(242,216	)
Sales of Series B convertible preferred stock, net of issuance costs of $10,476					—				—				—				—				—				—				—				—				364,524
Sales of Series C convertible preferred stock, net of issuance costs of $882,911					—				—				—				—				—				—				—				—				14,117,089
Issuance of common stock					—				—				1				—				7,812				—				—				—				7,812
Deferred compensation					—				—				—				—				98,381				(98,381	)			—				—				—
Amortization of deferred compensation					—				—				—				—				—				64,279				—				—				64,279
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(1,459,060	)			(1,459,060	)
	Unrealized gain on investments				—				—				—				—				—				—				10,313				—				10,313
		Total comprehensive loss																																			(1,448,747	)
Balance, December 31, 2000					—				—				62				—				107,629				(34,361	)			10,313				(2,452,453	)			12,862,741
Sales of Series D convertible preferred stock, net of issuance costs of $2,286,789					—				—				—				—				—				—				—				—				37,674,460
Amortization of deferred compensation					—				—				—				—				—				26,466				—				—				26,466
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(8,213,604	)			(8,213,604	)
	Unrealized loss on investments				—				—				—				—				—				—				(10,313	)			—				(10,313	)
		Total comprehensive loss																																			(8,223,917	)
Balance, December 31, 2001					—				—				62				—				107,629				(7,895	)			—				(10,666,057	)			42,339,750
Exercise of stock options					—				—				6				—				40,000				—				—				—				40,000
Amortization of deferred compensation					—				—				—				—				—				7,895				—				—				7,895
Net loss and comprehensive loss					—				—				—				—				—				—				—				(13,491,424	)			(13,491,424	)
Balance, December 31, 2002					—				—				68				—				147,629				—				—				(24,157,481	)			28,896,221
Exercise of stock options					—				—				—				—				775				—				—				—				775
Issuance of options to consultants					—				—				—				—				10,917				—				—				—				10,917
Issuance of Series D convertible preferred stock in connection with the termination of collaboration agreement					—				—				—				—				—				—				—				—				1,608,000
Sales of Series E convertible preferred stock, net of issuance costs of $803,782					—				—				—				—				—				—				—				—				34,196,218
Net loss and comprehensive loss					—				—				—				—				—				—				—				(21,437,606	)			(21,437,606	)
Balance, December 31, 2003					—				—				68				—				159,321				—				—				(45,595,087	)			43,274,525
Exercise of stock options					—				—				—				—				643				—				—				—				643
Warrants issued for in-process research and development					—				—				—				—				193,167				—				—				—				193,167
Sales of Series E convertible preferred stock, net of issuance costs of $148,169					—				—				—				—				—				—				—				—				14,851,829
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(23,641,527	)			(23,641,527	)
	Unrealized loss on investments				—				—				—				—				—				—				(65,429	)			—				(65,429	)
		Total comprehensive loss																																			(23,706,956	)
Balance, December 31, 2004					—				—				68				—				353,131				—				(65,429	)			(69,236,614	)			34,613,208
Exercise of stock options					—				—				6,875				7				12,986				—				—				—				12,993
Warrants issued for in-process research and development					—				—				—				—				140,247				—				—				—				140,247
Sales of Series E-2 convertible preferred stock, net of issuance costs of $134,441					3,670,138				26,510,745				—				—				—				—				—				—				26,510,745
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(22,907,732	)			(22,907,732	)
	Unrealized gain on investments				—				—				—				—				—				—				31,457				—				31,457
		Total comprehensive loss																																			(22,876,275	)
Balance, December 31, 2005					3,670,138				26,510,745				6,943				7				506,364				—				(33,972	)			(92,144,346	)			38,400,918
Exercise of stock options (unaudited)					—				—				4,946				5				9,343				—				—				—				9,348
Series E-2 convertible preferred stock issuance costs (unaudited)					—				(1,294	)			—				—				—				—				—				—				(1,294	)
Stock-based compensation expense (unaudited)					—				—				—				—				16,254				—				—				—				16,254
Comprehensive loss:
	Net loss (unaudited)				—				—				—				—				—				—				—				(7,380,592	)			(7,380,592	)
	Unrealized loss on investments (unaudited)				—				—				—				—				—				—				(52	)			—				(52	)
		Total comprehensive loss (unaudited)																																			(7,380,644	)
	Balance, March 31, 2006 (unaudited)				3,670,138			$	26,509,451				11,889			$	12			$	531,961			$	—			$	(34,024	)		$	(99,524,938	)		$	31,044,582

F-7

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Table of Contents

																		Period from
																		March 31,
																		1998
																		(inception)				Three Months Ended
						Year Ended December 31,												to				March 31,
																		December 31,
						2003				2004				2005				2005				2005				2006
																						(unaudited)				(unaudited)
Cash flows from operating activities:
	Net loss allocable to common stockholders					$	(21,437,606	)		$	(23,641,527	)		$	(22,907,732	)		$	(92,144,346	)		$	(7,432,027	)		$	(7,380,592	)
	Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
		Depreciation and amortization					1,553,029				1,437,444				1,466,131				6,325,046				367,263				363,063
		In-process research and development charge					1,608,000				193,167				140,247				1,941,414				—				—
		Stock-based compensation expense					10,917				—				—				109,692				—				16,254
		Issuance of common stock for license					—				—				—				7,812				—				—
		Realized gain on investment					—				—				—				(10,314	)			—				—
		Gain on disposal of fixed assets					(2,768	)			—				—				(2,768	)			—				—
		Forgiveness of related-party loan					—				50,000				50,000				100,000				—				50,000
		Changes in operating assets and liabilities:
			Prepaid expenses and other current assets				157,788				(443,388	)			(414,814	)			(1,086,755	)			(69,168	)			(840,684	)
			Deposits and other assets				19,970				(5,617	)			(241,655	)			(295,704	)			844				245,833
			Accounts payable				376,275				565,409				(397,790	)			1,183,261				(121,267	)			(434,162	)
			Accrued expenses				1,513,238				(454,012	)			1,209,491				2,710,366				256,335				620,349
			Deferred rent				(24,185	)			(109,183	)			101,212				122,653				(13,603	)			(3,528	)
			Deferred revenue				—				—				275,000				275,000				—				11,758,333
				Net cash provided by (used in) operating activities			(16,225,342	)			(22,407,707	)			(20,719,910	)			(80,764,643	)			(7,011,623	)			4,394,866
Cash flows from investing activities:
	Purchases of fixed assets						(667,491	)			(1,120,810	)			(962,556	)			(11,039,173	)			(274,382	)			(425,269	)
	Purchases of investments						(11,038,405	)			(51,671,306	)			(34,741,738	)			(177,586,492	)			(1,995,084	)			(3,011,458	)
	Sales of investments						25,374,112				32,623,927				34,106,864				150,687,151				10,259,064				9,088,072
	Issuance of related-party loan						(50,000	)			(50,000	)			(50,000	)			(150,000	)			—				—
				Net cash provided by (used in) investing activities			13,618,216				(20,218,189	)			(1,647,430	)			(38,088,514	)			7,989,598				5,651,345
Cash flows from financing activities:
	Proceeds from long-term debt						—				317,080				1,366,678				7,825,587				1,077,135				—
	Payments on long-term debt						(1,974,286	)			(1,866,128	)			(1,213,888	)			(6,528,196	)			(495,282	)			(153,986	)
	Proceeds from sale of Series A preferred stock						—				—				—				750,000				—				—
	Proceeds from sale of Series B preferred stock, net of issuance costs						—				—				—				364,524				—				—
	Proceeds from sale of Series C preferred stock, net of issuance costs						—				—				—				14,117,089				—				—
	Proceeds from sale of Series D preferred stock, net of issuance costs						—				—				—				37,674,460				—				—
	Proceeds from sale of Series E preferred stock, net of issuance costs						34,196,218				14,851,829				—				49,048,047				—				—
	Proceeds from sale of Series E-2 preferred stock, net of issuance costs						—				—				26,510,745				26,510,745				—				(1,294	)
	Net proceeds from issuance of common stock						775				643				12,993				55,453				—				9,348
	(Payments on) proceeds from short-term borrowings						—				121,975				(121,975	)			—				—				—
				Net cash provided by (used in) financing activities			32,222,707				13,425,399				26,554,553				129,817,709				581,853				(145,932	)
				Net increase (decrease) in cash and cash equivalents			29,615,581				(29,200,497	)			4,187,213				10,964,552				1,559,828				9,900,279
Cash and cash equivalents, beginning of period							6,362,255				35,977,836				6,777,339				—				6,777,339				10,964,552
Cash and cash equivalents, end of period						$	35,977,836			$	6,777,339			$	10,964,552			$	10,964,552			$	8,337,167			$	20,864,831
Supplemental disclosure:
	Cash paid for interest					$	358,022			$	186,434			$	138,770			$	1,007,331			$	57,099			$	30,722
	Unrealized gain (loss) on investments						—				(65,429	)			31,457				(33,972	)			46,994				(52	)
	Issuance of Series D preferred stock for in-process research and development						1,608,000				—				—				1,608,000				—				—
	Issuance of warrants for in-process research and development						—				193,167				140,247				333,414				—				—
	Acquisition of fixed assets through capital leases						—				—				—				15,110				—				—

F-8

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Table of Contents

(1)	The Company

(2)	Summary of Significant Accounting Policies

F-9

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Table of Contents

				December 31, 2004
								Unrealized
																Estimated
				Cost				Gains				Losses				Fair Value
December 31, 2004:
	Commercial paper			$	996,657			$	—			$	(617	)		$	996,040
	U.S. corporate debt securities				23,089,766				—				(64,745	)			23,025,021
	U.S. government debt securities				2,188,357				35				(102	)			2,188,290
		Total investments		$	26,274,780			$	35			$	(65,464	)		$	26,209,351

				December 31, 2005
								Unrealized
																Estimated
				Cost				Gains				Losses				Fair Value
December 31, 2005:
	Commercial paper			$	1,497,124			$	—			$	—			$	1,497,124
	U.S. corporate debt securities				25,412,530				—				(33,972	)			25,378,558
		Total investments		$	26,909,654			$	—			$	(33,972	)		$	26,875,682

				March 31, 2006
								Unrealized
																Estimated
				Cost				Gains				Losses				Fair Value
March 31, 2006:
	U.S. corporate debt securities			$	20,333,040			$	—			$	(32,270	)		$	20,300,770
	U.S. government debt securities				500,000				—				(1,754	)			498,246
		Total investments		$	20,833,040			$	—			$	(34,024	)		$	20,799,016

F-10

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Table of Contents

						More
		Less Than				Than
		12 months				12 months
U.S. corporate debt securities		$	20,300,770			$	—
U.S. government debt securities			—				498,246
Total investments		$	20,300,770			$	498,246

(d)	Depreciation and Amortization

Lab leasehold improvements			7 years
Computer equipment and software			3 years
Furniture, fixtures and lab equipment			3 to 7 years
Leasehold improvements			7 years

(e)	Concentration of Credit Risk

(f)	Deferred Rent

(g)	Revenue Recognition

F-11

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Table of Contents

(h)	Research and Development Costs

(i)	Fair Value of Financial Instruments

(j)	Impairment of Long-Lived Assets

(k)	Stock-Based Compensation

F-12

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Table of Contents

		Three Months
		Ended
		March 31,
		2006
Risk-free interest rate			4.60	%
Expected volatility			80	%
Expected term			6-6.25 years

(l)	Income Taxes

(m)	Recently Issued Accounting Standards

F-13

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Table of Contents

(n)	Segment Information

(o)	Restatement

(p)	Reclassifications

F-14

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Table of Contents

(q)	Advertising Costs

(r)	Patent Costs

(s)	Net Loss per Share

(t)	Pro Forma Net Loss per Share (Unaudited)

							Three Months
			Year Ended				Ended
			December 31,				March 31,
			2005				2006
			(unaudited)
Net loss allocable to common stockholders			$	(22,907,732	)		$	(7,380,592	)
Weighted average shares used in computing basic and diluted net loss per share				2,308				8,752
Basic and diluted net loss per common share			$	(9,925	)		$	(843	)
Pro forma (unaudited):
	Shares used above			2,308				8,752
	Pro forma adjustment to reflect weighted effect of assumed conversion of convertible preferred stock			10,829,326				13,504,722
	Shares used in computing pro forma basic and diluted net loss per common share			10,831,634				13,513,474
	Pro forma basic and diluted net loss per common share (unaudited)		$	(2.11	)		$	(0.55	)

F-15

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Table of Contents

(u)	Pro Forma Balance Sheet (Unaudited)

(v)	Interim Financial Statements

(3)	Collaboration Agreements

(4)	Income Taxes

				2003								2004								2005
				Amount				%				Amount				%				Amount				%
U.S. Federal statutory tax				$	(7,288,786	)			(34.0	)%		$	(8,191,385	)			(34.0	)%		$	(7,951,433	)			(34.0	)%
Add (deduct):
	Sale of state net operating losses				(235,142	)			(1.1	)			(450,781	)			(1.9	)			(478,837	)			(2.0	)
	State tax benefit on deferred taxes				—				—				(2,817,428	)			(11.7	)			(2,895,164	)			(12.4	)
	Federal research and development credits				(782,985	)			(3.7	)			(910,000	)			(3.8	)			(1,119,567	)			(4.8	)
	Change in valuation allowance				8,060,518				37.6				11,903,786				49.4				11,927,854				51.0
	Other net				11,253				0.1				15,027				0.1				38,310				0.2
		Tax benefit		$	(235,142	)			(1.1	)%		$	(450,781	)			(1.9	)%		$	(478,837	)			(2.0	)%

F-16

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Table of Contents

				2004				2005
Deferred tax assets
	Amortization			$	197,739			$	185,447
	Accruals				86,416				186,250
	Federal tax credits				2,592,037				3,711,604
	State tax credits				1,959,903				2,825,245
	Federal net operating losses				15,399,753				18,178,386
	State net operating losses				3,874,728				4,554,412
	Capitalized research and development costs				9,541,084				15,625,393
	Other				125,317				217,901
					33,776,977				45,484,638
	Valuation allowance				(33,522,215	)			(45,450,069	)
		Total assets			254,762				34,569
Deferred tax liabilities:
	Depreciation				(254,762	)			(34,569	)
		Total liabilities			(254,762	)			(34,569	)
		Net deferred tax asset		$	—			$	—

F-17

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Table of Contents

(5)	Fixed Assets, Net

		December 31,
										March 31,
		2004				2005				2006
Lab leasehold improvements		$	1,763,281			$	1,763,281			$	1,763,281
Computer equipment and software			1,629,726				1,766,827				2,069,288
Furniture and fixtures and lab equipment			5,603,508				6,190,666				6,340,447
Leasehold improvements			802,785				1,011,723				1,218,612
Construction in progress			249,733				279,092				45,230
			10,049,033				11,011,589				11,436,858
Less accumulated depreciation			(4,843,672	)			(6,309,803	)			(6,672,866	)
		$	5,205,361			$	4,701,786			$	4,763,992

(6)	Accrued Expenses

		December 31,
										March 31,
		2004				2005				2006
Employee compensation, benefits, and related accruals		$	832,070			$	1,113,030			$	778,379
Consulting and contracted research			390,299				710,028				1,033,507
Professional fees			175,727				607,387				1,227,830
Other			102,779				279,921				290,999
		$	1,500,875			$	2,710,366			$	3,330,715

(7)	Long-Term Debt

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2006		$	477,808
2007			512,712
2008			261,122
2009			30,639
		$	1,282,281

(8)	Stockholders’ Equity

F-19

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(d)	Warrants

F-20

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(9)	Stock Option Plan

F-21

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											Weighted
											Average				Aggregate
			Number of				Exercise				Exercise				Intrinsic
			Shares				Price				Price				Value
Outstanding at March 31, 1998 (inception)				—			$	—			$	—
	Granted			88				3,000-9,900				8,225.00
	Exercised			(7	)			6,000-7,500				6,005.00
	Forfeited			(12	)			6,000-9,900				6,809.00
Outstanding at December 31, 2002				69				3,000-9,900				8,692.00
	Granted			25				9,900				9,900.00
	Exercised			—				—				—
	Forfeited			(1	)			9,900				9,900.00
Outstanding at December 31, 2003				93				3,000-9,900				9,010.25
	Granted			—				—				—
	Exercised			—				—				—
	Forfeited			—				—				—
Outstanding at December 31, 2004				93				3,000-9,900				9,010.25
	Granted			2,106,803				1.89				1.89
	Exercised			(6,875	)			1.89				1.89
	Forfeited			(35,063	)			1.89-9,900				3.04
Outstanding at December 31, 2005				2,064,958				1.89-9,900				2.28
	Granted			282,095				3.27				3.27
	Exercised			(4,946	)			1.89				1.89
	Forfeited			(1,392	)			1.89-9,900				2.46
Outstanding March 31, 2006				2,340,715				1.89-9,900				2.40			$	4,314,637
Exercisable and expected to vest at March 31, 2006				2,247,571				1.89-9,900				2.40			$	4,196,132
Exercisable at March 31, 2006				1,533,754				1.89-9,900				2.38			$	3,166,262

										Weighted
						Weighted				Average								Weighted
		Number of				Average				Remaining				Number of				Average
Exercise		Options				Exercise				Contractual				Options				Exercise
Price Range		Outstanding				Price				Life in Years				Exercisable				Price
$3,000-9,900			89			$	8,145.65				6.21				81			$	8,910.14
1.89			2,064,869				1.89				8.91				1,379,078				1.89
			2,064,958												1,379,159

F-22

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																						Weighted
										Weighted												Average
						Weighted				Average								Weighted				Remaining
		Number of				Average				Remaining				Number of				Average				Contractual
Exercise		Options				Exercise				Contractual				Options				Exercise				Life in
Price Range		Outstanding				Price				Life in Years				Exercisable				Price				Years
$3,000-9,900			89			$	8,996.29				5.90				84			$	8,936.88				5.90
3.27			282,095				3.27				9.92				3,772				3.27				9.92
1.89			2,058,531				1.89				8.67				1,529,898				1.89				8.63
			2,340,715												1,533,754

(10)	Commitments and Contingencies

F-23

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	(b) University of Medicine and Dentistry of New Jersey Research, Option and License Agreement

(c)	Consulting Agreements

(d)	Operating Leases

2006		$	383,688
2007			393,763
2008			391,302
2009			169,688
		$	1,338,441

	(e) Related-Party Transactions

F-24

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	(f) 401(k) Plans

F-25

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Item 13.	Other Expenses of Issuance and Distribution

			Amount
Securities and Exchange Commission registration fee			$	9,229
National Association of Securities Dealers Inc. fee				9,125
Nasdaq Stock Market listing fee				*
Accountants’ fees and expenses				*
Legal fees and expenses				*
Blue Sky fees and expenses				*
Transfer Agent’s fees and expenses				*
Printing and engraving expenses				*
Miscellaneous				*
	Total expenses		$	*

*	To be filed by amendment.

Item 14.	Indemnification of Directors and Officers

II-1

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Item 15.	Recent Sales of Unregistered Securities

II-2

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	(a) Issuances of Securities

	1.     In December 2003 and in April and June 2004, the Registrant issued an aggregate of 125,740,607 shares of Series E convertible preferred stock at a price of $.397644 per share, together with warrants to purchase an aggregate of 994,415 shares of Series E convertible preferred stock with an exercise price of $.397644 per share to institutional investors, including Credit Suisse Entities, HBM BioVentures (Cayman) Ltd., Vulcan Capital Venture Holdings Inc., Delphi Ventures Entities, Bay City Capital Entities, Novo A/ S and Three Crowns Capital (Bermuda) Ltd., for aggregate cash proceeds of approximately $50.0 million.
	2.     In September and October 2005, the Registrant issued an aggregate of 3,670,138 shares of Series E-2 convertible preferred stock at a price of $7.26 per share to institutional investors, including Credit Suisse Entities, HBM BioVentures (Cayman) Ltd., Vulcan Capital Venture Holdings Inc., Delphi Ventures Entities, Bay City Capital Entities and Novo A/ S, for aggregate cash proceeds of approximately $26.6 million.
	3.     In the first quarter of 2004, we issued to General Electric Capital Corporation a warrant to purchase 59,378 shares of our series D convertible preferred stock in exchange for the cancellation of a previously issued warrant to purchase shares of our common stock.

	(b) Stock Option Grants

II-3

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Item 16.	Exhibits and Financial Statement Schedules

	(a) Exhibits

Exhibit
Number				Description
	1	.1*		Form of Underwriting Agreement.
	3	.1**		Restated Certificate of Incorporation of the Registrant.
	3	.2*		Form of Restated Certificate of Incorporation of the Registrant to be effective upon closing of the offering.
	3	.3**		Amended and Restated Bylaws of the Registrant.
	3	.4*		Form of Amended and Restated Bylaws of the Registrant to be effective upon the closing of the offering.
	4	.1*		Specimen Stock Certificate evidencing shares of common stock.
	4	.2**		Fifth Amended and Restated Investor Rights Agreement, dated as of September 21, 2005, by and among the Registrant and the other parties named therein.
	4	.3**		Warrant to Purchase Shares of Series C Convertible Preferred Stock, dated May 26, 2000, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.4**		Warrant to Purchase Shares of Common Stock, dated March 15, 2001, issued to Silicon Valley Bank.
	4	.5**		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 17, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.6**		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 28, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.7**		Warrant to Purchase Shares of Series D Convertible Preferred Stock issued to General Electric Capital Corporation.
	4	.8**		Warrant to Purchase Shares of Common Stock, dated December 6, 2002, issued to Tularik Inc.
	4	.9**		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated December 19, 2003, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.10**		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated April 21, 2004, issued Three Crowns Capital (Bermuda) Ltd.
	5	.1*		Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.
	10	.1**		Sixth Amended and Restated 1998 Employee, Director and Consultant Stock Option Plan.
	10	.2*		2006 Equity and Long Term Incentive Plan.
	10	.3*		2006 Employee Stock Purchase Plan.
	10	.4┴**		Research Collaboration and Exclusive Option Agreement, dated as of December 1, 2005, by and between Bausch & Lomb Incorporated and the Registrant.
	10	.5┴**		Collaboration and License Agreement, dated as of March 17, 2006, by and between the Registrant and Essex Chemie AG, a wholly owned subsidiary of Schering-Plough Corporation.
	10	.6*		Employment Agreement, dated as of August 1, 2002, between the Registrant and Stuart W. Peltz, Ph.D.
	10	.7*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William D. Ju, M.D.
	10	.8*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Langdon Miller, M.D.
	10	.9*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William Baird, III.
	10	.10*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and John Babiak, Ph.D.
	10	.11*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Mark E. Boulding.
	10	.12**		Lease Agreement, dated July 14, 2000, between the Registrant and 46.24 Associates L.P., as amended.
	10	.13**		Master Security Agreement, dated as of July 30, 2004, between the Registrant and Oxford Finance Corporation.

II-4

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Exhibit
Number				Description
	10	.14**		Form of Promissory Note issued to Oxford Finance Corporation.
	23	.1		Consent of KPMG LLP.
	23	.2*		Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1).
	24	.1**		Powers of Attorney (included on signature page).

	*	To be filed by amendment.

**	Previously filed.

	┴	Confidential treatment requested as to portions of the exhibit. Confidential portions omitted and filed separately with the Securities and Exchange Commission.

	(b) Financial Statement Schedules

Item 17.	Undertakings

	(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
	(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

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	PTC THERAPEUTICS, INC.

	By:	/s/ Stuart W. Peltz

	Stuart W. Peltz, Ph.D.
	President and Chief Executive Officer

Signature				Title		Date
/s/ Stuart W. Peltz   Stuart W. Peltz, Ph.D.				President, Chief Executive Officer and Director (Principal Executive Officer)		May 19, 2006
/s/ William Baird, III   William Baird, III				Chief Financial Officer (Principal Financial and Accounting Officer)		May 19, 2006
*   Michael Schmertzler				Chairman of the Board of Directors		May 19, 2006
*   Harvey Berger, M.D.				Director		May 19, 2006
*   Axel Bolte				Director		May 19, 2006
*ø   Søren Carlsen, Ph.D.				Director		May 19, 2006
*   Carl Goldfischer, M.D.				Director		May 19, 2006
*   Allan Jacobson, Ph.D.				Director		May 19, 2006
*   Michael Kranda				Director		May 19, 2006
*   David P. Southwell				Director		May 19, 2006
*By:		/s/ William Baird, III   William Baird, III Attorney-in-Fact

II-6

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Exhibit
Number				Description
	1	.1*		Form of Underwriting Agreement.
	3	.1**		Restated Certificate of Incorporation of the Registrant.
	3	.2*		Form of Restated Certificate of Incorporation of the Registrant to be effective upon closing of the offering.
	3	.3**		Amended and Restated Bylaws of the Registrant.
	3	.4*		Form of Amended and Restated Bylaws of the Registrant to be effective upon the closing of the offering.
	4	.1*		Specimen Stock Certificate evidencing shares of common stock.
	4	.2**		Fifth Amended and Restated Investor Rights Agreement, dated as of September 21, 2005, by and among the Registrant and the other parties named therein.
	4	.3**		Warrant to Purchase Shares of Series C Convertible Preferred Stock, dated May 26, 2000, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.4**		Warrant to Purchase Shares of Common Stock, dated March 15, 2001, issued to Silicon Valley Bank.
	4	.5**		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 17, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.6**		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 28, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.7**		Warrant to Purchase Shares of Series D Convertible Preferred Stock issued to General Electric Capital Corporation.
	4	.8**		Warrant to Purchase Shares of Common Stock, dated December 6, 2002, issued to Tularik Inc.
	4	.9**		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated December 19, 2003, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.10**		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated April 21, 2004, issued Three Crowns Capital (Bermuda) Ltd.
	5	.1*		Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.
	10	.1**		Sixth Amended and Restated 1998 Employee, Director and Consultant Stock Option Plan.
	10	.2*		2006 Equity and Long Term Incentive Plan.
	10	.3*		2006 Employee Stock Purchase Plan.
	10	.4┴**		Research Collaboration and Exclusive Option Agreement, dated as of December 1, 2005, by and between Bausch & Lomb Incorporated and the Registrant.
	10	.5┴**		Collaboration and License Agreement, dated as of March 17, 2006, by and between the Registrant and Essex Chemie AG, a wholly owned subsidiary of Schering-Plough Corporation.
	10	.6*		Employment Agreement, dated as of August 1, 2002, between the Registrant and Stuart W. Peltz, Ph.D.
	10	.7*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William D. Ju, M.D.
	10	.8*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Langdon Miller, M.D.
	10	.9*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William Baird, III.
	10	.10*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and John Babiak, Ph.D.

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Exhibit
Number				Description
	10	.11*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Mark E. Boulding.
	10	.12**		Lease Agreement, dated July 14, 2000, between the Registrant and 46.24 Associates L.P., as amended.
	10	.13**		Master Security Agreement, dated as of July 30, 2004, between the Registrant and Oxford Finance Corporation.
	10	.14**		Form of Promissory Note issued to Oxford Finance Corporation.
	23	.1		Consent of KPMG LLP.
	23	.2*		Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1).
	24	.1**		Powers of Attorney (included on signature page).

	*	To be filed by amendment.

**	Previously filed.

	┴	Confidential treatment requested as to portions of the exhibit. Confidential portions omitted and filed separately with the Securities and Exchange Commission.

                                                                    EXHIBIT 23.1

            Consent of Independent Registered Public Accounting Firm

The Board of Directors
PTC Therapeutics, Inc:

We consent to the use of our report dated March 31, 2006 with respect to the
balance sheets of PTC Therapeutics, Inc. as of December 31, 2004 and 2005, and
the related statements of operations, stockholders' equity (deficit) and
comprehensive loss, and cash flows for each of the years in the three-year
period ended December 31, 2005 and for the period from March 31, 1998
(inception) to December 31, 2005, included herein and to the reference to our
firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

Philadelphia, Pennsylvania
May 19, 2006