10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2016

or

¨ Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission file number: 0-27756

ALEXION PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	13-3648318
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

100 College Street, New Haven, Connecticut 06510

(Address of Principal Executive Offices) (Zip Code)

203-272-2596

(Registrant’s telephone number, including area code)

N/A

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x   No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Check One:

Large accelerated filer  x   Accelerated filer  ¨    Non-accelerated filer  ¨ (Do not check if a smaller reporting company)

Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Common Stock, $0.0001 par value	224,020,164
Class	Outstanding as of April 26, 2016

Alexion Pharmaceuticals, Inc.

Contents

PART I.		FINANCIAL INFORMATION	Page
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	2
		Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015	3
		Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015	4
		Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
	Item 4.	Controls and Procedures	38
PART II.		OTHER INFORMATION	39
	Item 1.	Legal Proceedings	39
	Item 1A.	Risk Factors	39
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
	Item 5.	Other Information	57
	Item 6.	Exhibits	57
SIGNATURES

Alexion Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(amounts in thousands, except per share amounts)

	March 31,			December 31,
	2016			2015
Assets
Current Assets:
Cash and cash equivalents	$	710,198		$	1,010,111
Marketable securities	317,354			374,904
Trade accounts receivable, net	586,249			532,832
Inventories	293,962			289,874
Prepaid expenses and other current assets	219,746			208,993
Total current assets	2,127,509			2,416,714
Property, plant and equipment, net	749,295			697,025
Intangible assets, net	4,627,817			4,707,914
Goodwill	5,049,321			5,047,885
Other assets	248,503			228,343
Total assets	$	12,802,445		$	13,097,881
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	42,897		$	57,360
Accrued expenses	359,077			403,348
Deferred revenue	78,416			20,504
Current portion of long-term debt	35,358			166,365
Other current liabilities	87,865			62,038
Total current liabilities	603,613			709,615
Long-term debt, less current portion	3,212,772			3,254,536
Contingent consideration	107,085			121,424
Facility lease obligation	172,970			151,307
Deferred tax liabilities	535,910			528,990
Other liabilities	107,818			73,393
Total liabilities	4,740,168			4,839,265
Commitments and contingencies (Note 17)
Stockholders' Equity:
Common stock, $.0001 par value; 290,000 shares authorized; 231,136 and 230,498 shares issued at March 31, 2016 and December 31, 2015, respectively	23			23
Additional paid-in capital	7,793,056			7,726,560
Treasury stock, at cost, 6,934 and 4,851 shares at March 31, 2016 and December 31, 2015, respectively	(1,007,178		)	(710,663		)
Accumulated other comprehensive income	3,815			62,301
Retained earnings	1,272,561			1,180,395
Total stockholders' equity	8,062,277			8,258,616
Total liabilities and stockholders' equity	$	12,802,445		$	13,097,881

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Alexion Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(amounts in thousands, except per share amounts)

	Three months ended March 31,
	2016			2015
Net product sales	$	700,425		$	600,333
Other revenue	613			—
Total revenues	701,038			600,333
Cost of sales	58,986			69,399
Operating expenses:
Research and development	176,290			221,080
Selling, general and administrative	232,561			187,116
Amortization of purchased intangible assets	80,094			—
Change in fair value of contingent consideration	(14,800		)	11,979
Acquisition-related costs	1,339			—
Restructuring expenses	722			7,052
Total operating expenses	476,206			427,227
Operating income	165,846			103,707
Other income and expense:
Investment income	1,551			2,884
Interest expense	(23,890		)	(651		)
Foreign currency gain	91			1,005
Income before income taxes	143,598			106,945
Income tax provision	51,432			15,622
Net income	$	92,166		$	91,323
Earnings per common share
Basic	$	0.41		$	0.46
Diluted	$	0.41		$	0.45
Shares used in computing earnings per common share
Basic	225,060			199,361
Diluted	226,873			202,034

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Alexion Pharmaceuticals, Inc.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(amounts in thousands)

	Three months ended March 31,
	2016			2015
Net income	$	92,166		$	91,323
Other comprehensive income (loss), net of tax:
Foreign currency translation	1,996			(5,388		)
Unrealized gains on marketable securities	1,498			1,057
Unrealized gains (losses) on pension obligation	2,121			(252		)
Unrealized (losses) gains on hedging activities, net of tax of $(35,650), and $38,175, respectively	(64,101		)	67,287
Other comprehensive (loss) income, net of tax	(58,486		)	62,704
Comprehensive income	$	33,680		$	154,027

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Alexion Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(amounts in thousands)

	Three months ended March 31,
	2016			2015
Cash flows from operating activities:
Net income	$	92,166		$	91,323
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	96,783			10,578
Change in fair value of contingent consideration	(14,800		)	11,979
Share-based compensation expense	56,889			42,797
Premium amortization of available-for-sale securities	515			3,178
Deferred taxes	29,332			(24,823		)
Change in excess tax benefit from stock options	(5,917		)	(52,521		)
Unrealized foreign currency gain	(13,762		)	(3,916		)
Unrealized loss (gain) on forward contracts	17,098			(434		)
Other	609			7,377
Changes in operating assets and liabilities, excluding the effect of acquisitions:
Accounts receivable	(37,287		)	(58,918		)
Inventories	(3,838		)	2,626
Prepaid expenses and other assets	(65,216		)	(38,980		)
Accounts payable, accrued expenses and other liabilities	(42,460		)	(13,659		)
Deferred revenue	57,872			46,427
Net cash provided by operating activities	167,984			23,034
Cash flows from investing activities:
Purchases of available-for-sale securities	(207,996		)	(166,319		)
Proceeds from maturity or sale of available-for-sale securities	269,495			176,256
Purchases of trading securities	(3,042		)	(2,236		)
Purchases of property, plant and equipment	(64,204		)	(57,075		)
Other	82			951
Net cash used in investing activities	(5,665		)	(48,423		)
Cash flows from financing activities:
Payments on term loan	(175,000		)	(12,000		)
Change in excess tax benefit from stock options	5,917			52,521
Repurchase of common stock	(296,515		)	(60,026		)
Net proceeds from issuance of common stock under share-based compensation arrangements	3,433			24,882
Other	(4,092		)	(303		)
Net cash (used in) provided by financing activities	(466,257		)	5,074
Effect of exchange rate changes on cash	4,025			(6,870		)
Net change in cash and cash equivalents	(299,913		)	(27,185		)
Cash and cash equivalents at beginning of period	1,010,111			943,999
Cash and cash equivalents at end of period	$	710,198		$	916,814
Supplemental cash flow disclosures from investing and financing activities:
Capitalization of construction costs related to facility lease obligations	$	25,647		$	7,813
Accrued expenses for purchases of property, plant and equipment	$	24,840		$	11,436

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

1. Business

Alexion Pharmaceuticals, Inc. (Alexion, the Company, we, our or us) is a biopharmaceutical company focused on serving patients with devastating and ultra-rare disorders through the innovation, development and commercialization of life-transforming therapeutic products.

In our complement franchise, Soliris® (eculizumab) is the first and only therapeutic approved for patients with either paroxysmal nocturnal hemoglobinuria (PNH), a life-threatening and ultra-rare genetic blood disorder, or atypical hemolytic uremic syndrome (aHUS), a life-threatening and ultra-rare genetic disease. PNH and aHUS are two severe and ultra-rare disorders resulting from chronic uncontrolled activation of the complement component of the immune system.

In our metabolic franchise, we market Strensiq® (asfotase alfa) for the treatment of patients with hypophosphatasia (HPP) and Kanuma® (sebelipase alfa) for the treatment of patients with lysosomal acid lipase deficiency (LAL-D). HPP is a genetic ultra-rare disease characterized by defective bone mineralization that can lead to deformity of bones and other skeletal abnormalities. LAL-D is a serious, life threatening ultra-rare disease in which genetic mutations result in decreased activity of the LAL enzyme leading to marked accumulation of lipids in vital organs, blood vessels and other tissues.

We are also evaluating additional potential indications for eculizumab in other severe and devastating diseases in which uncontrolled complement activation is the underlying mechanism, and we are progressing in various stages of development with additional product candidates as potential treatments for patients with severe and life-threatening rare disorders.

2. Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These accounting principles were applied on a basis consistent with those of the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. In our opinion, the accompanying unaudited consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial statements for interim periods in accordance with accounting principles generally accepted in the United States. The condensed consolidated balance sheet data as of December 31, 2015 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 included in our Annual Report on Form 10-K. The results of operations for the three months endedMarch 31, 2016 are not necessarily indicative of the results to be expected for the full year.

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

The accompanying unaudited condensed consolidated financial statements include the accounts of Alexion Pharmaceuticals, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Our significant accounting policies are described in Note 1 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new standard which amends revenue recognition principles and provides a single set of criteria for revenue recognition among all industries. The new standard provides a five step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in both interim and annual periods. The standard is effective for interim and annual periods beginning after December 15, 2017 and allows for adoption using a full retrospective method, or a modified retrospective method. Entities may elect to early adopt the standard for annual periods beginning after December 15, 2016. We are currently assessing the method of adoption and the expected impact the new standard has on our financial position and results of operations.

6

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs. The new standard aligns the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs be presented as a direct deduction from the carrying amount of the related debt. We have adopted the provisions of this standard in the first quarter 2016 and reclassified $8,635 of deferred financing costs from other current assets to the current portion of long term debt and $26,714 other non current assets to the long-term debt, less current portion in our consolidated balance sheets as of December 31, 2015.

In April 2015, the FASB issued a new standard clarifying the accounting for a customer's fees paid in a cloud computing arrangement. Under this standard, if a cloud computing arrangement includes a software license, the customer would account for the software license consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer would account for the arrangement as a service contract. We adopted the provisions of this standard in the first quarter 2016. The adoption did not have a material effect on our financial condition or results of operations.

In February 2016, the FASB issued a new standard requiring that the rights and obligations arising from leases be recognized on the balance sheet by recording a right-of-use asset and corresponding lease liability. The new standard also requires qualitative and quantitative disclosures to understand the amount, timing, and uncertainty of cash flows arising from leases as well as significant management estimates utilized. The standard is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective adoption. We are currently assessing the impact of this standard on our financial condition and results of operations.

In March 2016, the FASB issued a new standard simplifying aspects of the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, statutory withholding requirements, and classification on the statement of cash flows. The standard is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We are currently assessing the impact of this standard on our financial condition and results of operations.

3. Acquisitions

On May 6, 2015, we announced that we entered into a definitive agreement to acquire Synageva BioPharma Corp. (Synageva), a publicly-held clinical-stage biotechnology company based in Lexington, Massachusetts for per share consideration of $115 in cash and 0.6581 shares of Alexion stock. At this date, the announced purchase consideration was estimated at approximately $8,400,000, net of Synageva cash, based on the closing price of Alexion stock on May 5, 2015 of $168.55.

On June 22, 2015, we completed the acquisition of Synageva, in a transaction accounted for under the acquisition method of accounting for business combinations. Under the acquisition method of accounting, the assets acquired and liabilities assumed from Synageva were recorded as of the acquisition date at their respective fair values. Synageva's results of operations are included in the consolidated financial statements from the date of acquisition. The acquisition furthers our objective to develop and commercialize life-transforming therapies to an increasing number of patients with devastating and rare diseases. Synageva's lead product candidate, Kanuma.

We acquired all of the outstanding shares of common stock of Synageva for $4,565,524 in cash and 26,125 shares of common stock. At closing of the business combination on June 22, 2015, the purchase consideration was approximately $8,860,000, net of Synageva cash, based on Alexion's closing share price on the date of acquisition of $188.24. We financed the cash consideration with existing cash and proceeds from our new credit facility described further in Note 6.

The aggregate consideration to acquire Synageva consisted of:

Stock consideration	$	4,917,810
Cash consideration	4,565,524
Total purchase price	$	9,483,334

7

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

The following table summarizes the estimated fair values of assets acquired and liabilities assumed:

Cash	$	626,217
Inventory	23,880
In-process research and development (IPR&D)	4,236,000
Deferred tax liabilities, net	(171,638		)
Other assets and liabilities	(26,373		)
Net assets acquired	4,688,086
Goodwill	4,795,248
Total purchase price	$	9,483,334

Our accounting for this acquisition is preliminary. The fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, and our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The areas of these preliminary estimates that are not yet finalized relate primarily to tax-related items and potential contingent liabilities.

We acquired $23,880 of Kanuma inventory. The estimated fair value of work-in-process and finished goods inventory was determined utilizing the comparative sales method, based on the expected selling price of the inventory, adjusted for incremental costs to complete the manufacturing process and for direct selling efforts, as well as for a reasonable profit allowance. The estimated fair value of raw material inventory was valued at replacement cost, which is equal to the value a market participant would pay to acquire the inventory.

Intangible assets associated with IPR&D projects primarily relate to Synageva's lead product candidate, Kanuma. The estimated fair value of IPR&D assets of $4,236,000 was determined using the multi-period excess earnings method, a variation of the income approach. The multi-period excess earnings method estimates the value of an intangible asset equal to the present value of the incremental after-tax cash flows attributable to that intangible asset. The fair value using the multi-period excess earnings method was dependent on an estimated weighted average cost of capital for Synageva of 10%, which represents a rate of return that a market participant would expect for these assets.

The excess of purchase price over the fair value amounts of the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. The goodwill, which is not tax-deductible, has been recorded as a noncurrent asset and is not amortized, but is subject to an annual review for impairment. The goodwill represents future economic benefits arising from other assets acquired that could not be individually identified and separately recognized and expected synergies that are specific to our business and not available to market participants, including our unique ability to commercialize therapies for rare diseases, our existing relationships with specialty physicians who can identify patients with LAL-D, a global distribution network to facilitate drug delivery and other benefits that we believe will result from combining the operations of Synageva within our operations.

We recorded a net deferred tax liability of $171,638. This amount was primarily comprised of $602,887 of deferred tax liabilities related to the IPR&D and inventory acquired, offset by $431,249 of deferred tax assets related to net operating loss carryforwards (NOLs), tax credits, and other temporary differences, which we expect to utilize.

Acquisition-Related Costs

Acquisition-related costs associated with our business combinations for the years ended for the three months ended, March 31, 2016 and 2015 include the following:

	Three months ended March 31,
	2016		2015
Transaction costs (1)	$	375	$	—
Integration costs	964		—
	$	1,339	$	—
(1) Transaction costs include investment advisory, legal, and accounting fees

8

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

4. Inventories

Inventories are stated at the lower of cost or estimated realizable value. We determine the cost of inventory on a standard cost basis, which approximates average costs.

The components of inventory are as follows:

	March 31,		December 31,
	2016		2015
Raw materials	$	16,948	$	17,924
Work-in-process	162,979		180,324
Finished goods	114,035		91,626
	$	293,962	$	289,874

5. Intangible Assets and Goodwill

The following table summarizes the carrying amount of our intangible assets and goodwill, net of accumulated amortization:

		March 31, 2016							December 31, 2015
	Estimated Life (years)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Licenses	6-8	$	28,507	$	(28,507	)	$	—	$	28,507	$	(28,504	)	$	3
Patents	7	10,517		(10,517		)	—		10,517		(10,517		)	—
Purchased technology	6-16	4,708,495		(196,678		)	4,511,817		4,708,495		(116,584		)	4,591,911
Acquired IPR&D	Indefinite	116,000		—			116,000		116,000		—			116,000
Total		$	4,863,519	$	(235,702	)	$	4,627,817	$	4,863,519	$	(155,605	)	$	4,707,914
Goodwill	Indefinite	$	5,052,222	$	(2,901	)	$	5,049,321	$	5,050,786	$	(2,901	)	$	5,047,885

Amortization expense was $80,097 and $11for the three months endedMarch 31, 2016 and 2015, respectively. Total estimated amortization expense for finite-lived intangible assets is $240,106 for the nine months ending December 31, 2016, and $320,142 for each of the years ending December 31, 2017 through December 31, 2021.

The following table summarizes the changes in the carrying amount of goodwill:

Balance at December 31, 2015	$	5,047,885
Change in goodwill associated with prior acquisition	1,436
Balance at March 31, 2016	$	5,049,321

6. Debt

In June 2015, Alexion entered into a credit agreement (Credit Agreement) with a syndicate of banks, which provides for a $3,500,000 term loan facility and a $500,000 revolving credit facility maturing in five years. Borrowings under the term loan are payable in quarterly installments equal to 1.25% of the original loan amount, beginning December 31, 2015. Final repayment of the term loan and revolving credit loans are due on June 22, 2020. In addition to borrowings in which prior notice is required, the revolving credit facility includes a sublimit of $100,000 in the form of letters of credit and borrowings on same-day notice, referred to as swingline loans, of up to $25,000. Borrowings can be used for working capital requirements, acquisitions and other general corporate purposes. With the consent of the lenders and the administrative agent, and subject to satisfaction of certain conditions, we may increase the term loan facility and/or the revolving credit facility in an amount that does not cause our consolidated net leverage ratio to exceed the maximum allowable amount.

In connection with entering into the Credit Agreement, we paid $45,492 in financing costs which are being amortized as interest expense over the life of the debt. Amortization expense associated with deferred financing costs for the three months ended March 31, 2016 was $2,513.

9

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

We made principle payments of $175,000 during the three months ended March 31, 2016. As of March 31, 2016, we had $3,281,250 outstanding on the term loan. As of March 31, 2016, we had open letters of credit of $12,970, and our borrowing availability under the revolving facility was $487,030.

The fair value of our long term debt, which is measured using Level 2 inputs, approximates book value.

7. Earnings Per Common Share

Basic earnings per common share (EPS) is computed by dividing net income by the weighted-average number of shares of common stock outstanding. For purposes of calculating diluted EPS, the denominator reflects the potential dilution that could occur if stock options, unvested restricted stock, unvested restricted stock units or other contracts to issue common stock were exercised or converted into common stock, using the treasury stock method.

The following table summarizes the calculation of basic and diluted EPS for the three months endedMarch 31, 2016 and 2015:

	Three months ended
	March 31,
	2016		2015
Net income used for basic and diluted calculation	$	92,166	$	91,323
Shares used in computing earnings per common share—basic	225,060		199,361
Weighted-average effect of dilutive securities:
Stock awards	1,813		2,673
Shares used in computing earnings per common share—diluted	226,873		202,034
Earnings per common share:
Basic	$	0.41	$	0.46
Diluted	$	0.41	$	0.45

We exclude from EPS the weighted-average number of securities whose effect is anti-dilutive. Excluded from the calculation of EPS for the three months ended March 31, 2016 and 2015 were 3,975 and 2,248 shares of common stock, respectively, because their effect was anti-dilutive.

8. Marketable Securities

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of available-for-sale investments by type of security at March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
Commercial paper	$	3,999	$	—	$	—		$	3,999
Corporate bonds	136,009		553		(3		)	136,559
Municipal bonds	50,470		43		(2		)	50,511
Other government-related obligations:
U.S.	13,643		43		(27		)	13,659
Foreign	141,593		244		(19		)	141,818
	$	345,714	$	883	$	(51	)	$	346,546

10

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

	December 31, 2015
	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
Commercial paper	$	254,396	$	—	$	—		$	254,396
Corporate bonds	133,062		23		(336		)	132,749
Municipal bonds	87,173		1		(63		)	87,111
Other government-related obligations:
U.S.	25,244		—		(94		)	25,150
Foreign	163,403		—		(504		)	162,899
Bank certificates of deposit	27,000		—		—			27,000
	$	690,278	$	24	$	(997	)	$	689,305

The aggregate fair value of available-for-sale securities in an unrealized loss position as of March 31, 2016 and December 31, 2015 was $62,496 and $293,947, respectively. Investments that have been in a continuous unrealized loss position for more than 12 months were not material. As of March 31, 2016, we believe that the cost basis of our available-for-sale investments is recoverable.

The fair values of available-for-sale securities by classification in the condensed consolidated balance sheet were as follows:

	March 31, 2016		December 31, 2015
Cash and cash equivalents	$	40,999	$	323,218
Marketable securities	305,547		366,087
	$	346,546	$	689,305

The fair values of available-for-sale debt securities at March 31, 2016, by contractual maturity, are summarized as follows:

	March 31, 2016
Due in one year or less	$	140,145
Due after one year through three years	206,401
	$	346,546

As of March 31, 2016 and December 31, 2015, the fair value of our trading securities was $11,807 and $8,817, respectively.

We utilize the specific identification method in computing realized gains and losses. Realized gains and losses on our available-for-sale and trading securities were not material for the three months endedMarch 31, 2016.

9. Derivative Instruments and Hedging Activities

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

We enter into foreign exchange forward contracts, with durations of up to 60 months, to hedge exposures resulting from portions of our forecasted revenues, including intercompany revenues, that are denominated in currencies other than the U.S. dollar. The purpose of these hedges is to reduce the volatility of exchange rate fluctuations on our operating results and to increase the visibility of the foreign exchange impact on forecasted revenues. These hedges are designated as cash flow hedges

11

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

upon contract inception. At March 31, 2016, we had open contracts with notional amounts totaling $2,088,952 that qualified for hedge accounting.

The impact on accumulated other comprehensive income (AOCI) and earnings from foreign exchange contracts that qualified as cash flow hedges, for the three months endedMarch 31, 2016 and 2015 were as follows:

	Three months ended
	March 31,
	2016			2015
Gain (loss) recognized in AOCI, net of tax	$	(49,442	)	$	93,809
Gain reclassified from AOCI to net product sales (effective portion), net of tax	$	14,659		$	25,447
Gain reclassified from AOCI to other income and expense (ineffective portion), net of tax	$	—		$	1,075

Assuming no change in foreign exchange rates from market rates at March 31, 2016, $39,730 of gain recognized in AOCI will be reclassified to revenue over the next 12 months.

We enter into foreign exchange forward contracts, with durations of approximately 90 days, designed to limit the balance sheet exposure of monetary assets and liabilities. We enter into these hedges to reduce the impact of fluctuating exchange rates on our operating results. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of March 31, 2016, the notional amount of foreign exchange contracts where hedge accounting is not applied was $307,585.

We recognized a (loss) gain of $(12,969) and $6,423, in other income and expense, for the three months ended March 31, 2016 and 2015, respectively, associated with the foreign exchange contracts not designated as hedging instruments. These amounts were partially offset by gains or losses on monetary assets and liabilities.

The following tables summarize the fair value of outstanding derivatives at March 31, 2016 and December 31, 2015:

	March 31, 2016
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	55,976	Other current liabilities	$	15,870
Foreign exchange forward contracts	Other non-current assets	35,019		Other non-current liabilities	30,740
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	2,594		Other current liabilities	16,186
Total fair value of derivative instruments		$	93,589		$	62,796

12

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

	December 31, 2015
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	85,058	Other current liabilities	$	1,491
Foreign exchange forward contracts	Other non-current assets	66,309		Other non-current liabilities	4,773
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	6,687			4,157
Total fair value of derivative instruments		$	158,054		$	10,421

Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association (ISDA) agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. The following tables summarize the potential effect on our condensed consolidated balance sheets of offsetting our foreign exchange forward contracts subject to such provisions:

	March 31, 2016
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet			Derivative Financial Instruments			Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	93,589		$	—	$	93,589		$	(27,928	)	$	—	$	65,661
Derivative liabilities	(62,796		)	—		(62,796		)	27,928			—		(34,868		)

	December 31, 2015
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet			Derivative Financial Instruments			Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	158,054		$	—	$	158,054		$	(10,421	)	$	—	$	147,633
Derivative liabilities	(10,421		)	—		(10,421		)	10,421			—		—

10. Other Investments

Other investments include our investment of $37,500 in the preferred stock of Moderna LLC. Our investment is recorded at cost within other assets in our condensed consolidated balance sheets. The carrying value of this investment was not impaired as of March 31, 2016.

13

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

11. Stockholders' Equity

In November 2012, our Board of Directors authorized a share repurchase program. The repurchase program does not have an expiration date, and we are not obligated to acquire a particular number of shares. The repurchase program may be discontinued at any time at the Company's discretion. In May 2015, our Board of Directors increased the authorization to acquire shares with an aggregate value of up to $1,000,000 for future purchases under the repurchase program, which superseded all prior repurchase programs. Under the program, we repurchased 2,083 and 334 shares of our common stock at a cost of $296,515 and $60,026 during the three months endedMarch 31, 2016 and 2015, respectively.

Subsequent to March 31, 2016, we repurchased 245 shares of our common stock under our repurchase program at a cost of $34,136. As of April 29, 2016, there is a total of $425,213 remaining for repurchases under the repurchase program.

12. Other Comprehensive Income and Accumulated Other Comprehensive Income

The following tables summarize the changes in AOCI, by component, for the three months endedMarch 31, 2016 and 2015:

	Defined Benefit Pension Plans			Unrealized Gains (Losses) from Marketable Securities			Unrealized Gains (Losses) from Hedging Activities			Foreign Currency Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)
Balances, December 31, 2015	$	(9,589	)	$	(785	)	$	92,670		$	(19,995	)	$	62,301
Other comprehensive income before reclassifications	2,035			1,333			(49,442		)	1,996			(44,078		)
Amounts reclassified from other comprehensive income	86			165			(14,659		)	—			(14,408		)
Net other comprehensive income (loss)	2,121			1,498			(64,101		)	1,996			(58,486		)
Balances, March 31, 2016	$	(7,468	)	$	713		$	28,569		$	(17,999	)	$	3,815

	Defined Benefit Pension Plan			Unrealized Gains (Losses) from Marketable Securities			Unrealized Gains (Losses) From Hedging Activities			Foreign Currency Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)
Balances, December 31, 2014	$	(16,570	)	$	(234	)	$	87,308		$	(13,719	)	$	56,785
Other comprehensive income before reclassifications	(488		)	1,065			93,809			(5,388		)	88,998
Amounts reclassified from other comprehensive income	236			(8		)	(26,522		)	—			(26,294		)
Net other comprehensive income (loss)	(252		)	1,057			67,287			(5,388		)	62,704
Balances, March 31, 2015	$	(16,822	)	$	823		$	154,595		$	(19,107	)	$	119,489

14

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

The table below provides details regarding significant reclassifications from AOCI during the three months endedMarch 31, 2016 and 2015:

Details about Accumulated Other Comprehensive Income Components	Amount Reclassified From Accumulated Other Comprehensive Income during the three months ended March 31,						Affected Line Item in the Condensed Consolidated Statements of Operations
	2016			2015
Unrealized Gains (Losses) from Hedging Activity
Effective portion of foreign exchange contracts	$	22,812		$	29,083		Net product sales
Ineffective portion of foreign exchange contracts	—			1,228			Foreign currency gain
	22,812			30,311
	(8,153		)	(3,789		)	Income tax provision
	$	14,659		$	26,522
Unrealized Gains (Losses) from Marketable Securities
Realized (loss) gain on sale of securities	$	(262	)	$	13		Investment income
	(262		)	13
	97			(5		)	Income tax provision
	$	(165	)	$	8
Defined Benefit Pension Plans
Amortization of prior service costs and actuarial losses	$	(114	)	$	(311	)	(a)
	(114		)	(311		)
	28			75			Income tax provision
	$	(86	)	$	(236	)

(a) This AOCI component is included in the computation of net periodic pension benefit cost (see Note 15 for additional details).

13. Fair Value Measurement

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

15

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value.

		Fair Value Measurement at March 31, 2016
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Institutional money market funds	$	82,416	$	—	$	82,416	$	—
Cash equivalents	Commercial paper	$	3,999	$	—	$	3,999	$	—
Cash equivalents	Corporate bonds	$	15,000	$	—	$	15,000	$	—
Cash equivalents	Municipal bonds	$	22,000	$	—	$	22,000	$	—
Marketable securities	Mutual funds	$	11,807	$	11,807	$	—	$	—
Marketable securities	Corporate bonds	$	121,559	$	—	$	121,559	$	—
Marketable securities	Municipal bonds	$	28,511	$	—	$	28,511	$	—
Marketable securities	Other government-related obligations	$	155,477	$	—	$	155,477	$	—
Other current assets	Foreign exchange forward contracts	$	58,570	$	—	$	58,570	$	—
Other assets	Foreign exchange forward contracts	$	35,019	$	—	$	35,019	$	—
Other current liabilities	Foreign exchange forward contracts	$	32,056	$	—	$	32,056	$	—
Other liabilities	Foreign exchange forward contracts	$	30,740	$	—	$	30,740	$	—
Other current liabilities	Acquisition-related contingent consideration	$	55,343	$	—	$	—	$	55,343
Contingent consideration	Acquisition-related contingent consideration	$	107,085	$	—	$	—	$	107,085

16

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

		Fair Value Measurement at December 31, 2015
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Institutional money market funds	$	179,898	$	—	$	179,898	$	—
Cash equivalents	Commercial paper	$	192,418	$	—	$	192,418	$	—
Cash equivalents	Corporate bonds	$	12,250	$	—	$	12,250	$	—
Cash equivalents	Municipal bonds	$	60,001	$	—	$	60,001	$	—
Cash equivalents	Other government-related obligations	$	31,549	$	—	$	31,549	$	—
Cash equivalents	Bank certificates of deposit	$	27,000	$	—	$	27,000	$	—
Marketable securities	Mutual funds	$	8,817	$	8,817	$	—	$	—
Marketable securities	Commercial paper	$	61,978	$	—	$	61,978	$	—
Marketable securities	Corporate bonds	$	120,499	$	—	$	120,499	$	—
Marketable securities	Municipal bonds	$	27,110	$	—	$	27,110	$	—
Marketable securities	Other government-related obligations	$	156,500	$	—	$	156,500	$	—
Other current assets	Foreign exchange forward contracts	$	91,745	$	—	$	91,745	$	—
Other assets	Foreign exchange forward contracts	$	66,309	$	—	$	66,309	$	—
Other current liabilities	Foreign exchange forward contracts	$	5,648	$	—	$	5,648	$	—
Other liabilities	Foreign exchange forward contracts	$	4,773	$	—	$	4,773	$	—
Other current liabilities	Acquisition-related contingent consideration	$	55,804	$	—	$	—	$	55,804
Contingent consideration	Acquisition-related contingent consideration	$	121,424	$	—	$	—	$	121,424

There were no securities transferred between Level 1, 2 and 3 during the three months endedMarch 31, 2016.

Valuation Techniques

We classify mutual fund investments, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.

Cash equivalents and marketable securities classified as Level 2 within the valuation hierarchy consist of institutional money market funds, commercial paper, municipal bonds, U.S. and foreign government-related debt, corporate debt securities and certificates of deposit. We estimate the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

Our derivative assets and liabilities include foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk as well as an evaluation of our counterparties’ credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy.

Contingent consideration liabilities related to acquisitions are classified as Level 3 within the valuation hierarchy and are valued based on various estimates, including probability of success, discount rates and amount of time until the conditions of the milestone payments are met.

17

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

As of March 31, 2016, there has not been any impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties’ credit risks.

Contingent Consideration

In connection with prior acquisitions, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approvals or sales-based milestone events. We determine the fair value of these obligations on the acquisition date using various estimates that are not observable in the market and represent a Level 3 measurement within the fair value hierarchy. The resulting probability-weighted cash flows were discounted using a cost of debt of 5.5% for developmental milestones and a weighted average cost of capital ranging from 10% to 21% for sales-based milestones.

Each reporting period, we adjust the contingent consideration to fair value with changes in fair value recognized in operating earnings. Changes in fair values reflect new information about the probability and timing of meeting the conditions of the milestone payments. In the absence of new information, changes in fair value will only reflect the interest component of contingent consideration related to the passage of time as development work progresses towards the achievement of the milestones.

Estimated future contingent milestone payments related to prior business combinations range from zero if no milestone events are achieved, to a maximum of $826,000 if all development, regulatory and sales-based milestones are reached. As of March 31, 2016, the fair value of acquisition-related contingent consideration was $162,428. The following table represents a roll-forward of our acquisition-related contingent consideration:

Balance at December 31, 2015	$	(177,228	)
Change in fair value	14,800
Balance at March 31, 2016	$	(162,428	)

14. Income Taxes

The following table provides a comparative summary of our income tax provision and effective tax rate for the three months endedMarch 31, 2016 and 2015:

	Three months ended
	March 31,
	2016			2015
Provision for income taxes	$	51,432		$	15,622
Effective tax rate	35.8		%	14.6		%

The tax provision for the three months endedMarch 31, 2016 and 2015 is attributable to the U.S. federal, state and foreign income taxes on our profitable operations. The increase in the effective tax rate for the three months endedMarch 31, 2016 as compared to the same period in the prior year is primarily attributable to the deferred tax cost associated with the distribution of earnings from our captive foreign partnership. This non-cash deferred tax cost increased the effective tax rate by approximately 19%.

In the first quarter of 2016, we identified a correction to our 2015 tax provision of $8,955 due to a calculation error. This understated income tax expense and the deferred tax liability as of December 31, 2015 and was recorded as an out of period adjustment in the first quarter of 2016. The correction was determined to be immaterial to our consolidated financial statements for the periods ending December 31, 2015 and March 31, 2016 as well as our expected results for 2016.

Tax years 2013 and 2014 are currently under review by the Examination Division of the Internal Revenue Service (IRS). As of March 31, 2016, we have not been notified of any significant proposed adjustments by the IRS.

We continue to maintain a valuation allowance against certain deferred tax assets where realization is not certain.

15. Defined Benefit Plans

We maintain defined benefit plans for employees in certain countries outside the United States, including retirement benefit plans required by applicable local law. The plans are valued by independent actuaries using the projected unit credit

18

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

method. The liabilities correspond to the projected benefit obligations of which the discounted net present value is calculated based on years of employment, expected salary increases, and pension adjustments.

The components of net periodic benefit cost are as follows:

	Three months ended
	March 31,
	2016			2015
Service cost	$	2,023		$	2,421
Interest cost	60			180
Expected return on plan assets	(163		)	(243		)
Employee contributions	(352		)	(427		)
Amortization	114			311
Total net periodic benefit cost	$	1,682		$	2,242

16. Facility Lease Obligations

New Haven Facility Lease Obligation

In November 2012, we entered into a new lease agreement for office and laboratory space to be constructed in New Haven, Connecticut. The term of the new lease commenced in 2015 and will expire in 2030, with a renewal option of ten years. Although we will not legally own the premises, we are deemed to be the owner of the building during the construction period based on applicable accounting guidance for build-to-suit leases because of the substantial amount of tenant improvements we directly funded during the construction period. Due to the substantial tenant improvements directly funded during construction, we will continue to be deemed the owner of the building once construction is complete. Accordingly, the landlord's costs of constructing the facility during construction are required to be capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in our consolidated balance sheet.

Construction of the new facility was completed and the building was placed into service in the first quarter 2016. As of March 31, 2016 and December 31, 2015, our facility lease obligation related to this facility was $134,211 and $132,866,respectively.

Lonza Facility Lease Obligation

During the third quarter 2015, we entered into a new agreement with Lonza Group AG and its affiliates (Lonza) whereby Lonza will construct a new manufacturing facility dedicated to Alexion at its existing Portsmouth, New Hampshire facility. The agreement requires us to make certain payments during the construction of the new manufacturing facility and annual payments for ten years thereafter. As a result of our contractual right to full capacity of the new manufacturing facility, a portion of the payments under the agreement are considered to be lease payments and a portion as payment for the supply of inventory. Although we will not legally own the premises, we are deemed to be the owner of the manufacturing facility during the construction period based on applicable accounting guidance for build-to-suit leases due to our involvement during the construction period. As of March 31, 2016 and December 31, 2015, we recorded a construction-in-process asset of $42,652 and $19,259 and an offsetting facility lease obligation of $35,632 and $15,229 associated with the manufacturing facility, respectively.

Payments made to Lonza under the agreement are allocated to the purchases of inventory and the repayment of the facility lease obligation on a relative fair value basis. In 2016, we made $23,000 of payments to Lonza under this agreement, of which $2,990 was applied against the outstanding facility lease obligation and $20,010 was recognized as a prepayment of inventory.

17. Commitments and Contingencies

Commitments

Manufacturing Agreements

We have various manufacturing development agreements to support our clinical and commercial product needs. We rely on Lonza, a third party manufacturer, to produce a portion of commercial and clinical quantities of Soliris and Strensiq. We have various agreements with Lonza with remaining total non-cancellable future commitments of approximately $1,134,661. If we terminate certain supply agreements with Lonza without cause, we will be required to pay for product scheduled for

19

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

manufacture under our arrangement. Under an existing arrangement with Lonza, we also pay Lonza a royalty on sales of Soliris manufactured at Alexion Rhode Island Manufacturing Facility (ARIMF) and a payment with respect to sales of Soliris manufactured at Lonza facilities.

In addition to Lonza, we have non-cancellable commitments of $35,035 with other third party manufacturers.

Contingent Liabilities

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

We have in the past received, and may in the future receive, notices from third parties claiming that their patents may be infringed by the development, manufacture or sale of Soliris. Under the guidance of ASC 450, Contingencies, we record a royalty accrual based on our best estimate of the fair value percent of net sales of Soliris that we could be required to pay the owners of patents for technology used in the manufacture and sale of Soliris. A costly license, or inability to obtain a necessary license, could have a material adverse effect on our financial results.

In May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting information related to our grant-making activities and compliance with the Foreign Corrupt Practices Act (FCPA) in various countries. In addition, in October 2015, Alexion received a request from the U.S. Department of Justice (DOJ) for the voluntary production of documents and other information pertaining to Alexion's compliance with the FCPA. The SEC and DOJ also seek information related to Alexion’s recalls of specific lots of Soliris and related securities disclosures. Alexion is cooperating with these investigations. At this time, Alexion is unable to predict the duration, scope or outcome of these investigations. Given the ongoing nature of these investigations, management does not currently believe a loss related to these matters is probable or that the potential magnitude of such loss or range of loss, if any, can be reasonably estimated.

In March 2013, we received a Warning Letter (Warning Letter) from the U.S. Food and Drug Administration (FDA) regarding compliance with current Good Manufacturing Practices (cGMP) at ARIMF. The Warning Letter followed receipt of a Form 483 Inspectional Observations by the FDA in connection with an FDA inspection that concluded in August 2012. The observations relate to commercial and clinical manufacture of Soliris at ARIMF. We responded to the Warning Letter in a letter to the FDA dated in April 2013. As previously announced, the FDA issued Form 483s in August 2014 and August 2015 relating to observations at ARIMF. The inspectional observations from the August 2015 letter have since been closed out by the FDA.

The observations are inspectional and do not represent a final FDA determination of compliance. We continue to manufacture products, including Soliris, in this facility. While the resolution of the issues raised in the Warning Letter is difficult to predict, we do not currently believe a loss related to this matter is probable or that the potential magnitude of such loss or range of loss, if any, can be reasonably estimated.

18. Restructuring

In connection with the acquisition and integration of Synageva in 2015, we recorded a restructuring benefit of $924 for the three months endedMarch 31, 2016 primarily related to changes in estimates associated with employee costs. We expect to pay all remaining accrued amounts related to this restructuring activity by the end of 2016.

In the fourth quarter 2014, we announced plans to move our European headquarters from Lausanne to Zurich, Switzerland. The relocation of our European headquarters supports our operational needs based on growth in the European region. During the three months endedMarch 31, 2016, we incurred additional restructuring costs of $1,646. We expect to pay all remaining accrued amounts related to this restructuring activity by the end of 2016.

20

Alexion Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(amounts in thousands, except per share amounts)

The following table presents a reconciliation of the restructuring reserve recorded within accrued expenses on the Company's condensed consolidated balance sheet for the three months endedMarch 31, 2016:

	Employee Separation Costs			Contract Termination Costs			Other Costs			Total
Liability, beginning of period	$	6,390		$	682		$	169		$	7,241
Restructuring expenses	—			35			417			452
Cash settlements	(3,806		)	(508		)	(570		)	(4,884		)
Adjustments to previous estimates	(1,148		)	1,418			—			270
Liability, end of period	$	1,436		$	1,627		$	16		$	3,079

The restructuring reserve of $3,079 is recorded in accrued expenses on the Company's condensed consolidated balance sheet as of March 31, 2016.

21

Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by our management, and may include, but are not limited to, statements regarding the potential benefits and commercial potential of Soliris®, Strensiq® and Kanuma® for approved indications and any expanded uses, timing and effect of sales of our products in various markets worldwide, pricing for our products, level of insurance coverage and reimbursement for our products, level of future product sales and collections, timing regarding development and regulatory approvals for our products in additional indications or in additional territories, the medical and commercial potential of additional indications for Soliris, failure to satisfactorily address the issues raised by the U.S. Food and Drug Administration (FDA) in the March 2013 Warning Letter and Form 483s issued by the FDA, costs, expenses and capital requirements, cash outflows, cash from operations, status of reimbursement, price approval and funding processes in various countries worldwide, progress in developing commercial infrastructure and interest about our products and our product candidates in the patient, physician and payer communities, the safety and efficacy of our products and our product candidates, estimates of the potential markets and estimated commercialization dates for our products and our product candidates around the world, sales and marketing plans, any changes in the current or anticipated market demand or medical need for our products or our product candidates, status of our ongoing clinical trials for our product candidates, commencement dates for new clinical trials, clinical trial results, evaluation of our clinical trial results by regulatory agencies, the adequacy of our pharmacovigilance and drug safety reporting processes, prospects for regulatory approval of our product candidates, need for additional research and testing, the uncertainties involved in the drug development process and manufacturing, performance and reliance on third party service providers, our future research and development activities, plans for acquired programs, our ability to develop and commercialize products with our collaborators, assessment of competitors and potential competitors, the outcome of challenges and opposition proceedings to our intellectual property, assertion or potential assertion by third parties that the manufacture, use or sale of our products infringes their intellectual property, estimates of the capacity of manufacturing and other service facilities to support our products and our product candidates, potential costs resulting from product liability or other third party claims, the sufficiency of our existing capital resources and projected cash needs, the possibility that expected tax benefits will not be realized, assessment of impact of recent accounting pronouncements, declines in sovereign credit ratings or sovereign defaults in countries where we sell our products, delay of collection or reduction in reimbursement due to adverse economic conditions or changes in government and private insurer regulations and approaches to reimbursement, uncertainties surrounding government investigations, including our Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ) investigations, the short and long term effects of other government healthcare measures, the effect of interest rate increases, and the effect of shifting foreign exchange rates. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Such risks and uncertainties include, but are not limited to, those discussed later in this report under the section entitled “Risk Factors”. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether because of new information, future events or otherwise. However, readers should carefully review the risk factors set forth in this and other reports or documents we file from time to time with the SEC.

Business

We are a biopharmaceutical company focused on serving patients with devastating and ultra-rare disorders through the innovation, development and commercialization of life-transforming therapeutic products.

In our complement franchise, Soliris (eculizumab)is the first and only therapeutic approved for patients with either PNH or aHUS. In our metabolic franchise, we market Strensiq (asfotase alfa) for the treatment of patients with HPP and Kanuma (sebelipase alfa) for the treatment of patients with LAL-D.

We are also evaluating additional potential indications for eculizumab in other severe and devastating diseases in which uncontrolled complement activation is the underlying mechanism, and we are progressing in various stages of development with additional product candidates as potential treatments for patients with severe and life-threatening rare disorders.

Products and Development Programs

We focus our product development programs on life-transforming therapeutics for devastating and ultra-rare diseases for which current treatments are either non-existent or inadequate.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Marketed Products

Our marketed products include the following:

Product	Development Area	Indication	Development Stage
Soliris (eculizumab)	Hematology	Paroxysmal Nocturnal Hemoglobinuria (PNH)	Commercial
		PNH Registry	Phase IV
	Hematology/Nephrology	Atypical Hemolytic Uremic Syndrome (aHUS)	Commercial
		aHUS Registry	Phase IV
Strensiq (asfotase alfa)	Metabolic Disorders	Hypophosphatasia (HPP)	Commercial
		HPP Registry	Phase IV
Kanuma (sebelipase alfa)	Metabolic Disorders	Lysosomal Acid Lipase Deficiency (LAL-D)	Commercial
		LAL-D Registry	Phase IV

Soliris (eculizumab)

Soliris is designed to inhibit a specific aspect of the complement component of the immune system and thereby treat inflammation associated with chronic disorders in several therapeutic areas, including hematology, nephrology, transplant rejection and neurology. Soliris is a humanized monoclonal antibody that effectively blocks terminal complement activity at the doses currently prescribed. The initial indication for which we received approval for Soliris is PNH.

Paroxysmal Nocturnal Hemoglobinuria (PNH)

PNH is a debilitating and life-threatening, ultra-rare genetic blood disorder defined by chronic uncontrolled complement activation leading to the destruction of red blood cells (hemolysis). The chronic hemolysis in patients with PNH may be associated with life-threatening thromboses, recurrent pain, kidney disease, disabling fatigue, impaired quality of life, severe anemia, pulmonary hypertension, shortness of breath and intermittent episodes of dark-colored urine (hemoglobinuria). We continue to work with researchers to expand the base of knowledge in PNH and the utility of Soliris to treat patients with PNH. Soliris is approved for the treatment of PNH in the United States, Europe, Japan and in several other territories. We are sponsoring a multinational registry to gather information regarding the natural history of patients with PNH and the longer term outcomes during Soliris treatment. In addition, Soliris has been granted orphan drug designation for the treatment of PNH in the United States, Europe, Japan and several other territories.

Atypical Hemolytic Uremic Syndrome (aHUS)

aHUS is a severe and life-threatening genetic ultra-rare disease characterized by chronic uncontrolled complement activation and thrombotic microangiopathy (TMA), the formation of blood clots in small blood vessels throughout the body, causing a reduction in platelet count (thrombocytopenia) and life-threatening damage to the kidney, brain, heart and other vital organs. Soliris is approved for the treatment of pediatric and adult patients with aHUS in the United States, Europe and Japan. In addition, the FDA and EC have granted Soliris orphan drug designation for the treatment of patients with aHUS.

Strensiq (asfotase alfa)

Hypophosphatasia (HPP)

HPP is an ultra-rare genetic and progressive metabolic disease in which patients experience devastating effects on multiple systems of the body, leading to debilitating or life-threatening complications. HPP is characterized by defective bone mineralization that can lead to deformity of bones and other skeletal abnormalities, as well as systemic complications such as profound muscle weakness, seizures, pain, and respiratory failure leading to premature death in infants.

Strensiq, a targeted enzyme replacement therapy, is the first and only approved therapy for patients with HPP, and is designed to directly address underlying causes of HPP by aiming to restore the genetically defective metabolic process, thereby preventing or reversing the severe and potentially life-threatening complications in patients with HPP. In 2015, the FDA approved Strensiq for patients with perinatal-, infantile- and juvenile-onset HPP, the European Commission (EC) granted marketing authorization for Strensiq for the treatment of patients with pediatric-onset HPP, and Japan’s Ministry of Health. Labour and Welfare (MHLW) approved Strensiq for the treatment of patients with HPP.

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(amounts in thousands except per share amounts)

In April 2016, new long-term data was presented showing clinically significant and sustained improvements in bone healing, respiratory support, and physical function in children with perinatal and infantile-onset HPP treated with Strensiq. In addition, adolescents and adult patients reduced or eliminated their need of ambulatory assistive devices and had improvements in physical function.

Kanuma (sebelipase alfa)

Lysosomal Acid Lipase Deficiency (LAL Deficiency or LAL-D)

LAL-D is a serious, life-threatening ultra-rare disease associated with premature mortality and significant morbidity. LAL-D is a chronic disease in which genetic mutations result in decreased activity of the LAL enzyme that leads to marked accumulation of lipids in vital organs, blood vessels, and other tissues, resulting in progressive and systemic organ damage including hepatic fibrosis, cirrhosis, liver failure, accelerated atherosclerosis, cardiovascular disease, and other devastating consequences.

Kanuma, a recombinant form of the human LAL enzyme, is the only enzyme-replacement therapy that is approved for the treatment for patients with LAL-D. In 2015, the FDA approved Kanuma for the treatment of patients with LAL-D and the EC granted marketing authorization of Kanuma for long-term enzyme replacement therapy in patients of all ages with LAL-D. On March 28, 2016, we announced that Japan's MHLW approved Kanuma for the treatment of patients of all ages in Japan with LAL-D.

In March 2016, researchers presented new two-year data from an ongoing, open-label Phase 2/3 trial of Kanuma in infants with LAL-D. Data from this study demonstrated a substantial survival benefit to beyond 2 years of age for patients with rapidly progressive LAL-D during infancy who were treated with Kanuma. Patients also had improvements in a number of key parameters, including weight gain, important markers of liver disease, gastrointestinal symptoms, anemia, and hepatosplenomegaly (enlargement of both the liver and spleen), and 4 out of 5 patients demonstrated normal development.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Clinical Development Programs

Our programs, including investigator sponsored clinical programs, include the following:

Product	Development Area	Indication	Development Stage
Soliris (eculizumab)	Neurology	Generalized Myasthenia Gravis (gMG)	Phase III
		Neuromyelitis Optica Spectrum Disorder (NMOSD)	Phase III
	Transplant	Delayed Kidney Transplant Graft Function (DGF)	Phase III
		Antibody Mediated Rejection (AMR) Presensitized Renal Transplant - Living Donor	Phase II
		Antibody Mediated Rejection (AMR) Presensitized Renal Transplant - Deceased Donor	Phase II
		Treatment of Antibody Mediated Rejection (AMR) Following Renal Transplantation*	Phase II
cPMP (ALXN 1101)	Metabolic Disorders	MoCD Type A	Phase II / III
ALXN 1007	Inflammatory Disorders	GI Graft versus Host Disease	Phase II
		Anti-phospholipid Syndrome	Phase II
SBC-103	Metabolic Disorders	Mucopolysaccharidoses IIIB (MPS IIIB)	Phase I / II
ALXN 1210	Next Generation Complement Inhibitor	Paroxysmal Nocturnal Hemoglobinuria (PNH)	Phase I / II
ALXN 5500	Next Generation Complement Inhibitor		Phase I

* Investigator sponsored clinical program

Soliris (eculizumab)

Neurology

Generalized Myasthenia Gravis (gMG)

gMG is an ultra-rare autoimmune syndrome characterized by complement activation leading to the failure of neuromuscular transmission. We have completed enrollment of patients in a Phase III multinational, placebo-controlled registration trial of eculizumab in patients with refractory generalized gMG. The FDA, EC and MHLW have granted orphan drug designation for eculizumab as a treatment for patients with gMG.

Neuromyelitis Optica Spectrum Disorder (NMOSD)

NMOSD is a severe and ultra-rare autoimmune disease of the central nervous system (CNS) that primarily affects the optic nerves and spinal cord. Enrollment and dosing are ongoing in a global, randomized, double-blind, placebo-controlled to evaluate eculizumab as a treatment for patients with relapsing NMOSD. The FDA, EC, and MHLW have each granted orphan designation for eculizumab as a treatment for patients with NMOSD.

Transplant

Delayed Kidney Transplant Graft Function (DGF)

DGF is the term used to describe the failure of a kidney or other organs to function immediately after transplantation due to ischemia-reperfusion and immunological injury. Enrollment is complete in a single, multinational, placebo-controlled DGF registration trial and patient follow-up is ongoing. Eculizumab has been granted orphan drug designation for DGF by the FDA and the EC granted orphan drug designation to eculizumab for prevention of DGF after solid organ transplantation.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Antibody Mediated Rejection (AMR) in Presensitized Kidney Transplant Patients

AMR is the term used to describe a type of transplant rejection that occurs when the recipient has antibodies to the donor organ. Enrollment in a multi-national, multi-center controlled clinical trial of eculizumab in presensitized kidney transplant patients at elevated risk for AMR who received kidneys from deceased organ donors was completed in March 2013 and patient follow-up in the trial is continuing. In September 2013, researchers presented positive preliminary data from the eculizumab deceased-donor AMR kidney transplant study. In May 2015, new data from the Phase II single-arm deceased-donor transplant trial of eculizumab in prevention of acute AMR was presented and was consistent with previous positive reports.

 In January 2015, we reported results from a randomized, open-label, multicenter Phase II clinical trial of eculizumab presensitized kidney transplant patients at an elevated risk of AMR who received kidneys from living donors. The primary composite endpoint of the trial did not reach statistical significance. Patient follow-up and data analyses are ongoing and based on discussions with regulators, we are developing plans for next steps for eculizumab in AMR.

The EC granted orphan drug designation to eculizumab for the prevention of graft rejection following solid organ transplantation.

cPMP (ALXN 1101)

Molybdenum Cofactor Deficiency (MoCD) Disease Type A (MoCD Type A)

MoCD Type A is an ultra-rare metabolic disorder characterized by severe and rapidly progressive neurologic damage and death in newborns. MoCD Type A results from a genetic deficiency in cyclic Pyranopterin Monophosphate (cPMP), a molecule that enables the function of certain enzymes and the absence of which allows neurotoxic sulfite to accumulate in the brain. To date, there is no approved therapy available for MoCD Type A. There has been some early clinical experience with the recombinant cPMP replacement therapy in a small number of children with MoCD Type A, and we have completed enrollment in a natural history study in patients with MoCD Type A. In October 2013, cPMP received Breakthrough Therapy Designation from the FDA for the treatment of patients with MoCD Type A. Evaluation of our synthetic form of cPMP replacement therapy in a Phase I healthy volunteer study is complete. In addition, we completed enrollment in a multi-center, multinational open-label clinical trial of synthetic cPMP in patients with MoCD Type A switched from treatment with recombinant cPMP. Activities have commenced for the Phase II/III pivotal open-label, single-arm trial of ALXN1101 for treatment-naïve neonates with MoCD Type A.

ALXN 1007

ALXN 1007 is a novel humanized antibody designed to target rare and severe inflammatory disorders and is a product of our proprietary antibody discovery technologies. We have completed enrollment in both a Phase I single-dose, dose escalating safety and pharmacology study in healthy volunteers, as well as in a multi-dose, dose escalating safety and pharmacology study in healthy volunteers. A proof-of-concept study in patients with an ultra-rare disorder, gastrointestinal graft versus host disease (GI-GVHD), is ongoing. Acute GI-GVHD is an immune-mediated disease and a complication of stem cell transplantation occurring in 10-12 percent of allogenic hematopoietic stem cell transplants. Patients with severe acute GI-GVHD have a 30-40 percent mortality rate within the first six months post-transplant. The study is evaluating patients with GI-GVHD following bone marrow or hematopoietic stem cell transplant experience engrafted hematopoietic cells that attack host gastrointestinal tissues in the first 100 days post-transplant causing damage to the GI tract, liver and skin. In December 2015, we announced that interim data from a Phase II study showed an overall 28 day acute GI-GVHD response rate of 80 percent and a 28 day complete response rate of 70 percent compared to historical response rates of 56 percent and 49 percent, respectively, which supports the continued advancement of ALXN 1007 in GI-GVHD.

In addition, enrollment in a Phase II proof-of-concept study in patients with non-criteria manifestations of anti-phospholipid syndrome (APS) was discontinued early due to recruitment difficulties. The study is ongoing for initially enrolled patients. APS is an ultra-rare autoimmune, hypercoagulable state caused by antiphospholipid antibodies.

SBC-103

Mucopolysaccharidosis IIIB (MPS IIIB)

MPS IIIB is a rare, devastating and life-threatening disease which typically presents in children during the first few years of life. Genetic mutations result in decreased activity of the alpha-N-acetyl-glucosaminidase (NAGLU) enzyme, which leads to a buildup of abnormal amounts of heparan sulfate (HS) in the brain and throughout the body. Over time, this unrelenting systemic accumulation of HS causes progressive and severe cognitive decline, behavioral problems, speech loss, increasing loss of mobility, and premature death. Current treatments are palliative for the behavioral problems, sleep disturbances, seizures, and other complications, and these treatments do not address the root cause of MPS IIIB or stop disease progression.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

SBC-103, a recombinant form of natural human NAGLU is designed to replace the missing (or deficient) NAGLU enzyme. SBC-103 was granted orphan drug designation by the FDA in April 2013 and by the European Medicines Agency (EMA) in June 2013. It received Fast Track designation by the FDA in January 2015. In June 2015, the first-in-human trial of patients with MPS IIIB reached its targeted enrollment of nine patients, and the trial is ongoing. In March 2016, researchers presented 24-week results from this study that showed a 26.2 percent mean reduction fin heparan sulfate in cerebrospinal fluid at the highest dose studied (3mg/kg every other week) in a Phase I/II study at six months. Further dose escalation of SBC-103 is now ongoing in this trial.

ALXN 1210

ALXN 1210 is a next-generation complement inhibitor in development for PNH and other indications. Phase I data from the first-in-human single-ascending dose study of ALXN 1210 was published in the journal Blood in December 2015. Results showed that ALXN 1210 was well-tolerated in healthy volunteers and the mean terminal half-life was extended to 32 days, compared to Soliris, which has a terminal half-life of 9 days. Based upon longer terminal half-life and healthy volunteer studies, ALXN 1210 is suitable for longer dosing intervals than Soliris. Enrollment has completed in a multiple-ascending dose study of ALXN 1210 to further evaluate the safety and efficacy of ALXN 1210. Preliminary data in a Phase I/II dose-escalating study showed a rapid reduction of lactate dehydrogenase (LDH) following the initial dose. Alexion also has initiated an open-label, multi-dose Phase II study of ALXN 1210 in patients with PNH that is designed to measure change in LDH levels and safety in several dosing cohorts and intervals evaluating monthly and longer dosing intervals.

Manufacturing

We currently rely on internal manufacturing facilities and third party contract manufacturers, including Lonza Group AG and its affiliates (Lonza) to supply clinical and commercial quantities of our commercial products and product candidates. Our internal manufacturing facilities include our Rhode Island manufacturing facility (ARIMF), and facilities in Massachusetts and Georgia. We also utilize third party contract manufacturers for other manufacturing services including purification, product filling, finishing, packaging, and labeling.

We have various agreements with Lonza through 2028, with remaining total non-cancellable commitments of approximately $1,134,661. If we terminate certain supply agreements with Lonza without cause, we will be required to pay for product scheduled for manufacture under our arrangements. Under an existing arrangement with Lonza, we also pay Lonza a royalty on sales of Soliris manufactured at ARIMF and a payment with respect to sales of Soliris manufactured at Lonza facilities. During 2015, we entered into a new supply agreement with Lonza whereby Lonza will construct a new manufacturing facility dedicated to Alexion manufacturing at its existing Portsmouth, New Hampshire facility.

In addition to Lonza, we have non-cancellable commitments of approximately $35,035 through 2019 with other third party manufacturers.

InMarch 2013, we received a Warning Letter (Warning Letter) from the FDA regarding compliance with current Good Manufacturing Practices (cGMP) at ARIMF. The Warning Letter followed receipt of a Form 483 Inspectional Observations by the FDA in connection with an FDA inspection that concluded in August 2012. The observations relate to commercial and clinical manufacture of Soliris at ARIMF. We responded to the Warning Letter in a letter to the FDA dated in April 2013. As previously announced, the FDA issued Form 483s in August 2014 and August 2015 relating to observations at ARIMF. The inspectional observations from the August 2015 letter have since been closed out by the FDA. The observations are inspectional and do not represent a final FDA determination of compliance. We continue to manufacture products, including Soliris, in this facility. While the resolution of the issues raised in the Warning Letter is difficult to predict, we do not currently believe a loss related to this matter is probable or that the potential magnitude of such loss or range of loss, if any, can be reasonably estimated.

In April 2014, we purchased a fill/finish facility in Athlone, Ireland.  Following refurbishment of the facility, and after successful completion of the appropriate validation processes and regulatory approvals, the facility will become our first company-owned fill/finish facility for our commercial and clinical products. In November 2015, the construction of office, laboratory and packaging facilities in Dublin, Ireland was completed. In May 2015, we announced plans to construct a new biologics manufacturing facility on our existing property in Dublin, Ireland, which is expected to be completed by 2020.

Critical Accounting Policies and the Use of Estimates

The significant accounting policies and basis of preparation of our consolidated financial statements are described in Note 1, “Business Overview and Summary of Significant Accounting Policies” of the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2015. Under accounting principles generally accepted in the United States, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities in our financial statements. Actual results could differ from those estimates.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

We believe the judgments, estimates and assumptions associated with the following critical accounting policies have the greatest potential impact on our consolidated financial statements:

• Revenue recognition;

• Contingent liabilities;

• Inventories;

• Share-based compensation;

• Valuation of goodwill, acquired intangible assets and in-process research and development (IPR&D);

• Valuation of contingent consideration; and

• Income taxes.

For a complete discussion of these critical accounting policies, refer to “Critical Accounting Policies and Use of Estimates” within “Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations” included within our Form 10-K for the year ended December 31, 2015.  We have reviewed our critical accounting policies as disclosed in our Form 10-K, and we have not noted any material changes.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new standard which amends revenue recognition principles and provides a single set of criteria for revenue recognition among all industries. The new standard provides a five step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in both interim and annual periods. The standard is effective for interim and annual periods beginning after December 15, 2017 and allows for adoption using a full retrospective method, or a modified retrospective method. Entities may elect to early adopt the standard for annual periods beginning after December 15, 2016. We are currently assessing the method of adoption and the expected impact the new standard has on our financial position and results of operations.

In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs. The new standard aligns the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs be presented as a direct deduction from the carrying amount of the related debt. We have adopted the provisions of this standard in the first quarter 2016 and reclassified $8,635 of deferred financing costs from other current assets to the current portion of long term debt and $26,714 other non current assets to the long-term debt, less current portion in our consolidated balance sheets as of December 31, 2015.

In April 2015, the FASB issued a new standard clarifying the accounting for a customer's fees paid in a cloud computing arrangement. Under this standard, if a cloud computing arrangement includes a software license, the customer would account for the software license consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer would account for the arrangement as a service contract. We adopted the provisions of this standard in the first quarter 2016. The adoption did not have a material effect on our financial condition or results of operations.

In February 2016, the FASB issued a new standard requiring that the rights and obligations arising from leases be recognized on the balance sheet by recording a right-of-use asset and corresponding lease liability. The new standard also requires qualitative and quantitative disclosures to understand the amount, timing, and uncertainty of cash flows arising from leases as well as significant management estimates utilized. The standard is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective adoption. We are currently assessing the impact of this standard on our financial condition and results of operations.

In March 2016, the FASB issued a new standard simplifying aspects of the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, statutory withholding requirements, and classification on the statement of cash flows. The standard is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We are currently assessing the impact of this standard on our financial condition and results of operations.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Results of Operations

Net Product Sales

Net product sales by product are as follows for the three months endedMarch 31, 2016 and 2015:

	Three months ended March 31,
	2016		2015		% Change
Net product sales:
Soliris	$	664,655	$	600,333	11	%
Strensiq	33,242		—		N/A
Kanuma	2,528		—		N/A
	$	700,425	$	600,333	17	%

The components of this increase in revenues are as follows:

Components of change:
Price	(2.0	)%
Volume	24.0	%
Foreign exchange	(5.0	)%
Total change in net product sales	17.0	%

The increase in net product sales for the three months endedMarch 31, 2016, as compared to the same period in 2015, was primarily due to an increase in unit volumes of 24.0%, due to increased demand globally for Soliris therapy for patients with PNH or aHUS during the respective periods and sales of Strensiq during 2016.

Price had a negative impact on net product sales of 2.0%for the three months endedMarch 31, 2016 due to increases in estimated rebates.

Foreign exchange had a negative impact of 5.0%for the three months endedMarch 31, 2016, as compared to the same period in 2015. The negative impact on foreign exchange of $30,143 or 5.0%, was due to changes in foreign currency exchange rates (inclusive of hedging activity) versus the U.S. dollar for the three months endedMarch 31, 2016. The negative impact was primarily due to the weakening of the Euro, Japanese Yen and Russian Ruble. Offsetting the impact of the stronger dollar, we recorded a gain in revenue of $22,812 and $29,082 related to our foreign currency cash flow hedging program for the three months endedMarch 31, 2016 and 2015, respectively. We expect the strong dollar compared to other currencies to continue to have a negative impact on revenue into 2016 compared to 2015.

Cost of Sales

Cost of sales includes manufacturing costs as well as actual and estimated royalty expenses associated with sales of Soliris.

The following table summarizes cost of sales for the three months endedMarch 31, 2016 and 2015:

	Three months ended March 31,
	2016			2015			Variance
Cost of sales	$	58,986		$	69,399		$	(10,413	)
Cost of sales as a percentage of net product sales	8.4		%	11.6		%	(3.2		)%

We recorded an expense of $24,352 in the first quarter of 2015 associated with a portion of a single manufacturing campaign at a third party manufacturer for Strensiq. The costs are comprised of raw materials, internal overhead and external production costs. This expense did not impact the clinical supply of inventory or the commercial launch of Strensiq.

Exclusive of the items mentioned above, cost of sales as a percentage of net product sales were 8.4% and 7.5% for the three months endedMarch 31,2016 and 2015.

Research and Development Expense

Our research and development expense includes personnel, facility and external costs associated with the research and development of our product candidates, as well as product development costs. We group our research and development expenses into two major categories: external direct expenses and all other research and development (R&D) expenses.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

External direct expenses are comprised of costs paid to outside parties for clinical development, product development and discovery research, as well as costs associated with strategic licensing agreements we have entered into with third parties. Clinical development costs are comprised of costs to conduct and manage clinical trials related to eculizumab and other product candidates. Product development costs are those incurred in performing duties related to manufacturing development and regulatory functions, including manufacturing of material for clinical and research activities. Discovery research costs are incurred in conducting laboratory studies and performing preclinical research for other uses of our products and other product candidates. Licensing agreement costs include upfront and milestone payments made in connection with strategic licensing arrangements we have entered into with third parties. Clinical development costs have been accumulated and allocated to each of our programs, while product development and discovery research costs have not been allocated.

All other R&D expenses consist of costs to compensate personnel, to maintain our facilities, equipment and overhead and similar costs of our research and development efforts. These costs relate to efforts on our clinical and preclinical products, our product development and our discovery research efforts. These costs have not been allocated directly to each program.

The following table provides information regarding research and development expenses:

	Three months ended
	March 31,				$
	2016		2015		Variance
Clinical development	$	49,858	$	30,947	$	18,911
Product development	29,981		19,540		10,441
Licensing agreements	3,050		112,500		(109,450		)
Discovery research	12,867		6,044		6,823
Total external direct expenses	95,756		169,031		(73,275		)
Payroll and benefits	71,356		44,338		27,018
Facilities and other costs	9,178		7,711		1,467
Total other R&D expenses	80,534		52,049		28,485
Research and development expense	$	176,290	$	221,080	$	(44,790	)

For the three months ended March 31, 2016, the decrease of $44,790 in research and development expense, as compared to the same period in the prior year, was primarily related to the following:

• Decrease of $109,450 in licensing agreement expenses primarily related to upfront payments made in the first quarter 2015.

Partially offset by the following:

• Increase of $18,911 in external clinical development expenses related primarily to an expansion of clinical studies for eculizumab, sebelipase alfa, ALXN 1210, and other programs (see table below).

• Increase of $10,441 in external product development expenses related primarily to an increase in costs associated with the manufacturing of material for increased clinical research activities and clinical studies as compared to the first quarter of 2015.

• Increase of $6,823 in discovery research expenses primarily related to increases in external research expenses associated with our license agreements.

• Increase of $27,018 in payroll and benefits expense primarily related to the additional headcount acquired as part of the Synageva acquisition in the second quarter 2015 and the continued global expansion of staff supporting our increasing number of clinical and development programs.

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(amounts in thousands except per share amounts)

The following table summarizes external direct expenses related to our clinical development programs. Please refer to "Clinical Development Programs" above for a description of each of these programs:

	Three months ended
	March 31,				$
	2016		2015		Variance
External direct expenses
Eculizumab	$	22,239	$	18,024	$	4,215
Asfotase alfa	4,927		4,851		76
cPMP	2,117		1,697		420
ALXN 1007	2,598		2,033		565
Sebelipase alfa	4,906		—		4,906
ALXN 1210	4,329		597		3,732
SBC-103	1,223		—		1,223
Other programs	2,966		606		2,360
Unallocated	4,553		3,139		1,414
	$	49,858	$	30,947	$	18,911

The successful development of our drug candidates is uncertain and subject to a number of risks. We cannot guarantee that results of clinical trials will be favorable or sufficient to support regulatory approvals for our other programs. We could decide to abandon development or be required to spend considerable resources not otherwise contemplated. For additional discussion regarding the risks and uncertainties regarding our development programs, please refer to Item 1A "Risk Factors" in this Form 10-Q.

Selling, General and Administrative Expense

Our selling, general and administrative expense includes commercial and administrative personnel, corporate facility and external costs required to support the marketing and sales of our commercialized products. These selling, general and administrative costs include: corporate facility operating expenses and depreciation; marketing and sales operations in support of our products; human resources; finance, legal, information technology and support personnel expenses; and other corporate costs such as telecommunications, insurance, audit, government affairs and our global corporate compliance program.

The table below provides information regarding selling, general and administrative expense:

	Three months ended
	March 31,				$
	2016		2015		Variance
Salary, benefits and other labor expense	$	148,170	$	124,103	$	24,067
External selling, general and administrative expense	84,391		63,013		21,378
Total selling, general and administrative expense	$	232,561	$	187,116	$	45,445

For the three months endedMarch 31, 2016, the increase of $45,445 in selling, general and administrative expense, as compared to the same period in the prior year, was related to the following:

• Increase in salary, benefits and other labor expenses of $24,067. The increase was a result of increased staff costs related to commercial development activities and increases in payroll and benefits within our general and administrative functions to support our infrastructure growth as a global commercial entity. The increase was also attributable to additional global commercial and general and administrative staff costs due to our acquisition of Synageva in the second quarter 2015.

• Increase in external selling, general and administrative expenses of $21,378. The increase was primarily due to an increase in external marketing costs to support the global launches of Strensiq and Kanuma and additional facilities costs as a result of continuing growth of operations worldwide.

Amortization of Purchase Intangible Assets

For the three months endedMarch 31, 2016, we recorded amortization expense of $80,094 primarily associated with intangible assets related to Strensiq and Kanuma, for which we received regulatory approval in the third quarter 2015.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Acquisition-related Costs

For the three months endedMarch 31, 2016 and 2015, acquisition-related costs associated with our business combinations included the following:

	Three months ended March 31,
	2016		2015
Transaction costs (1)	$	375	$	—
Integration costs	964		—
	$	1,339	$	—
(1) Transaction costs include investment advisory, legal, and accounting fees

Change in Fair Value of Contingent Consideration

For the three months endedMarch 31, 2016 and 2015, the change in fair value of contingent consideration expense associated with our prior business combinations was $(14,800) and $11,979, respectively. The decrease in the fair value of contingent consideration for the three months endedMarch 31, 2016 as compared the prior year was primarily due to decreases in the likelihood of payments for contingent consideration.

Restructuring Expenses

In connection with the acquisition and integration of Synageva in 2015 we recorded a benefit of $924 primarily related to changes in estimates for employee costs during the three months ended March 31, 2016. We expect to pay all remaining accrued amounts related to this restructuring activity by the end of 2016.

In the fourth quarter of 2014, we announced plans to relocate our European headquarters from Lausanne, Switzerland to Zurich, Switzerland. The relocation of our European headquarters supports our operational needs based on growth in the European region. For the three months ended March 31, 2016 we incurred additional restructuring costs of $1,646. We expect to pay all accrued amounts related to this restructuring activity in 2016.

Other Income and Expense

The following table provides information regarding other income and expense:

	Three months ended
	March 31,						$
	2016			2015			Variance
Investment income	$	1,551		$	2,884		$	(1,333	)
Interest expense	(23,890		)	(651		)	(23,239		)
Foreign currency gain	91			1,005			(914		)
Total other income and expense	$	(22,248	)	$	3,238		$	(25,486	)

The increase in interest expense the three months endedMarch 31, 2016 as compared to the prior year was due to us borrowing $3,500,000 under a term loan facility in connection with the acquisition of Synageva in the second quarter of 2015.

Income Taxes

During the three months endedMarch 31, 2016, we recorded an income tax provision of $51,432 and an effective tax rate of 35.8%, compared to an income tax provision of $15,622 and an effective tax rate of 14.6%for the three months endedMarch 31, 2015.

The tax provision for the three months endedMarch 31, 2016 and 2015 is attributable to the U.S. federal, state and foreign income taxes on our profitable operations. The increase in the effective tax rate for the three months endedMarch 31, 2016 as compared to the same period in the prior year is primarily attributable to the deferred tax cost associated with the distribution of earnings from our captive foreign partnership.

We continue to maintain a valuation allowance against certain other deferred tax assets where the realization is not certain. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of these deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized.

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

Financial Condition, Liquidity and Capital Resources

The following table summarizes the components of our financial condition as of March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015		$ Variance
Cash and cash equivalents	$	710,198	$	1,010,111	$	(299,913	)
Marketable securities	$	317,354	$	374,904	$	(57,550	)
Long-term debt (includes current portion)	$	3,281,250	$	3,456,250	$	(175,000	)
Current assets	$	2,127,509	$	2,416,714	$	(289,205	)
Current liabilities	603,613		709,615		(106,002		)
Working capital	$	1,523,896	$	1,707,099	$	(183,203	)

The decrease in cash and cash equivalents was primarily attributable to cash utilized to repurchase shares, principal payments on our term loan, purchases of property, plant, and equipment, and purchases of available for sale securities. Offsetting these decreases in cash were cash generated through operations and proceeds from the maturity or sale of available for sale securities.

We expect continued growth in our expenditures, particularly those related to research and product development, clinical trials, regulatory approvals, international expansion, commercialization of products and capital investment. However, we anticipate that cash generated from operations and our existing available cash, cash equivalents and marketable securities should provide us adequate resources to fund our operations as currently planned.

We have financed our operations and capital expenditures primarily through positive cash flows from operations. We expect to continue to be able to fund our operations, including principal and interest payments on our credit facility and contingent payments from our acquisitions principally through our cash flows from operations. We may, from time to time, also seek additional funding through a combination of equity or debt financings or from other sources, if necessary for future acquisitions or other strategic purposes.

Financial Instruments

Until required for use in the business, we may invest our cash reserves in money market funds, bank deposits, and high-quality marketable securities in accordance with our investment policy. The stated objectives of our investment policy is to preserve capital, provide liquidity consistent with forecasted cash flow requirements, maintain appropriate diversification and generate returns relative to these investment objectives and prevailing market conditions.

Financial instruments that potentially expose us to concentrations of credit risk are cash equivalents, marketable securities, accounts receivable and our foreign exchange derivative contracts. At March 31, 2016, three customers accounted for an aggregate of 44% of the accounts receivable balance, with these individual customers ranging from 12% to 19% of the accounts receivable balance. At December 31, 2015, three customers accounted for an aggregate of 51% of the accounts receivable balance, with these individual customers ranging from 14% to 22% of the accounts receivable balance. For the three months endedMarch 31, 2016, three customers accounted for an aggregate of 39% of our product sales, with these individual customers ranging from 11% to 16% of our product sales. For the three months endedMarch 31, 2015, three customers accounted for an aggregate of 39% of our product sales, with these individual customers ranging from 10% to 18% of our product sales.

We continue to monitor economic conditions, including volatility associated with international economies and the associated impacts on the financial markets and our business. A substantial portion of our accounts receivable due from these countries are due from or backed by sovereign or local governments, and the amount of non-sovereign accounts receivable is not material. Although collection of our accounts receivables from certain countries may extend beyond our standard credit terms, we do not expect any such delays to have a material impact on our financial condition or results of operations.

We manage our foreign currency transaction risk within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. As of March 31, 2016, we have foreign exchange forward contracts with notional amounts totaling $2,396,537. These outstanding foreign exchange forward contracts had a net fair value of $30,793, of which an unrealized gain of $93,589 is included in other assets, offset by an unrealized loss of $62,796 included in other liabilities. The counterparties to these foreign exchange forward contracts are large domestic and multinational commercial banks, and we believe the risk of nonperformance is not material.

At March 31, 2016, our financial assets and liabilities were recorded at fair value. We have classified our financial assets and liabilities as Level 1, 2 or 3 within the fair value hierarchy. Level 1 inputs are quoted prices (unadjusted) in active markets

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

for identical assets or liabilities. Our Level 1 assets consist of mutual fund investments. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, but substantially the full term of the financial instrument. Our Level 2 assets consist primarily of institutional money market funds, commercial paper, municipal bonds, U.S. and foreign government-related debt, corporate debt securities, certificates of deposit and foreign exchange forward contracts. Our Level 2 liabilities consist also of foreign exchange forward contracts. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. Our Level 3 liabilities consist of contingent consideration related to acquisitions.

Business Combinations and Contingent Consideration Obligations

 The purchase agreements for our business combinations include contingent payments totaling up to $826,000 that will become payable if and when certain development and commercial milestones are achieved.  Of these milestone amounts, $511,000 and $315,000 of the contingent payments relate to development and commercial milestones, respectively. We do not expect these amounts to have an impact on our liquidity in the near-term, and, during the next 12 months, we expect to make milestone payments of approximately $60,000, associated with our prior business combination. As additional future payments become probable, we will evaluate methods of funding payments, which could be made from available cash and marketable securities, cash generated from operations or proceeds from other financing.

Financing Lease Obligation

In November 2012, we entered into a lease agreement for office and laboratory space to be constructed in New Haven, Connecticut. Although we do not legally own the premises, we were deemed to be the owner of the building during the construction period based on applicable accounting guidance for build-to-suit leases due to our involvement during the construction period. Accordingly, the landlord's costs of constructing the facility were required to be capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in our consolidated balance sheet. Construction of the new facility was completed and the building was placed into service in the first quarter 2016. As of March 31, 2016 and December 31, 2015, our facility lease obligation related to this facility was $134,211 and $132,866,respectively.

During the third quarter 2015, we entered into a new agreement with Lonza whereby Lonza will construct a new manufacturing facility dedicated to Alexion at its existing Portsmouth, New Hampshire facility. As a result of our contractual right to full capacity of the new manufacturing facility, a portion of the payments under the agreement are considered to be lease payments and a portion as payment for the supply of inventory. Although we will not legally own the premises, we are deemed to be the owner of the manufacturing facility during the construction period based on applicable accounting guidance for build-to-suit leases due to our involvement during the construction period. As of March 31, 2016 and December 31, 2015, we recorded a construction-in-process asset of $42,652 and $19,259 and an offsetting facility lease obligation of $35,632 and $15,229 associated with the manufacturing facility, respectively.

License Agreements

Our license agreements include contingent payments that will become payable if and when certain development, regulatory and commercial milestones are achieved. We do not expect the payments associated with these milestones to have a significant impact on our liquidity in the near-term. During the next 12 months, we expect to make milestone payments related to our license agreements of approximately $60,000.

Long-term Debt

On June 22, 2015, Alexion entered into a credit agreement (the Credit Agreement) with a syndicate of banks, which provides for a $3,500,000 term loan facility and a $500,000 revolving facility. Borrowings under the term loan facility are payable in quarterly installments equal to 1.25% of the original loan amount, beginning December 31, 2015. Final repayment of the term loan and any draw down of revolving credit loans are due on June 22, 2020. In addition to borrowings in which prior notice is required, the revolving credit facility includes a sublimit of $100,000in the form of letters of credit and borrowings on same-day notice, referred to as swingline loans, of up to $25,000. Borrowings can be used for working capital requirements, acquisitions and other general corporate purposes.

In connection with the acquisition of Synageva in June 2015, we borrowed $3,500,000 under the term loan facility and $200,000 under the revolving facility, and we used our available cash for the remaining cash consideration. In June 2015, we repaid the revolving facility in full. As of March 31, 2016, we had $3,281,250 outstanding on the term loan. As of March 31, 2016, we had open letters of credit of $12,970, and our borrowing availability under the revolving facility was $487,030.  

Manufacturing Obligations

We have supply agreements with Lonza through 2028 relating to the manufacture of Soliris and Strensiq, which requires payments to Lonza at the inception of contract and upon the initiation and completion of product manufactured. On an ongoing

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Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

basis, we evaluate our plans for future levels of manufacturing by Lonza, which depends upon our commercial requirements, the progress of our clinical development programs and the production levels of ARIMF.

We have various agreements with Lonza, with remaining total non-cancellable commitments of approximately $1,134,661 through 2028. Certain commitments may be canceled only in limited circumstances. If we terminate certain supply agreements with Lonza without cause, we will be required to pay for product scheduled for manufacture under our arrangement. Under an existing arrangement with Lonza, we also pay Lonza a royalty on sales of Soliris manufactured at ARIMF and a payment with respect to sales of Soliris manufactured at Lonza facilities.

In addition to Lonza, we have non-cancellable commitments of approximately $35,035 through 2019 with other third party manufacturers.

Taxes

We do not record U.S. tax expense on the undistributed earnings of our controlled foreign corporation (CFC) subsidiaries. These earnings relate to ongoing operations and were approximately $1,012,000 at December 31, 2015. We intend to reinvest these earnings permanently outside the U.S. or repatriate the earnings only when it is tax efficient to do so. Accordingly, we believe that U.S. tax on any earnings that might be repatriated would be substantially offset by realizing the benefit of tax attributes, such as U.S. foreign tax credits or by utilizing deficits in the foreign earnings and profits account.

We do not have any present or anticipated future need for cash held by our CFCs, as cash generated in the U.S., as well as borrowings, are expected to be sufficient to meet U.S. liquidity needs for the foreseeable future. At March 31, 2016, approximately $445,000 of our cash and cash equivalents was held by foreign subsidiaries, a significant portion of which is required for liquidity needs of our foreign subsidiaries. These subsidiaries will settle any outstanding trade payables prior to having excess cash available which could be repatriated to our entities in the United States. While we intend to reinvest CFC earnings permanently outside the U.S. or repatriate the earnings only when it is tax efficient to do so, certain unforeseen future events could impact our permanent reinvestment assertion. Such events include acquisitions, corporate restructurings or tax law changes not currently contemplated.

Common Stock Repurchase Program

In November 2012, our Board of Directors authorized a share repurchase program. In May 2015, our Board of Directors increased the authorization to acquire shares with an aggregate value of up to 1,000,000 for future purchases under the repurchase program, which superseded all prior repurchase programs. The repurchase program does not have an expiration date, and we are not obligated to acquire a particular number of shares. The repurchase program may be discontinued at any time at the Company's discretion. We expect that cash generated from operations and our existing available cash and cash equivalents will be sufficient to fund any share repurchases.

Under the program, we repurchased 2,083 and 334 shares of our common stock at a cost of $296,515 and $60,026 during the three months endedMarch 31, 2016 and 2015, respectively. As of March 31, 2016, there is a total of $459,349 remaining for repurchases under the program.

Subsequent to March 31, 2016, we repurchased 245 shares of our common stock under our repurchase program at a cost of $34,136. As of April 29, 2016, there is a total of $425,213 remaining for repurchases under the repurchase program.

Cash Flows

The following summarizes our net change in cash and cash equivalents:

	Three months ended March 31,
	2016			2015			$ Variance
Net cash provided by operating activities	$	167,984		$	23,034		$	144,950
Net cash used in investing activities	(5,665		)	(48,423		)	42,758
Net cash (used in) provided by financing activities	(466,257		)	5,074			(471,331		)
Effect of exchange rate changes on cash	4,025			(6,870		)	10,895
Net change in cash and cash equivalents	$	(299,913	)	$	(27,185	)	$	(272,728	)

Operating Activities

Cash flows provided by operations for the three months endedMarch 31, 2016 were $167,984 compared to $23,034for the three months endedMarch 31, 2015. The increase was primarily due to an increase in gross margin on product sales of $111,118 resulting primarily from an increase in global demand for Soliris and a decrease in cash outflows related to our

35

Alexion Pharmaceuticals, Inc.

(amounts in thousands except per share amounts)

licensing arrangements of $109,450, offset by an increase in clinical development costs and selling, general and administrative expenses during 2016.

We expect increases in cash flow from operations which will be highly dependent on sales levels, and the related cash collections from sales of our products. We also expect additional cash outflows of approximately $60,000 over the next 12 months related to milestone payments on our license agreements.

Investing Activities

Cash used for investing activities for the three months endedMarch 31, 2016 were $5,665 compared to $48,423for the three months endedMarch 31, 2015. The decrease in cash used was primarily due to the following:

• Proceeds from the maturity or sale of available-for-sale marketable securities of $269,495for the three months endedMarch 31, 2016, compared to $176,256for the three months endedMarch 31, 2015.

Partially offset by the following:

• Purchases of available-for-sale marketable securities of $207,996for the three months endedMarch 31, 2016, compared to $166,319for the three months endedMarch 31, 2015.

• Purchases of property, plant and equipment of $64,204 during the three months ended March 31, 2016, compared to $57,075for the three months endedMarch 31, 2015 due to increased capital spending associated with the construction of our New Haven headquarters and our manufacturing facility in Ireland.

We expect to continue to have significant spending on property, plant and equipment during 2016 related to the construction of our new biologics manufacturing facility in Ireland.

Financing Activities

Cash flows (used in) provided by financing activities for the three months endedMarch 31, 2016 were $(466,257) compared to $5,074for the three months endedMarch 31, 2015. The decrease was primarily due to the following:

• Principal payments of $175,000 during the three months ended March 31, 2016 related to our credit facility.

• Repurchases of common stock of $296,515for the three months endedMarch 31, 2016, compared to $60,026for the three months endedMarch 31, 2015.

Partially offset by the following:

• Change in excess tax benefits from stock options attributable to the utilization of the excess tax benefit portion of federal and state net operating losses and tax credits of $5,917for the three months endedMarch 31, 2016, compared to $52,521for the three months endedMarch 31, 2015, due to the utilization of the Synageva federal non-excess tax benefit net operating loss carryforwards during the first quarter 2016.

• Proceeds from the issuance of stock for share-based compensation arrangements of $3,433for the three months endedMarch 31, 2016, compared to $24,882for the three months endedMarch 31, 2015.

Contractual Obligations

The disclosure of payments we have committed to make under our contractual obligations are summarized in our Annual Report on Form 10-K for the twelve months ended December 31, 2015, in the section titled “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Contractual Obligations.”

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

(amounts in thousands, except percentages)

Interest Rate Risk

As of March 31, 2016, we invested our cash in a variety of financial instruments, principally money market funds, corporate bonds, municipal bonds, commercial paper and government-related obligations. Most of our interest-bearing securities are subject to interest rate risk and could decline in value if interest rates fluctuate. Our investment portfolio is comprised of marketable securities of highly rated financial institutions and investment-grade debt instruments, and we have guidelines to limit the term to maturity of our investments. Based on the type of securities we hold, we do not believe a change in interest rates would have a material impact on our financial statements. If interest rates were to increase or decrease by 1%, the fair value of our investment portfolio would (decrease) increase by approximately $(4,531) and $4,103, respectively.

36

In June 2015, we entered into the Credit Agreement with interest at a rate per annum equal to either a base rate or a Eurodollar rate plus, in each case, an applicable margin. The applicable margins on base rate loans range from 0.25% to 1.00% and the applicable margins on Eurodollar loans range from 1.25% to 2.00%, in each case depending upon our consolidated net leverage ratio (as calculated in accordance with the Credit Agreement). Changes in interest rates related to the Credit Agreement could have a material effect on our financial statements. As of March 31, 2016, we had approximately $3,281,250 of variable rate debt outstanding. If interest rates were to increase or decrease by 1% for the year, annual interest expense would increase or decrease by approximately $32,813.

Foreign Exchange Market Risk

Our operations include activities in many countries outside the United States, including countries in Europe, Latin America and Asia Pacific.  As a result, our financial results are impacted by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets where we operate.  We have exposure to movements in foreign currency exchange rates, the most significant of which are the Euro and Japanese Yen, against the U.S. dollar.  We are a net receiver of many foreign currencies, and our consolidated financial results benefit from a weaker U.S. dollar and are adversely impacted by a stronger U.S. dollar relative to foreign currencies in which we sell our product. 

Our monetary exposures on our balance sheet arise primarily from cash, accounts receivable, intercompany receivables and payables denominated in foreign currencies.  Approximately 52% of our product sales were denominated in foreign currencies during the three months endedMarch 31, 2016, and our revenues are also exposed to fluctuations in the foreign currency exchange rates over time.  In certain foreign countries, we may sell in U.S. dollar, but our customers may be impacted adversely in fluctuations in foreign currency exchange rates which may also impact the timing and amount of our revenue.

Both positive and negative impacts to our international product sales from movements in foreign currency exchange rates are only partially mitigated by the natural, opposite impact that foreign currency exchange rates have on our international operating expenses.  Additionally, we have operations based in Switzerland and Ireland, and accordingly, our expenses are impacted by fluctuations in the value of the Swiss Franc and Euro against the U.S. dollar.

We currently have a derivative program in place to achieve the following: 1) limit the foreign currency exposure of our monetary assets and liabilities on our balance sheet, using contracts with durations of up to 90 days and 2) hedge a portion of our forecasted product sales (in some currencies), including intercompany sales, using contracts with durations of up to 60 months. The objectives of this program are to reduce the volatility of our operating results due to fluctuation of foreign exchange and to increase the visibility of the foreign exchange impact on forecasted revenues. This program utilizes foreign exchange forward contracts intended to reduce, not eliminate, the volatility of operating results due to fluctuations in foreign exchange rates.

As of March 31, 2016 and December 31, 2015, we held foreign exchange forward contracts with notional amounts totaling $2,396,537 and $2,535,490, respectively. As of March 31, 2016 and December 31, 2015, our outstanding foreign exchange forward contracts had a net fair value of $30,793 and $147,633, respectively. The decrease in the net fair value of outstanding foreign exchange forward contracts is primarily due to the decrease in strength of the U.S. dollar as of March 31, 2016 as compared to December 31, 2015.

We do not use derivative financial instruments for speculative trading purposes. The counterparties to these foreign exchange forward contracts are large domestic and multinational commercial banks. We believe the risk of counterparty nonperformance is not material.

Based on our foreign currency exchange rate exposures at March 31, 2016, a hypothetical 10% adverse fluctuation in exchange rates would decrease the fair value of our foreign exchange forward contracts that are designated as cash flow hedges by approximately $206,485 at March 31, 2016. The resulting loss on these forward contracts would be offset by the gain on the underlying transactions and therefore would have minimal impact on future anticipated earnings and cash flows. Similarly, adverse fluctuations in exchange rates that would decrease the fair value of our foreign exchange forward contracts that are not designated as hedge instruments would be offset by a positive impact of the underlying monetary assets and liabilities.

Credit Risk

As a result of our foreign operations, we are exposed to changes in the general economic conditions in the countries in which we conduct business.A substantial portion of our accounts receivable due from these countries are due from or backed by sovereign or local governments, and the amount of non-sovereign accounts receivable is not material.We continue to monitor economic conditions, including volatility associated with international economies and the associated impacts on the financial markets and our business. Although collection of our accounts receivables from certain countries may extend beyond our credit terms, we do not expect any such delays to have a material impact on our financial condition or results of operations.

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Item 4. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of March 31, 2016. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2016, our disclosure controls and procedures were effective to provide reasonable assurance that information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, and ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

There has been no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

In May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the SEC requesting information related to our grant-making activities and compliance with the FCPA in various countries. In addition, in October 2015, Alexion received a request from the DOJ for the voluntary production of documents and other information pertaining to Alexion's compliance with the FCPA. The SEC and DOJ also seek information related to Alexion’s recalls of specific lots of Soliris and related securities disclosures. Alexion is cooperating with these investigations. At this time, Alexion is unable to predict the duration, scope or outcome of these investigations. Given the ongoing nature of these investigations, management does not currently believe a loss related to these matters is probable or that the potential magnitude of such loss or range of loss, if any, can be reasonably estimated.

Item 1A. Risk Factors.

(amounts in thousands, except percentages)

You should carefully consider the following risk factors before you decide to invest in Alexion and our business because these risk factors may have a significant impact on our business, operating results, financial condition, and cash flows. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occurs, our business, financial condition and results of operations could be materially and adversely affected.

Risks Related to Our Products

We depend heavily on the success of our lead product, Soliris. If we are unable to increase sales of Soliris, or sales of Soliris are adversely affected, our business may be materially harmed.

Currently, our ability to generate revenues depends primarily on the commercial success of Soliris and whether physicians, patients and health care payers view Soliris as therapeutically effective and safe relative to cost. Since we launched Soliris in the United States in 2007, substantially all of our revenue has been attributed to sales of Soliris. In 2015, we received marketing approval in the United States, the European Union and Japan, of our second marketed product, Strensiq, for the treatment of HPP. We also received marketing approval in 2015 in the United States and the European Union for our third product, Kanuma, for the treatment of LAL-D. However, we anticipate that Soliris product sales will continue to contribute a significant percentage of our total revenue over the next several years.

The commercial success of Soliris and our ability to generate and increase revenues depends on several factors, as discussed in greater detail below, including safety and efficacy of Soliris, coverage or reimbursement by government or third-party payers, pricing, manufacturing and uninterrupted supply, the introduction of and success of competing products, the size of patient populations and the number of patients diagnosed who may be treated with Soliris, adverse legal, administrative, regulatory or legislative developments, and our ability to develop, register and commercialize Soliris for new indications.

If we are not able to increase revenues from sales of Soliris, or our revenues do not grow as anticipated, our results of operations and stock price could be adversely affected.

Our future commercial success depends on gaining regulatory approval for new products and obtaining approvals for existing products for new indications.

Our long-term success and revenue growth will depend upon the successful development of new products and technologies from our research and development activities, including those licensed or acquired from third parties and approval of additional indications for our existing products. Product development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. The process for obtaining regulatory approval to market a biologic is expensive, often takes many years, and can vary substantially based on the type, complexity, and novelty of the product candidates involved. Our ability to grow revenues would be adversely affected if we are delayed or unable to successfully develop the products in our pipeline, including Soliris for additional indications, obtain marketing approval for Strensiq and Kanuma in additional territories or acquire or license products and technologies from third parties.

We dedicate significant resources to the worldwide development, manufacture and commercialization of our products. We cannot guarantee that any marketing application for our product candidates will be approved or maintained in any country where we seek marketing authorization. If we do not obtain regulatory approval of new products or additional indications for existing products, or are significantly delayed or limited in doing so, our revenue growth will be adversely affected, we may experience surplus inventory, our business may be materially harmed and we may need to significantly curtail operations.

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Sales of our products depend on reimbursement by government health administration authorities, private health insurers and other organizations. If we are unable to obtain, or maintain at anticipated levels, reimbursement for our products, or coverage is reduced, our pricing may be affected or our product sales, results of operations or financial condition could be harmed.

We may not be able to sell our products on a profitable basis or our profitability may be reduced if we are required to sell our products at lower than anticipated prices or reimbursement is unavailable or limited in scope or amount. Our products are significantly more expensive than traditional drug treatments and almost all patients require some form of third party coverage to afford their cost. We depend, to a significant extent, on governmental payers, such as Medicare and Medicaid in the United States or country specific governmental organizations in foreign countries, and private third-party payers to defray the cost of our products to patients. These entities may refuse to provide coverage and reimbursement, determine to provide a lower level of coverage and reimbursement than anticipated, or reduce previously approved levels of coverage and reimbursement, including in the form of higher mandatory rebates or modified pricing terms.

 In certain countries where we sell or are seeking or may seek to commercialize our products, pricing, coverage and level of reimbursement of prescription drugs are subject to governmental control. We may be unable to timely or successfully negotiate coverage, pricing, and reimbursement on terms that are favorable to us, or such coverage, pricing, and reimbursement may differ in separate regions in the same country. In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country, which may include a combination of distinct potential payers, including private insurance and governmental payers and a HTA assessment of medicinal products for pricing and reimbursement methodologies. Therefore, we may not successfully conclude the necessary processes and commercialize our products in every, or even most countries in which we seek to sell our products.

A significant reduction in the amount of reimbursement or pricing for our products in one or more countries may reduce our profitability and adversely affect our financial condition. Certain countries establish pricing and reimbursement amounts by reference to the price of the same or similar products in other countries. If coverage or the level of reimbursement is limited in one or more countries, we may be unable to obtain or maintain anticipated pricing or reimbursement in current or new territories. In the United States, the European Union member states, and elsewhere, there have been, and we expect there will continue to be, efforts to control and reduce health care costs. In the U.S. for example, the price of drugs has come under intense scrutiny by the U.S. Congress. Third party payers decide which drugs they will pay for and establish reimbursement and co-payment levels. Government and other third-party payers are increasingly challenging the prices charged for health care products, examining the cost effectiveness of drugs in addition to their safety and efficacy, and limiting or attempting to limit both coverage and the level of reimbursement for prescription drugs. See additional discussion below under the headings "Changes in healthcare law and implementing regulations, including those based on recently enacted legislation, as well as changes in healthcare policy and government initiatives that affect coverage and reimbursement of drug products may impact our business in ways that we cannot currently predict and these changes could adversely affect our business and financial condition" and "The credit and financial market conditions may aggravate certain risks affecting our business."

The potential increase in the number of patients receiving Soliris may cause third-party payers to modify or limit coverage or reimbursement for Soliris for the treatment of PNH, aHUS, or both indications. To the extent we are successful in developing Soliris for indications other than PNH and aHUS, the potential increase in the number of patients receiving Soliris may cause third-party payers to refuse coverage or reimbursement for Soliris for the treatment of PNH, aHUS or for any other approved indication, or provide a lower level of coverage or reimbursement than anticipated or currently in effect.

Health insurance programs may restrict coverage of some products by using payer formularies under which only selected drugs are covered, variable co-payments that make drugs that are not preferred by the payer more expensive for patients, and by using utilization management controls, such as requirements for prior authorization or failure on another type of treatment. Payers may especially impose these obstacles to coverage for higher-priced drugs, and consequently our products may be subject to payer-driven restrictions. Additionally, U.S. payers are increasingly considering new metrics as the basis for reimbursement rates.

In countries where patients have access to insurance, their insurance co-payment amounts or other benefit limits may represent a barrier to obtaining or continuing Soliris. We have financially supported non-profit organizations that assist patients in accessing treatment for PNH and aHUS, including Soliris. Such organizations assist patients whose insurance coverage imposes prohibitive co-payment amounts or other expensive financial obligations. Such organizations' ability to provide assistance to patients is dependent on funding from external sources, and we cannot guarantee that such funding will be provided at adequate levels, if at all. We have also provided our products without charge to patients who have no insurance coverage for drugs through related charitable purposes. We are not able to predict the financial impact of the support we may provide for these and other charitable purposes; however, substantial support could have a material adverse effect on our profitability in the future.

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Our commercial success depends on obtaining and maintaining reimbursement at anticipated levels reimbursement for our products. It may be difficult to project the impact of evolving reimbursement mechanics on the willingness of payers to cover our products. If we are unable to obtain or maintain coverage, or coverage is reduced in one or more countries, our pricing may be affected or our product sales, results of operations or financial condition could be harmed.

We may not be able to maintain market acceptance of our products among the medical community or patients, or gain market acceptance of our products in the future, which could prevent us from maintaining profitability or growth.

We cannot be certain that our products will maintain market acceptance in a particular country among physicians, patients, health care payers, and others. Although we have received regulatory approval of our products in certain territories, such approvals do not guarantee future revenue. We cannot predict whether physicians, other health care providers, government agencies or private insurers will determine or continue to accept that our products are safe and therapeutically effective relative to its cost. Physicians' willingness to prescribe, and patients' willingness to accept, our products, depends on many factors, including prevalence and severity of adverse side effects in both clinical trials and commercial use, the timing of the market introduction of competitive drugs, lower demonstrated clinical safety and efficacy compared to other drugs, perceived lack of cost-effectiveness, pricing and lack of availability of reimbursement from third-party payers, convenience and ease of administration, effectiveness of our marketing strategy, publicity concerning the product, our other product candidates and availability of alternative treatments, including bone marrow transplant as an alternative treatment for PNH. The likelihood of physicians to prescribe Soliris for patients with aHUS may also depend on how quickly Soliris can be delivered to the hospital or clinic and our distribution methods may not be sufficient to satisfy this need. In addition, we are aware that medical doctors have determined not to continue Soliris treatment for some patients with aHUS.

If our products fail to achieve or maintain market acceptance among the medical community or patients in a particular country, we may not be able to market and sell our products successfully in such country, which would limit our ability to generate revenue and could harm our overall business.

Manufacturing issues at our facilities or the facilities of our third party service providers could cause product shortages, stop or delay commercialization of our products, disrupt or delay our clinical trials or regulatory approvals, and adversely affect our business.

The manufacture of our products and our product candidates is highly regulated, complex and difficult, requiring a multi-step controlled process and even minor problems or deviations could result in defects or failures. We have limited experience manufacturing commercial quantities of Strensiq and Kanuma. Only a small number of companies have the ability and capacity to manufacture our products for our development and commercialization needs. Due to the highly technical requirements of manufacturing our products and the strict quality and control specifications, we and our third party providers may be unable to manufacture or supply our products despite our and their efforts. Failure to produce sufficient quantities of our products and product candidates could result in lost revenue, diminish our profitability, delay the development of our product candidates, or result in supply shortages for our patients, which may lead to lawsuits or could accelerate introduction of competing products to the market.

The manufacture of our products and product candidates is at high risk of product loss due to contamination, equipment malfunctions, human error, or raw material shortages. Deviations from established manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our products or manufacturing facilities, we may need to close our manufacturing facilities for an extended period of time to investigate and remediate the contaminant. The occurrence of any such event could adversely affect our ability to satisfy demand for any of our products, which could materially and adversely affect our operating results.

Many additional factors could cause production interruptions at our facilities or at the facilities of our third party providers, including natural disasters, labor disputes, acts of terrorism or war. The occurrence of any such event could adversely affect our ability to satisfy demand for Soliris, which could materially and adversely affect our operating results.

We expect that the demand for Soliris will increase. We may underestimate demand for Soliris or any of our products, or experience product interruptions at Alexion's internal manufacturing facilities or a facility of a third party provider, including as a result of risks and uncertainties described in this report.

We and our third party providers are required to maintain compliance with cGMP and other stringent requirements and are subject to inspections by the FDA and comparable agencies in other jurisdictions to confirm such compliance. Any delay, interruption or other issues that arise in the manufacture, fill-finish, packaging, or storage of our products as a result of a failure of our facilities or the facilities or operations of third parties to pass any regulatory agency inspection could significantly impair our ability to supply our products and product candidates. Significant noncompliance could also result in the imposition of monetary penalties or other civil or criminal sanctions and damage our reputation.

We rely on one to two facilities to manufacture each of our products. We are authorized to sell Soliris that is manufactured by Lonza and at ARIMF in the United States, the European Union, Japan and certain other territories. However,

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manufacturing Soliris for commercial sale in certain other territories may only be performed at a single facility until such time as we have received the required regulatory approval for an additional facility, if ever. We will continue to depend entirely on one facility to manufacture Soliris for commercial sale in such other territories until that time. We also depend entirely on one facility to manufacture Strensiq and on one facility for the purification of Kanuma for commercial sale. Regarding Kanuma, we rely on two animal facilities to produce the starting material, and a single manufacturing facility to manufacture the drug product.

We depend on a very limited number of third party providers for supply chain services with respect to our clinical and commercial product requirements, including product filling, finishing, packaging, and labeling. Our third party providers operate as independent entities and we do not have control over any third party provider's compliance with our internal or external specifications or the rules and regulations of regulatory agencies, including the FDA, competent authorities of the EU member states, or any other applicable regulations or standards.

Any difficulties or delays in our third party manufacturing, or any failure of our third party providers to comply with our internal and external specifications or any applicable rules, regulations and standards could increase our costs, constrain our ability to satisfy demand for our products from customers, cause us to lose revenue or incur penalties for failure to deliver product, make us postpone or cancel clinical trials, or cause our products to be recalled or withdrawn, such as the voluntary recalls that we initiated in 2013 and 2014 due to the presence of visible particles in a limited number of vials in specific lots. Even if we are able to find alternatives they may ultimately be insufficient for our needs. No guarantee can be made that regulators will approve additional third party providers in a timely manner or at all, or that any third party providers will be able to perform services for sufficient product volumes for any country or territory. Further, due to the nature of the current market for third-party commercial manufacturing, many arrangements require substantial penalty payments by the customer for failure to use the manufacturing capacity for which it contracted. Penalty payments under these agreements typically decrease over the life of the agreement, and may be substantial initially and de minimis or non-existent in the final period. The payment of a substantial penalty could harm our financial condition.

It can take longer than five years to build and validate a new manufacturing facility and it can take longer than three years to qualify and validate a new contract manufacturer. We are currently completing the build-out of a fill-finish facility in Ireland to support global distribution of Soliris and Alexion's other clinical and commercial products. To date, we have relied entirely on third party fill-finish providers and have never operated our own fill-finish facility. We also completed construction of a new facility in Dublin, Ireland in the fourth quarter of 2015, which is comprised of laboratories, packaging and warehousing operations and we intend to make significant further investment in this facility for the manufacture our products. We cannot guarantee that we will be able to successfully and timely complete the appropriate validation processes or obtain the necessary regulatory approvals, or that we will be able to perform the intended supply chain services at either of these facilities for commercial or clinical use.

Certain of the raw materials required in the manufacture and the formulation of our products are derived from biological sources. Such raw materials are difficult to procure and may be subject to contamination or recall. Access to and supply of sufficient quantities of raw materials which meet the technical specifications for the production process is challenging, and often limited to single-source suppliers. Finding an alternative supplier could take a significant amount of time and involve significant expense due to the nature of the products and the need to obtain regulatory approvals. The failure of these single-source suppliers to supply adequate quantities of raw materials for the production process in a timely manner may impact our ability to produce sufficient quantities of our products for clinical or commercial requirements. A material shortage, contamination, recall, or restriction on the use of certain biologically derived substances or any raw material used in the manufacture of our products could adversely impact or disrupt manufacturing.

In addition, Kanuma is a transgenic product. It is produced in the egg whites of genetically modified chickens who receive copies of the human lysosomal acid lipase gene to produce recombinant human lysosomal acid lipase. The facilities on which we rely to produce raw material for recombinant lysosomal acid lipase are the only animal facilities in the world that produces the necessary egg whites from transgenic chickens.  Natural disasters, disease, such as exotic Newcastle disease or avian influenza, or other catastrophic events could have a significant impact on the supply of unpurified Kanuma, or destroy Alexion’s animal operations altogether. If our animal operations are disrupted or destroyed, it will be extremely difficult to set up another animal facility to supply the unpurified Kanuma.  This would adversely affect our ability to satisfy demand for Kanuma, which could materially and adversely affect our operating results.

Any adverse developments affecting our manufacturing operations or the operations of our third-party providers could result in a product shortage of clinical or commercial requirements, withdrawal of our product candidates or any approved products, shipment delays, lot failures, or product withdrawals or recalls. We may also have to write-off inventory and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Such manufacturing issues could increase our cost of goods, cause us to lose revenue, reduce our profitability or damage our reputation.

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We operate in a highly regulated industry and if we or our third party providers fail to comply with United States and foreign regulations, we or our third party providers could lose our approvals to market our products or our product candidates, and our business would be seriously harmed.

We and our current and future partners, contract manufacturers and suppliers are subject to rigorous and extensive regulation by governmental authorities around the world, including the FDA, EMA, the competent authorities of the European Union member states, and MHLW. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or in the case of Kanuma, problems with animal operations, a regulatory agency may impose restrictions on that product, the manufacturing facility or us. For example, in March 2013, we received a Warning Letter from the FDA relating to compliance with FDA’s cGMP requirements at ARIMF. We are working with the FDA to resolve the issues identified in the Warning Letter. Failure to address the FDA’s concerns may lead the FDA or other regulatory authorities to take regulatory action, including fines, civil penalties, recalls, seizure of product, suspension of manufacturing operations, operating restrictions, injunctions, withdrawal of FDA approval, and/or criminal prosecution.

If we do not resolve outstanding concerns expressed by the FDA in the Warning Letter and the Form 483s to the satisfaction of the FDA, EMA or any other regulatory agency, or we or our third-party providers, including our product fill-finish providers, packagers and labelers, fail to comply fully with applicable regulations, then we may be required to initiate a recall or withdrawal of our products. Like our contract manufacturers’ manufacturing operations, our animal operations will also be subject to FDA inspection to evaluate whether our animal husbandry, containment, personnel, and record keeping practices are sufficient to ensure safety and security of our transgenic chickens and animal products (e.g., eggs, waste, etc.). Our animal operations may also be subject to inspection by the United States Department of Agriculture, Animal and Plant Health Inspection Service (USDA APHIS), the agency responsible for administering the Animal Welfare Act. Any failure to ensure safety and security of our transgenic chickens and/or animal products could result in regulatory action by the FDA or another regulatory body, including USDA APHIS.

The safety profile of any product continues to be closely monitored by the FDA and other foreign regulatory authorities after approval. Regulations continue to apply after product approval, and cover, among other things, testing, manufacturing, quality control, finishing, filling, labeling, advertising, promotion, risk mitigation, adverse event reporting requirements, and export of biologics. For example, the risk management program established in 2007 upon the FDA's approval of Soliris for the treatment of PNH was replaced with a Risk Evaluation and Mitigation Strategy (REMS) program, approved by the FDA in 2010, and further revised in December 2015 concerning prescribing information regarding the level of fever needed to seek medical attention and reporting adverse events. Future changes to the Soliris REMS could be costly and burdensome to implement.

 We are required to report any serious and unexpected adverse experiences and certain quality problems with our products to the FDA, the EMA, and other health agencies. We or any health agency may have to notify health care providers of any such developments. Non-compliance with safety reporting requirements could result in regulatory action that may include civil action or criminal penalties. Regulatory agencies inspect our pharmacovigilance processes, including our adverse event reporting. If regulatory agencies determine that we or other parties, including clinical trial investigators, have not complied with the applicable reporting or other pharmacovigilance requirements, we may become subject to additional inspections, warning letters or other enforcement actions, including monetary fines, marketing authorization withdrawal and other penalties.

As a condition of approval for marketing our products, governmental authorities may require us to conduct additional studies. In connection with the approval of Soliris in the United States, EU and Japan, for the treatment of PNH, we agreed to establish a PNH Registry, monitor immunogenicity, monitor compliance with vaccination requirements, and determine the effects of anticoagulant withdrawal among PNH patients receiving eculizumab, and, specifically in Japan, we agreed to conduct a trial in a limited number of Japanese PNH patients to evaluate the safety of a meningococcal vaccine. In connection with the approval of Soliris in the United States for the treatment of aHUS, we agreed to establish an aHUS Registry and complete additional human clinical studies in adult and pediatric patients. Furthermore, in connection with the approval of Strensiq in the United States, we agreed to conduct a prospective observational study in treated patients to assess the long-term safety of Strensiq therapy and to develop complementary assays. Similarly, in connection with the approval of Kanuma in the United States, we have agreed to conduct a long-term observational study of treated patients, either as a standalone study or as a component of the existing LAL Registry. In the EU, in connection with the grant of authorization for Strensiq, we agreed to conduct a multicenter, randomized, open-label, Phase 2a study of Strensiq in patients with HPP and to extend the studies ENB-008-10 and ENB-009-10 to provide efficacy data in patients 13 to 18 year-old of age. We also agreed to set up an observational, longitudinal, prospective, long-term registry of patients with HPP to collect information on the epidemiology of the disease, including clinical outcomes and quality of life, and to evaluate safety and effectiveness data in patients treated with Strensiq. In the United States, the FDA can also propose to withdraw approval for a product if it determines that such additional studies are inadequate or if new clinical data or information shows that a product is not safe for use in an approved indication.

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Failure to comply with the laws and requirements, including statutes and regulations, administered by the FDA, the EC, the competent authorities of the European Union member states, the MHLW or other agencies, including without limitation, failures or delays in resolving the concerns raised by the FDA in the Warning Letter, could result in:

• a product recall;

• a product withdrawal;

• significant administrative and judicial sanctions, including, warning letters or untitled letters;

• significant fines and other civil penalties;

• suspension, variation or withdrawal of a previously granted approval for Soliris;

• interruption of production;

• operating restrictions, such as a shutdown of production facilities or production lines, or new manufacturing requirements;

• suspension of ongoing clinical trials;

• delays in approving or refusal to approve our products including pending BLAs or BLA supplements for our products or a facility that manufactures our products;

• seizing or detaining product;

• requiring us or our partners to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

• injunctions; and/or

• criminal prosecution.

If the use of our products harms people, or is perceived to harm patients even when such harm is unrelated to our products, our regulatory approvals could be revoked or otherwise negatively impacted and we could be subject to costly and damaging product liability claims.

The testing, manufacturing, marketing and sale of drugs for use in humans exposes us to product liability risks. Side effects and other problems from using our products could (1) lessen the frequency with which physicians decide to prescribe our products, (2) encourage physicians to stop prescribing our products to their patients who previously had been prescribed our products, (3) cause serious adverse events and give rise to product liability claims against us, and (4) result in our need to withdraw or recall our products from the marketplace. Some of these risks are unknown at this time.

Our products and our product candidates treat patients with ultra-rare diseases. We generally test our products in only a small number of patients. For example, the FDA marketing approval for the treatment of patients with aHUS was based on two prospective studies in a total of 37 adult and adolescent patients, together with a retrospective study that included 19 pediatric patients. As more patients use our products, including more children and adolescents, new risks and side effects may be discovered, the rate of known risks or side effects may increase, and risks previously viewed as less significant could be determined to be significant. Previously unknown risks and adverse effects may also be discovered in connection with unapproved uses of our products, which may include administration of our products under acute emergency conditions, such as the Enterohemorrhagic E. coli health crisis in Europe, primarily Germany, which began in May 2011. We do not promote, or in any way support or encourage the promotion of our products for unapproved uses in violation of applicable law, but physicians are permitted to use products for unapproved purposes and we are aware of such uses of Soliris. In addition, we are studying and expect to continue to study Soliris in diseases other than PNH and aHUS in controlled clinical settings, and independent investigators are doing so as well. In the event of any new risks or adverse effects discovered as new patients are treated for approved indications, or as our products are studied in or used by patients for other indications, regulatory authorities may delay or revoke their approvals, we may be required to conduct additional clinical trials and safety studies, make changes in labeling, reformulate our products or make changes and obtain new approvals for our and our suppliers' manufacturing facilities. We may also experience a significant drop in potential sales, experience harm to our reputation and the reputation of our products in the marketplace or become subject to lawsuits, including class actions. Any of these results could decrease or prevent any sales or substantially increase the costs and expenses of commercializing and marketing our products.

We may be sued by people who use our products, whether as a prescribed therapy, during a clinical trial, during an investigator initiated study, or otherwise. Many patients who use our products are already very ill. Any informed consents or waivers obtained from people who enroll in our trials or use our products may not protect us from liability or litigation. Our product liability insurance may not cover all potential types of liabilities or may not cover certain liabilities completely. Moreover, we may not be able to maintain our insurance on acceptable terms. In addition, negative publicity relating to the use of our products or a product candidate, or to a product liability claim, may make it more difficult, or impossible, for us to market and sell. As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.

Patients who use our products already often have severe and advanced stages of disease and known as well as unknown significant pre-existing and potentially life-threatening health risks. During the course of treatment, patients may suffer adverse events, including death, for reasons that may or may not be related to our products. Some patients treated with our products,

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including patients who have participated in our clinical trials, have died or suffered potentially life-threatening diseases either during or after ending their treatments. Patients who delay or miss a dose or discontinue treatment may also experience complications, including death. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our products, the investigation into the circumstance may be time consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process in other countries, or impact and limit the type of regulatory approvals that our products receive or maintain.

For example, use of C5 Inhibitors, such as Soliris, is associated with an increased risk for certain types of infection, including meningococcal infection. Under controlled settings, patients in our eculizumab trials all receive vaccination against meningococcal infection prior to first administration of Soliris and patients who are prescribed Soliris in most countries are required by prescribing guidelines to be vaccinated prior to receiving their first dose. A physician may not have the opportunity to timely vaccinate a patient in the event of an acute emergency episode, such as in a patient presenting with aHUS or during the health crisis that began in May 2011 in Europe, principally in Germany, due to the epidemic of infections from Enterohemorrhagic E. coli. Vaccination does not, however, eliminate all risk of meningococcal infection. Additionally, in some countries there may not be any vaccine approved for general use or approved for use in infants and children. Some patients treated with Soliris who had been vaccinated have nonetheless experienced meningococcal infection, including patients who have suffered serious illness or death. Each such incident is required to be reported to appropriate regulatory agencies in accordance with relevant regulations.

Clinical evaluations of outcomes in the post-marketing setting are required to be reported to appropriate regulatory agencies in accordance with relevant regulations. Determination of significant complications associated with the delay or discontinuation of our products could have a material adverse effect on our ability to sell our products.

If we are unable to establish and maintain effective sales, marketing and distribution capabilities, or to enter into agreements with third parties to do so, we will be unable to successfully commercialize our products.

We are marketing and selling our products ourselves in the United States, Europe, Japan and several other territories. Strensiq and Kanuma were approved in 2015, are in the early stages of commercial launch and are the second and third new product launches in Alexion's history. If we are unable to establish and/or expand our capabilities to sell, market and distribute our products, either through our own capabilities or by entering into agreements with others, or to maintain such capabilities in countries where we have already commenced commercial sales, we will not be able to successfully sell our products. In that event, we will not be able to generate significant revenues. We cannot guarantee that we will be able to establish and maintain our own capabilities or enter into and maintain any marketing or distribution agreements with third-party providers on acceptable terms, if at all. Even if we hire the qualified sales and marketing personnel we need to support our objectives, or enter into marketing and distribution agreements with third parties on acceptable terms, we may not do so in an efficient manner or on a timely basis. We may not be able to correctly judge the size and experience of the sales and marketing force and the scale of distribution capabilities necessary to successfully market and sell our products. Establishing and maintaining sales, marketing and distribution capabilities are competitive, expensive and time-consuming. Our expenses associated with building up and maintaining the sales force and distribution capabilities around the world may be disproportionate compared to the revenues we may be able to generate on sales. We cannot guarantee that we will be successful in commercializing any of our products.

If we fail to comply with laws or regulations, we may be subject to investigations and civil or criminal penalties and our business could be adversely affected.

In addition to FDA and related regulatory requirements, we are subject to health care "fraud and abuse" laws, such as the federal False Claims Act (FCA), the anti-kickback provisions of the federal Social Security Act, and other related federal laws and regulations.  The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, in cash or in kind to induce, or reward the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any health care item or service reimbursable under Medicare, Medicaid, or other federal health care programs. Liability may be established without a person or entity having actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it. A conviction for violation of the Anti-kickback Statute requires mandatory exclusion from participation in federal health care programs. The majority of states also have statutes similar to the federal Anti-Kickback Statute and false claims laws that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.  We seek to comply with the anti-kickback laws and with the available statutory exemptions and safe harbors. However, our practices may not in all cases fit within the safe harbors, and our practices may therefore be subject to scrutiny on a case-by-case basis. The FCA prohibits any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim. Pharmaceutical companies have been investigated and have reached substantial financial settlements with the Federal

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government under the FCA for a variety of alleged promotional and marketing activities, such as allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product; providing consulting fees and other benefits to physicians to induce them to prescribe products; engaging in promotion for uses that the FDA has not approved, or “off-label” uses; and submitting inflated best price information to the Medicaid Rebate Program. We seek to comply with the FCA laws, but we cannot assure that our compliance program, policies and procedures will always protect Alexion from acts committed by its employees or third-party distributors or service providers. Violations of U.S. federal and state fraud and abuse laws may result in criminal, civil and administrative sanctions, including fines, damages, civil monetary penalties and exclusion from federal healthcare programs (including Medicare and Medicaid).

Although physicians in the United States are permitted to, based on their medical judgment, prescribe products for indications other than those cleared or approved by the FDA, manufacturers are prohibited from promoting their products for such off-label uses. In the United States, we market our products for their approved uses. Although we believe our marketing materials and training programs for physicians do not constitute off-label promotion, the FDA, the U.S. Justice Department, or other federal or state government agencies may disagree. If the FDA or other government agencies determine that our promotional materials, training or other activities constitute off-label promotion of any of our products, it could request that we modify our training or promotional materials or other activities or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalties. It is also possible that other federal or state enforcement authorities might take action if they believe that the alleged improper promotion led to the submission and payment of claims for an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false or fraudulent claims for payment of government funds.

The EU imposes similar strict restrictions on the promotion and marketing of drug products. The off-label promotion of medicinal products is prohibited in the EU and in other territories. The promotion of medicinal products that are not subject to a marketing authorization is also prohibited in the EU. Violations of the rules governing the promotion of medicinal products in the EU and in other territories could be penalized by administrative measures, fines and imprisonment.

We are subject to FCPA, the U.K. Bribery Act, and other anti-corruption laws and regulations that generally prohibit companies and their intermediaries from making improper payments to government officials and/or other persons for the purpose of obtaining or retaining business and we operate in countries that are recognized as having a greater potential for governmental and commercial corruption. We cannot assure that our compliance program, policies and procedures will always protect Alexion from acts committed by its employees or third-party distributors or service providers.

In May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the SEC requesting information related to our grant-making activities and compliance with the FCPA in various countries. The SEC also seeks information related to Alexion’s recalls of specific lots of Soliris and related securities disclosures. In addition, in October 2015, Alexion received a request from the DOJ for the voluntary production of documents and other information pertaining to Alexion's compliance with the FCPA. Alexion is cooperating with these investigations. At this time, Alexion is unable to predict the duration, scope or outcome of these investigations.

Any determination that our operations or activities are not, or were not, in compliance with existing United States or foreign laws or regulations, including by the SEC or DOJ pursuant to its investigation of our compliance with the FCPA and other matters, could result in the imposition of a broad range of civil and criminal sanctions against Alexion and certain of our directors, officers and/or employees, including injunctive relief, disgorgement, substantial fines or penalties, imprisonment, and other legal or equitable sanctions. Additionally, we could experience interruptions of business, harm to our reputation, debarment from government contracts, loss of supplier, vendor or other third-party relationships, and necessary licenses and permits could be terminated. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence. Cooperating with and responding to the SEC and the DOJ in connection with its investigation of our FCPA practices and other matters, as well as responding to any future U.S. or foreign governmental investigation or whistleblower lawsuit, could result in substantial expenses, and could divert management’s attention from other business concerns and could have a material adverse effect on our business and financial condition and growth prospects.

Completion of preclinical studies or clinical trials does not guarantee advancement to the next phase of development.

Completion of preclinical studies or clinical trials does not guarantee that we will initiate additional studies or trials for our product candidates, that if further studies or trials are initiated what the scope and phase of the trial will be or that they will be completed, or that if these further studies or trials are completed, that the design or results will provide a sufficient basis to apply for or receive regulatory approvals or to commercialize products. Results of clinical trials could be inconclusive, requiring additional or repeat trials. Data obtained from preclinical studies and clinical trials are subject to varying interpretations that could delay, limit or prevent regulatory approval. If the design or results achieved in our clinical trials are insufficient to proceed to further trials or to regulatory approval of our product candidates, our company could be materially adversely affected. Failure of a clinical trial to achieve its pre-specified primary endpoint, such as the Phase II Soliris trial for AMR that we announced in January 2015, generally increases the likelihood that additional studies or trials will be required if

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we determine to continue development of the product candidate, reduces the likelihood of timely development of and regulatory approval to market the product candidate, and may decrease the chances for successfully achieving the primary endpoint in scientifically similar indications.

Our clinical studies may be costly and lengthy, and there are many reasons why drug testing could be delayed or terminated.

For human trials, patients must be recruited and each product candidate must be tested at various doses and formulations for each clinical indication. In addition, to ensure safety and effectiveness, the effect of drugs often must be studied over a long period of time, especially for the chronic diseases that we are studying. Many of our programs focus on diseases with small patient populations making patient enrollment difficult. Insufficient patient enrollment in our clinical trials could delay or cause us to abandon a product development program. We may decide to abandon development of a product candidate or a study at any time due to unfavorable results or other reasons, or we may have to spend considerable resources repeating clinical trials or conducting additional trials, either of which would increase costs and delay any revenue from those product candidates, if any. We may open clinical sites and enroll patients in countries where we have little experience. We rely on a small number of clinical research organizations to carry out our clinical trial related activities, and one CRO is responsible for many of our studies. We rely on such parties to accurately report their results. Our reliance on CROs may impact our ability to control the timing, conduct, expense and quality of our clinical trials.

 Additional factors that can cause delay, impairment or termination of our clinical trials or our product development efforts include:

• delay or failure in obtaining institutional review board (IRB), approval or the approval of other reviewing entities to conduct a clinical trial at each site;

• delay or failure in reaching agreement on acceptable terms with prospective contract research organizations(CROs), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

• withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care or the ineligibility of a site to participate in our clinical trials;

• clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial;

• slow patient enrollment, including, for example, due to the rarity of the disease being studied;

• delay or failure in having patients complete a trial or return for post-treatment follow-up;

• long treatment time required to demonstrate effectiveness;

• lack of sufficient supplies of the product candidate;

• disruption of operations at the clinical trial sites;

• adverse medical events or side effects in treated patients, and the threat of legal claims and litigation alleging injuries;

• failure of patients taking the placebo to continue to participate in our clinical trials;

• insufficient clinical trial data to support effectiveness of the product candidates;

• lack of effectiveness or safety of the product candidate being tested;

• lack of sufficient funds;

• inability to meet required specifications or to manufacture sufficient quantities of the product candidate for development or commercialization activities in a timely and cost-efficient manner;

• decisions by regulatory authorities, the IRB, ethics committee, or us, or recommendation by a data safety monitoring board, to suspend or terminate clinical trials at any time for safety issues or for any other reason;

• failure to obtain the necessary regulatory approvals for the product candidate or the approvals for the facilities in which such product candidate is manufactured; and

• decisions by competent authorities, IRBs or ethics committees to demand variations in protocols or conduct of clinical trials.

Risks Related to Intellectual Property

If we cannot obtain new patents, maintain our existing patents and protect the confidentiality and proprietary nature of our trade secrets and other intellectual property, our business and competitive position will be harmed.

Our success will depend in part on our ability to obtain and maintain patent and regulatory protections for our products and investigational compounds, to preserve our trade secrets and other proprietary rights, to operate without infringing the proprietary rights of third parties, and to prevent third parties from circumventing our rights. Due to the time and expense of bringing new products through development and regulatory approval to the marketplace, there is particular importance in obtaining patent and trade secret protection for significant new technologies, products and processes. 

We have and may in the future obtain patents or the right to practice patents through ownership or license. Our patent applications may not result in the issue of patents in the United States or other countries. Our patents may not afford adequate

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protection for our products. Third parties may challenge our patents, and have challenged our patents in the past. If any of our patents are narrowed, invalidated or become unenforceable, competitors may develop and market products similar to ours that do not conflict with or infringe our patents rights, which could have a material adverse effect on our financial condition. We may also finance and collaborate in research conducted by government organizations, hospitals, universities or other educational or research institutions. Such research partners may be unwilling to grant us exclusive rights to technology or products developed through such collaborations. There is also a risk that disputes may arise as to the rights to technology or products developed in collaboration with other parties. Our products and product candidates are expensive and time-consuming to test and develop. Even if we obtain and maintain patents, our business may be significantly harmed if the patents are not broad enough to protect our products from copycat products.

Significant legal questions exist concerning the extent and scope of patent protection for biopharmaceutical products and processes in the United States and elsewhere. Accordingly, there is no certainty that patent applications owned or licensed by us will issue as patents, or that our issued patents will afford meaningful protection against competitors. Once issued, patents are subject to challenge through both administrative and judicial proceedings in the U.S. and other countries. Such proceedings include re-examinations, inter partes reviews, post-grant reviews and interference proceedings before the U.S. Patent and Trademark Office, as well as opposition proceedings before the European Patent Office. Litigation may be required to enforce, defend or obtain our patent and other intellectual property rights. Any administrative proceeding or litigation could require a significant commitment of our resources and, depending on outcome, could adversely affect the scope, validity or enforceability of certain of our patent or other proprietary rights.

In addition, our business requires using sensitive technology, techniques and proprietary compounds that we protect as trade secrets. However, we may also rely heavily on collaboration with, or discuss the potential for collaboration with, suppliers, outside scientists and other biopharmaceutical companies. Collaboration and discussion of potential collaboration present a strong risk of exposing our trade secrets. If our trade secrets were exposed, it would help our competitors and adversely affect our business prospects.

If we are found to be infringing on patents owned by others, we may be forced to pay damages to the patent owner and/or obtain a license to continue the manufacture, sale or development of our products. If we cannot obtain a license, we may be prevented from the manufacture, sale or development of our products, which would adversely affect our business.

Parts of our technology, techniques, proprietary compounds and potential product candidates, including those which are or may be in-licensed, may be found to infringe patents owned by or granted to others. We previously reported that certain third parties filed civil lawsuits against us claiming infringement of their intellectual property rights. Each of those matters was resolved. However, additional third parties may claim that the manufacture, use or sale of our products or product candidates infringes patents owned or granted to such third parties. We have in the past received, and may in the future receive, notices from third parties claiming that their patents may be infringed by the development, manufacture or sale of our products or product candidates. We are aware of patents owned by third parties that might be claimed by such third parties to be infringed by the development and commercialization of our products or investigational compounds. In respect to some of these patents, we have obtained licenses, or expect to obtain licenses. However, with regard to other patents, we have determined in our judgment that:

▪ our products and investigational compounds do not infringe the patents;

▪ the patents are not valid or enforceable; and/or

▪ we have identified and are testing various alternatives that should not infringe the patents and which should permit continued development and commercialization of our products and investigational compounds.

Any holder of these patents or other patents covering similar technology could sue us for damages and seek to prevent us from manufacturing, selling or developing our products. Legal disputes can be costly and time consuming to defend. If we cannot successfully defend against any future actions or conflicts, if they arise, we may incur substantial legal costs and may be liable for damages, be required to obtain costly licenses or need to stop manufacturing, using or selling our products, which would adversely affect our business. We may seek to obtain a license prior to or during legal actions in order to reduce further costs and the risk of a court determination that our product infringes the third party's patents. A required license may be costly or may not be available on acceptable terms, if at all. A costly license, or inability to obtain a necessary license, could have a material adverse effect on our business.

There can be no assurance that we would prevail in a patent infringement action or that we would be able to obtain a license to any third-party patent on commercially reasonable terms or any terms at all; successfully develop non-infringing alternatives on a timely basis; or license alternative non-infringing technology, if any exists, on commercially reasonable terms. Any impediment to our ability to manufacture, use or sell approved forms of our products or our product candidates could have a material adverse effect on our business and prospects.

It is possible that we could lose market exclusivity for a product earlier than expected, which would harm our competitive position.

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In our industry, much of an innovative product’s commercial value is realized while it has market exclusivity. When market exclusivity expires and biosimilar or generic versions of the product are approved and marketed, there can be substantial decline in the innovative product’s sales.

Market exclusivity for our products is based upon patent rights and certain regulatory forms of exclusivity. The scope of our product patent rights vary from country to country and are dependent on the availability of meaningful legal remedies in each country. The failure to obtain patent and other intellectual property rights, or limitations on the use, or loss of such rights, could be material to our business. In some countries, patent protections for our products may not exist because certain countries did not historically offer the right to obtain specific types of patents or we did not file patents in those markets.  Also, the patent environment is unpredictable and the validity and enforceability of patents cannot be predicted with certainty. Absent relevant patent protection for a product, once regulatory exclusivity periods expire, biosimilar or generic versions of the product can be approved and marketed.  Even prior to the expiration of regulatory exclusivity, a competitor could seek to obtain marketing approval by submitting its own clinical trial data.

The market exclusivity of our products may be impacted by competitive products that are either innovative or biosimilar or generic copies. In our industry, the potential for biosimilar challenges has been an increasing risk to product market exclusivity. U.S. law includes an approval pathway for biosimilar versions of innovative biological products. Under the pathway, the FDA may approve products that are similar to (but not generic copies of) innovative biologics on the basis of less extensive data than is required for a full biologic license application. After an innovator has marketed its product for four years, other manufacturers may apply for approval of a biosimilar version of the innovator product. However, qualified innovative biological products will receive 12 years of regulatory exclusivity, meaning that the FDA may not actually approve a biosimilar version until 12 years after the innovative product received its approval. The law also provides a mechanism for innovators to enforce their patents that protect their products and for biosimilar applicants to challenge the patents. Such litigation may begin as early as four years after the innovative biological product is first approved by the FDA. Pathways for biosimilar products also exist in many other markets, including Europe and Japan.

Risks Related to Our Operations

We may not accurately forecast demand for our products, including our new products, which may cause our operating results to fluctuate, and we cannot guarantee that we will achieve our financial goals, including our ability to maintain profitability on a quarterly or annual basis in the future.

We have maintained profitability on a quarterly basis since the quarter ended June 30, 2008 and on an annual basis beginning with the year ended December 31, 2008. Our quarterly revenues, expenses and net income (loss) may fluctuate, even significantly, due to the risks described in these “Risk Factors” as well as the timing of charges and expenses that we may take. We believe that we formulate our annual operating budgets with reasonable assumptions and targets, however we may not generate sufficient revenues or control expenses to achieve our financial goals, including continued profitability. We may not be able to sustain or increase profitability on a quarterly or annual basis. You should not consider our financial performance, including our revenue growth, in recent periods as indicative of our future performance. We may not accurately forecast demand for our products, especially Strensiq and Kanuma. Strensiq and Kanuma are in the early stages of commercial launch having each received marketing approval in 2015, and both products treat rare diseases for which there was no existing therapy in a new therapeutic area for us. Product demand is dependent on a number of factors. Our investors may have widely varying expectations that may be materially higher or lower than actual revenues and if our revenues are different from these expectations, our stock price may experience significant volatility. Our revenues are also subject to foreign exchange rate fluctuations due to the global nature of our operations and our results of operations could be adversely affected due to unfavorable foreign exchange rates. Although we use derivative instruments to manage foreign currency risk, our efforts to reduce currency exchange losses may not be successful.

We have significant debt service obligations as a result of the debt we incurred to finance the acquisition of Synageva. Changes in interest rates related to this debt could significantly increase our annual interest expense. As we advance our most robust pipeline in our history and launch our second and third products worldwide, we will have substantial expenses as we continue our research and development efforts, continue to conduct clinical trials and continue to develop manufacturing, sales, marketing and distribution capabilities worldwide, some of which could be delayed, scaled-back or eliminated to achieve our financial objectives.

We have also recorded, or may be required to record, charges that include inventory write-downs for failed quality specifications or recalls, impairments with respect to investments, fixed assets and long-lived assets, outcomes of litigation and other legal or administrative proceedings, regulatory matters and tax matters, and payments in connection with acquisitions and other business development activities, such as milestone payments.

Each of our products is currently the only approved drug for the disease(s) the product treats. If a competitive product is approved for sale, including a biosimilar or generic product, our market share and our revenues could decline, particularly if the competitive product is perceived to be more effective or is less expensive than our product.

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We operate in a highly competitive environment. Soliris is currently the only approved therapy for the treatment of PNH and aHUS. We are in advanced clinical studies of Soliris for the treatment of other diseases, and there are currently no approved drugs for any of these other diseases. Strensiq is currently the only product approved to treat HPP and Kanuma is the only product approved to treat LAL-D. In the future, Soliris may compete with new drugs currently in development, and Strensiq and Kanuma may also experience competition. Other companies have initiated clinical studies for the treatment of PNH and NMO, and we are aware of companies that are planning to initiate studies for diseases that we are also targeting.

Pharmaceutical companies have publicly announced intentions to establish or develop rare disease programs and these companies may introduce products that are competitive with ours. These and other companies, many of which have significantly greater financial, technical and marketing resources than us, may commercialize products that are cheaper, more effective, safer, or easier to administer than our products. In the future, our products may also compete with biosimilars or generics. We experience competition in drug development from universities and other research institutions, and pharmaceutical companies compete with us to attract universities and academic research institutions as drug development partners, including for licensing their proprietary technology. If our competitors successfully enter into such arrangements with academic institutions, we will be precluded from pursuing those unique opportunities and may not be able to find equivalent opportunities elsewhere.

If a company announces successful clinical trial results for a product that may be competitive with one of our products or product candidates, receives marketing approval of a competitive product, or gets to the market before we do with a competitive product, our business may be harmed or our stock price may decline.

If we fail to attract and retain highly qualified personnel, we may not be able to successfully develop, manufacture or commercialize our products or products candidates.

The success of our business is dependent in large part on our continued ability to attract and retain our senior management, and other highly qualified personnel in our scientific, clinical, manufacturing and commercial organizations. There is intense competition in the biopharmaceutical industry for these types of personnel. Our business is specialized and global and we must attract and retain highly qualified individuals across many geographies. We may not be able to continue to attract and retain the highly qualified personnel necessary for developing, manufacturing and commercializing our products and product candidates. If we are unsuccessful in our recruitment and retention efforts, our business may be harmed.

If we fail to satisfy our debt service obligations or obtain the capital necessary to fund our operations, we may be unable to commercialize our products or continue or complete our product development.

In June 2015, we acquired Synageva and used a substantial portion of our cash on hand and incurred significant debt under the terms of a senior secured credit facility to finance the acquisition. In addition, we have substantial contingent liabilities, including milestone and royalty obligations under earlier acquisitions and strategic transactions. Our increased indebtedness, including increased interest expense, together with our significant contingent liabilities, could, among other things:     

• make us more vulnerable to economic or industry downturns and competitive pressures;

• make it difficult for us to make payments on the credit facilities and require us to use cash flow from operations to satisfy our debt obligations, which would reduce the availability of our cash flow for other purposes, including business development efforts, research and development and mergers and acquisitions;

• limit our ability to incur additional debt or access the capital markets; and

• limit our flexibility in planning for, or reacting to changes in, our business.

The Credit Agreement requires us to comply with certain financial covenants on a quarterly basis and includes negative covenants, subject to exceptions, restricting or limiting our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, grant liens, and engage in certain investment, acquisition and disposition transactions. If an event of default occurs, the interest rate would increase and the administrative agent would be entitled to take various actions, including the acceleration of amounts due under the loan.

Our ability to satisfy our obligations under the Credit Agreement and meet our debt service obligations will depend upon our future performance, which will be subject to financial, business and other factors affecting our operations, many of which are beyond our control.

We may not be able to access the capital and credit markets on terms that are favorable to us.

We may need to raise additional capital to supplement our existing funds and cash generated from operations for working capital, capital expenditure and debt service requirements, and other business activities. Funding needs may shift and the amount of capital we may need depends on many factors, including, the cost of any acquisition or any new collaborative, licensing or other commercial relationships that we may establish, the time and cost necessary to build our manufacturing facilities or enhance our manufacturing operations, the cost of obtaining and maintaining the necessary regulatory approvals for our manufacturing facilities, and the progress, timing and scope of our preclinical studies and clinical trials. The capital and

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credit markets have experienced extreme volatility and disruption. We may not receive additional funding when we need it or funding may only be available on unfavorable terms. If we cannot raise adequate funds to satisfy our capital requirements, we may have to delay, scale-back or eliminate certain research, development, manufacturing or commercial activities.

Our business involves environmental risks and potential exposure to environmental liabilities.

 As a biopharmaceutical company, our business involves the use of certain hazardous materials in our research, development, manufacturing, and other activities. We and our third party providers are subject to various federal, state and local environmental laws and regulations concerning the handling and disposal of non-hazardous and hazardous wastes, such as medical and biological wastes, and emissions and discharges into the environment, such as air, soils and water sources. We also are subject to laws and regulations that impose liability and clean-up responsibility for releases of hazardous substances into the environment and a current or previous owner or operator of property may be liable for the costs of remediating its property or locations, without regard to whether the owner or operator knew of or caused the contamination. If an accident or environmental discharge occurs, or if we discover contamination caused by prior owners and operators of properties we acquire, we could be liable for remediation obligations, damages and fines that could exceed our insurance coverage and financial resources. Such obligations and liabilities, which to date have not been material, could have a material impact on our business and financial condition. Additionally, the cost of compliance with environmental and safety laws and regulations may increase in the future, and we may be required dedicate more resources to comply with such developments or purchase supplemental insurance coverage.

We are seeking to expand our business through strategic initiatives. Our efforts to identify opportunities or complete transactions that satisfy our strategic criteria may not be successful, and we not realize the anticipated benefits of any completed acquisition or other strategic transaction.

Our business strategy includes expanding our products and capabilities. We regularly evaluate potential merger, acquisition, partnering and in-license opportunities that we expect will expand our pipeline or product offerings, and enhance our research platforms. Acquisitions of new businesses or products and in-licensing of new products may involve numerous risks, including:

• substantial cash expenditures;

• potentially dilutive issuance of equity securities;

• incurrence of debt and contingent liabilities, some of which may be difficult or impossible to identify at the time of acquisition;

• difficulties in assimilating the operations of the acquired companies;

• failure of any acquired businesses or products or in-licensed products to achieve the scientific, medical, commercial or other results anticipated;

• diverting our management's attention away from other business concerns;

• the potential loss of our key employees or key employees of the acquired companies; and

• risks of entering markets in which we have limited or no direct experience.

A substantial portion of our strategic efforts are focused on opportunities for rare disorders and life-saving therapies, but the availability of such opportunities is limited. We may not be able to identify opportunities that satisfy our strategic criteria or are acceptable to us or our stockholders. Several companies have publicly announced intentions to establish or develop rare disease programs and we may compete with these companies for the same opportunities. For these and other reasons, we may not be able to acquire the rights to additional product candidates or approved products on terms that we or our stockholders find acceptable, or at all.

Even if we are able to successfully identify and complete acquisitions and other strategic transactions, we may not be able to integrate them or take full advantage of them. An acquisition or other strategic transaction may not result in short-term or long-term benefits to us. We may also incorrectly judge the value or worth of an acquired company or business or an acquired or in-licensed product.

To effectively manage our current and future potential growth, we must continue to effectively enhance and develop our global employee base, and our operational and financial processes. Supporting our growth strategy will require significant capital expenditures and management resources, including investments in research, development, sales and marketing, manufacturing and other areas of our operations. The development or expansion of our business, any acquired business or any acquired or in-licensed products may require a substantial capital investment by us. We may not have these necessary funds or they might not be available to us on acceptable terms or at all. We may also seek to raise funds by selling shares of our capital stock, which could dilute current stockholders' ownership interest in our company, or securities convertible into our capital stock, which could dilute current stockholders' ownership interest in our company upon conversion.

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We may be required to recognize impairment charges for our goodwill and other intangible assets.

As of March 31, 2016, the net carrying value of our goodwill and other intangible assets totaled $9,677,138.  As required by generally accepted accounting principles, we periodically assess these assets to determine if they are impaired.  Impairment of intangible assets may be triggered by developments both within and outside our control. Deteriorating economic conditions, technological changes, disruptions to our business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets, intensified competition, divestitures, market capitalization declines and other factors may impair our goodwill and other intangible assets.  Any charges relating to such impairments could adversely affect our results of operations in the periods in which an impairment is recognized.

Our business could be affected by litigation, government investigations and enforcement actions.

We operate in many jurisdictions in a highly regulated industry and we could be subject to litigation, government investigation and enforcement actions on a variety of matters in the United States or foreign jurisdictions, including, without limitation, intellectual property, regulatory, product liability, environmental, whistleblower, Qui Tam, false claims, privacy, anti-kickback, anti-bribery, securities, commercial, employment, and other claims and legal proceedings which may arise from conducting our business. As previously disclosed, in May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the SEC requesting information related to our grant-making activities and compliance with the FCPA in various countries. The SEC also seeks information related to Alexion’s recalls of specific lots of Soliris and related securities disclosures. In addition, in October 2015, Alexion received a request from the DOJ for the voluntary production of documents and other information pertaining to Alexion's compliance with the FCPA. Legal proceedings, government investigations, including the SEC and DOJ investigations, and enforcement actions can be expensive and time consuming. An adverse outcome could result in significant damages awards, fines, penalties, exclusion from the federal healthcare programs, healthcare debarment, injunctive relief, product recalls, reputational damage and modifications of our business practices, which could have a material adverse effect on our business and results of operations.

The intended efficiency of our corporate structure depends on the application of the tax laws and regulations in the countries where we operate and we may have exposure to additional tax liabilities or our effective tax rate could change, which could have a material impact on our results of operations and financial position.

As a company with international operations, we are subject to income taxes, as well as non-income based taxes, in both the United States and various foreign jurisdictions. Significant judgment is required in determining our worldwide tax liabilities.  Although we believe our estimates are reasonable, the ultimate outcome with respect to the taxes we owe may differ from the amounts recorded in our financial statements.  If the Internal Revenue Service, or other taxing authority, disagrees with the positions we take, we could have additional tax liability, and this could have a material impact on our results of operations and financial position. Our effective tax rate could be adversely affected by changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations, changes in interpretations of tax laws, including pending tax law changes, changes in our manufacturing activities and changes in our future levels of research and development spending.

We have designed our corporate structure, the manner in which we develop and use our intellectual property, and our intercompany transactions between our affiliates in a way that is intended to enhance our operational and financial efficiency and increase our overall profitability. We are also integrating the Synageva corporate structure into our own in a manner that is also intended to achieve similar efficiencies. The application of the tax laws and regulations of various countries in which we operate and to our global operations is subject to interpretation. We also must operate our business in a manner consistent with our corporate structure to realize such efficiencies. The tax authorities of the countries in which we operate may challenge our methodologies for valuing developed technology or for transfer pricing. If tax authorities determine that the manner in which we operate results in our business not achieving the intended tax consequences, our effective tax rate could increase and harm our financial position and results of operations.

In addition, the United States government and other governments are considering and may adopt tax reform measures that significantly increase our worldwide tax liabilities. The U.S. Congress, the Organization for Economic Co-operation and Development and other government agencies in countries where we and our affiliates operate have focused on issues related to the taxation of multinational corporation, including, for example, in the area of “base erosion and profit shifting,” where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates. We established operations in Ireland in 2013 and Ireland tax authorities announced changes to the treatment of non-resident Irish entities. The changes are not expected to impact existing non-resident Irish entities, such as ours, until after December 31, 2020. These changes and other prospective changes in the United States and other countries in which we and our affiliates operate could increase our effective tax rate, and harm our financial position and results of operations.

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Our sales and operations are subject to a variety of risks relating to the conduct and expansion of our international business.

We continue to increase our international presence, including in emerging markets. Our operations in foreign countries subject us to a variety of risks, including:

• difficulties or the inability to obtain necessary foreign regulatory or reimbursement approvals of our products in a timely manner;

• political or economic determinations that adversely impact pricing or reimbursement policies;

• economic problems or political instability;

• fluctuations in currency exchange rates;

• difficulties or inability to obtain financing in markets;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

• difficulties enforcing contractual and intellectual property rights;

• compliance with complex import and export control laws;

• trade restrictions and restrictions on direct investments by foreign entities;

• compliance with tax, employment and labor laws;

• costs and difficulties in recruiting and retaining qualified managers and employees to manage and operate the business in local jurisdictions;

• costs and difficulties in managing and monitoring international operations; and

• longer payment cycles.

Additionally, our business and marketing methods are subject to the laws and regulations of the countries in which we operate, which may differ significantly from country to country and may conflict with U.S. laws and regulations. The FCPA and anti-bribery laws and regulations are extensive and far-reaching, and we must maintain accurate records and control over the activities of our distributors and third party service providers in countries where we operate. We have policies and procedures designed to help ensure that we and our representatives, including our employees, comply with such laws, however we cannot guarantee that these policies and procedures will protect us against liability under the FCPA or other anti-bribery laws for actions taken by our representatives. Although we conducted due diligence of Synageva's operations prior to the acquisition, we may discover or identify deficiencies or non-compliance with such laws as we complete the integration of the Synageva business and conduct operations. Failure to comply with the laws and regulations of the countries in which we operate could materially harm our business.

Currency fluctuations and changes in exchange rates could adversely affect our revenue growth, increase our costs and negatively affect our profitability.

We conduct a substantial portion of our business in currencies other than the U.S. dollar. We are exposed to fluctuations in foreign currency exchange rates and fluctuations in foreign currency exchange rates affect our operating results. The exposures result from portions of our revenues, as well as the related receivables, and expenses that are denominated in currencies other than the U.S. dollar, including the Euro, Japanese Yen, British Pound, Swiss Franc, and Russian Ruble. As the U.S. dollar strengthens against these foreign currencies, the relative value of sales made in the respective foreign currencies decreases. When the U.S. dollar weakens against these currencies, the relative value of such sales increases. We manage our foreign currency transaction risk within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. We enter into foreign exchange forward contracts to hedge exposures resulting from portions of our forecasted revenues, including intercompany revenues, that are denominated in currencies other than the U.S. dollar. The purpose of the hedges of revenue is to reduce the volatility of exchange rate fluctuations on our operating results and to increase the visibility of the foreign exchange impact on forecasted revenues. Further, we enter into foreign exchange forward contracts, with durations of approximately 30 days, designed to limit the balance sheet exposure of monetary assets and liabilities. We enter into these hedges to reduce the impact of fluctuating exchange rates on our operating results. Gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. While we attempt to hedge certain currency risks, currency fluctuations between the U.S. dollar and the currencies in which we do business have, in the past, caused foreign currency transaction gains and losses and have also impacted the amounts of revenues and expenses calculated in U.S. dollars and will do so in the future. Likewise, past currency fluctuations have at times resulted in foreign currency transaction gains, and there can be no assurance that these gains can be reproduced. Any significant foreign currency exchange rate fluctuations could adversely affect our financial condition and results of operations.

Changes in healthcare laws and policy may affect coverage and reimbursement of our products in ways that we cannot currently predict and these changes could adversely affect our business and financial condition.

 In the U.S., there have been a number of legislative and regulatory initiatives focused on containing the cost of health care. The Patient Protection and Affordable Care Act (PPACA) was enacted in the United States in March 2010. This law

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substantially changes the way healthcare is financed by both governmental and private insurers in the U.S., and significantly impacts the pharmaceutical industry. PPACA contains a number of provisions that are expected to impact our business and operations, in some cases in ways we cannot currently predict. Changes that may affect our business include those governing enrollment in federal healthcare programs, reimbursement changes, rules regarding prescription drug benefits under health insurance exchanges, expansion of the 340B program, expansion of state Medicaid programs, fraud and abuse enforcement and rules governing the approval of biosimilar products. These changes will impact existing government healthcare programs and will result in the development of new programs, including Medicare payment for performance initiatives and improvements to the physician quality reporting system and feedback program. On January 21, 2016, CMS issued final regulations to implement the changes to the Medicaid Drug Rebate Program under PPACA.  These regulations become effective on April 1, 2016.  We are evaluating the impact of these regulations on our business and operations. Moreover, in the future, Congress could enact legislation that further increases Medicaid drug rebates or other costs and charges associated with participating in the Medicaid Drug Rebate Program. The issuance of regulations and coverage expansion by various governmental agencies relating to the Medicaid Drug Rebate Program has and will continue to increase our costs and the complexity of compliance, has been and will be time-consuming, and could have a material adverse effect on our results of operations.

Governments in countries where we operate have adopted or have shown significant interest in pursuing legislative initiatives to reduce costs of health care. We expect that the implementation of current laws and policies, the amendment of those laws and policies in the future, as well as the adoption of new laws and policies, could have a material adverse effect on our industry generally and on our ability to maintain or increase our product sales or successfully commercialize our product candidates, or could limit or eliminate our future spending on development projects. In many cases, these government initiatives, even if enacted into law, are subject to future rulemaking by regulatory agencies. Although we have evaluated these government initiatives and the impact on our business, we cannot know with certainty whether any such law, rule or regulation will adversely affect coverage and reimbursement of our products, or to what extent, until such laws, rules and regulations are promulgated, implemented and enforced, which could sometimes take many years. The announcement or adoption of regulatory or legislative proposals could delay or prevent our entry into new markets, affect our reimbursement or sales in the markets where we are already selling our products and materially harm our business, financial condition and results of operations.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program, Medicare, or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Pricing and rebate calculations vary among products and programs. The calculations are complex and are often subject to interpretation by us, governmental or regulatory agencies and the courts. We cannot assure you that our submissions will not be found by CMS to be incomplete or incorrect. Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid. The Medicaid rebate amount is computed each quarter based on our submission to CMS of our current average manufacturer price and best price for the quarter. If we become aware that our reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, we are obligated to resubmit the corrected data for a period not to exceed twelve quarters from the quarter in which the data originally were due, and CMS may request or require restatements for earlier periods as well. Such restatements and recalculations increase our costs for complying with the laws and regulations governing the Medicaid Drug Rebate Program. Any corrections to our rebate calculations could result in an overage or underage in our rebate liability for past quarters, depending on the nature of the correction. Price recalculations also may affect the ceiling price at which we are required to offer our products to certain covered entities, such as safety-net providers, under the 340B drug discount program.

We are liable for errors associated with our submission of pricing data. In addition to retroactive rebates and the potential for 340B program refunds, if we are found to have knowingly submitted false average manufacturer price, ASP, or best price information to the government, we may be liable for civil monetary penalties in the amount of $100 per item of false information. If we are found to have made a misrepresentation in the reporting of our ASP, the Medicare statute provides for civil monetary penalties of up to $10 for each misrepresentation for each day in which the misrepresentation was applied. Our failure to submit monthly/quarterly average manufacturer price, ASP, and best price data on a timely basis could result in a civil monetary penalty of $10 per day for each day the information is late beyond the due date. Such failure also could be grounds for CMS to terminate our Medicaid drug rebate agreement, pursuant to which we participate in the Medicaid program. In the event that CMS terminates our rebate agreement, federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs.

Federal law requires that a company must participate in the FSS pricing program to be eligible to have its products paid for with federal funds. If we overcharge the government in connection with our FSS contract or Section 703 Agreement, whether due to a misstated FCP or otherwise, we are required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the FCA and other laws

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and regulations. Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We may be subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage.

We are subject to laws and regulations covering data privacy and the protection of personal information including health information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business. In the U.S., we may be subject to state security breach notification laws, state health information privacy laws and federal and state consumer protections laws which impose requirements for the collection, use, disclosure and transmission of personal information. Each of these laws are subject to varying interpretations by courts and government agencies, creating complex compliance issues for us. If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain individually identifiable health information from a covered entity in a manner that is not authorized or permitted by the federal Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA) or for aiding and abetting the violation of HIPAA.

Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well. European Union member states and other jurisdictions have adopted data protection laws and regulations, which impose significant compliance obligations. For example, the EC adopted the EU Data Protection Directive, as implemented into national laws by the EU member states, which imposed strict obligations and restrictions on the ability to collect, analyze, and transfer personal data, including health data from clinical trials and adverse event reporting. Data protection authorities from different EU member states have interpreted the privacy laws differently, which adds to the complexity of processing personal data in the EU, and guidance on implementation and compliance practices are often updated or otherwise revised. Any failure to comply with the rules arising from the EU Data Protection Directive and related national laws of European Union member states could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.

In December 2015, a proposal for an EU Data Protection Regulation, intended to replace the current EU Data Protection Directive, was agreed between the European Parliament, the Council of the European Union and the EC. The EU Data Protection Regulation, which will be officially adopted in early 2016, will introduce new data protection requirements in the EU and substantial fines for breaches of the data protection rules. The EU Data Protection Regulation, which will be applicable two years after the date of its publication in the Official Journal for the European Union, will increase our responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with the new EU data protection rules.    

Security breaches, cyber-attacks, or other disruptions could expose us to liability and affect our business and reputation.

We are increasingly dependent on our information technology systems and infrastructure for our business. We collect, store, and transmit sensitive information including intellectual property, proprietary business information and personal information in connection with business operations. The secure maintenance of this information is critical to our operations and business strategy. Some of this information could be an attractive target of criminal attack by third parties with a wide range of motives and expertise, including organized criminal groups, “hactivists,” patient groups, disgruntled current or former employees, and others. Cyber-attacks are of ever-increasing levels of sophistication, and despite our security measures, our information technology and infrastructure may be vulnerable to such attacks or may be breached, including due to employee error or malfeasance. We have implemented information security measures to protect patients’ personal information against the risk of inappropriate and unauthorized external use and disclosure. However, despite these measures, and due to the ever changing information cyber-threat landscape, we may be subject to data breaches through cyber-attacks. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. If our systems become compromised, we may not promptly discover the intrusion. Like other companies in our industry, we have experienced attacks to our data and systems, including malware and computer viruses. If our systems failed or were breached or disrupted, we could lose product sales, and suffer reputational damage and loss of customer confidence. Such incidents would result in notification obligations to affected individuals and government agencies, legal claims or proceedings, and liability under federal and state laws that protect the privacy and security of personal information. Any one of these events could cause our business to be materially harmed and our results of operations would be adversely impacted.

Negative public opinion and increased regulatory scrutiny of recombinant and transgenic products, genetically modified products, and genetically modified animals generally may damage public perception of our current and future products or adversely affect our ability to conduct our business and obtain regulatory approvals we may seek.

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Kanuma is a transgenic product produced in the egg whites of genetically modified chickens who receive copies of the human lysosomal acid lipase gene to produce recombinant human lysosomal acid lipase. The success of Kanuma will depend in part on public attitudes of the use of genetic engineering. Public attitudes may be influenced by claims and perceptions that these types of activities or products are unsafe, and our products may not gain sufficient acceptance by, or fall out of favor with, the public or the medical community. Negative public attitudes to genetic engineering activities in general could result in more restrictive legislation or regulations and could impede our ability to conduct our business, delay preclinical or clinical studies, or otherwise prevent us from commercializing our product.

Risks Related to Our Common Stock

Our stock price is extremely volatile.

The trading price of our common stock has been extremely volatile and may continue to be volatile in the future. Many factors could have an impact on our stock price, including fluctuations in our or our competitors' operating results, clinical trial results or adverse events associated with our products, product development by us or our competitors, changes in laws, including healthcare, tax or intellectual property laws, intellectual property developments, changes in reimbursement or drug pricing, the existence or outcome of litigation or government proceedings, including the SEC/DOJ investigation, failure to resolve, delays in resolving or other developments with respect to the issues raised in the Warning Letter, acquisitions or other strategic transactions, and the perceptions of our investors that we are not performing or meeting expectations. The trading price of the common stock of many biopharmaceutical companies, including ours, has experienced extreme price and volume fluctuations, which have at times been unrelated to the operating performance of the companies whose stocks were affected.

Anti-takeover provisions in our charter and bylaws and under Delaware law could make a third-party acquisition of us difficult and may frustrate any attempt to remove or replace our current management.

 Our corporate charter and by-law provisions may discourage certain types of transactions involving an actual or potential change of control that might be beneficial to us or our stockholders. Our bylaws provide that special meetings of our stockholders may be called only by the Chairman of the Board, the President, the Secretary, or a majority of the Board of Directors, or upon the written request of stockholders who together own of record 25% of the outstanding stock of all classes entitled to vote at such meeting. Our bylaws also specify that the authorized number of directors may be changed only by resolution of the board of directors. Our charter does not include a provision for cumulative voting for directors, which may have enabled a minority stockholder holding a sufficient percentage of a class of shares to elect one or more directors. Under our charter, our board of directors has the authority, without further action by stockholders, to designate up to 5,000 shares of preferred stock in one or more series. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any class or series of preferred stock that may be issued in the future.

Because we are a Delaware corporation, the anti-takeover provisions of Delaware law could make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial to stockholders. We are subject to the provisions of Section 203 of the Delaware General Laws, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

ISSUER PURCHASE OF EQUITY SECURITIES (amounts in thousands except per share amounts)

The following table summarizes our common stock repurchase activity during the first quarter of 2016:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program
January 1-31, 2016	332	$	159.70	332	$	702,818
February 1-29, 2016	902	$	141.51	902	$	575,234
March 1-31, 2016	849	$	136.43	849	$	459,349
Total	2,083	$	142.34	2,083

In November 2012, our Board of Directors authorized a share repurchase program. The repurchase program does not have an expiration date and we are not obligated to acquire a particular number of shares. In May 2015, our Board of Directors

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increased the authorization to acquire shares with an aggregate value of up to $1,000,000 for future purchases under the repurchase program, which superseded all prior repurchase programs.

Item 5. OTHER INFORMATION.

None.

Item 6. EXHIBITS.

(a) Exhibits:

31.1	Certificate of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 Sarbanes Oxley Act of 2002.
31.2	Certificate of Chief Financial Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002.
32.1	Certificate of Chief Executive Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act.
32.2	Certificate of Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act.
101	The following materials from the Alexion Pharmaceuticals, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, (ii) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015, and (v) Notes to Condensed Consolidated Financial Statements.
10.1	Employment Agreement, dated February 26, 2016, by and between Alexion Pharmaceuticals, Inc. and David Hallal
10.2	Employment Agreement, dated February 26, 2016, by and between Alexion Pharmaceuticals, Inc. and Vikas Sinha
10.3	Employment Agreement, dated February 26, 2016, by and between Alexion Pharmaceuticals, Inc. and Clare Carmichael
10.4	Employment Agreement, dated February 26, 2016, by and between Alexion Pharmaceuticals, Inc. and Martin Mackay
10.5	Employment Agreement, dated February 26, 2016, by and between Alexion Pharmaceuticals, Inc. and John Moriarty

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ALEXION PHARMACEUTICALS, INC.
	By:	/s/    David Hallal
Date: April 29, 2016		David Hallal Chief Executive Officer (principal executive officer)
	By:	/s/    Vikas Sinha
Date: April 29, 2016		Vikas Sinha, M.B.A., C.A., C.P.A. Executive Vice President and Chief Financial Officer (principal financial officer)

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of February 26, 2016 by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and David Hallal (the “Employee”).

WITNESSETH

WHEREAS, the Company agrees to employ the Employee, subject to the terms and conditions contained in this Agreement; and

WHEREAS, the Employee agrees to accept employment with the Company, subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. Employment Duties and Acceptance.

(a)The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company as Chief Executive Officer and to perform such duties commensurate with such office or other office as the Employee shall reasonably be directed by the Company to perform. The Employee hereby accepts such employment and agrees to render the services described above. The Employee shall report to the Board of Directors of the Company (the “Board”).

(b)During the Term, the Employee shall devote his full business time and his best efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder. Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full time employee, it is understood that the Employee, with consent of the Board, may (1) have non full-time academic appointments; (2) participate in professional activities; (3) publish academic articles; and (4) participate in community and/or philanthropic activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.

2. Term of Employment.

The term of the Employee’s employment under this Agreement shall commence as of February 26, 2016 (the “Effective Date”) and shall end on the third anniversary thereof, unless sooner terminated pursuant to Section 6, 7 or 8 of this Agreement. Notwithstanding the foregoing, unless notice is given by the Employee or the Company at least sixty (60) days

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prior to the expiration of the Term of this Agreement (or at least sixty (60) days prior to the expiration of any extension hereof), the Term of the Agreement shall be automatically extended by one (1) year from the date it would otherwise end (whether upon expiration of the original Term or any extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8 hereof. The term of this Agreementas from time to time extended or renewed is hereafter referred to as “the Term of this Agreement” or “the Term”.

3. Compensation and Benefits.

(a)As compensation for services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, an annual base salary of $1,110,000 as adjusted from time to time, which base salary as so adjusted, shall be not less than the Employee’s base salary in effect immediately prior to the Effective Date (the “Base Salary”), payable in accordance with its regular payroll practices. The Employee’s Base Salary hereunder shall be reviewed at least annually thereafter during the Term of the Agreement for increase at the discretion of the Company.

(b)The Company agrees that the Employee shall be eligible for an annual performance bonus from the Company with respect to each fiscal year of the Company that ends during the Term, pursuant to the Company’s management incentive bonus program in effect from time to time (such plan, as so in effect, the “Bonus Plan”). The Employee’s target bonus under the Bonus Plan will be 120% of the Base Salary. The actual amount of any such bonus payable to the Employee under the Bonus Plan shall be determined by the Board of Directors of the Company (the “Board”) or the Compensation Committee thereof (the “Committee”) and paid by the Company in accordance with the terms of the Bonus Plan, subject to the Employee’s remaining employed on the date that bonuses are paid under the Bonus Plan, except as otherwise expressly provided herein.

(c)The Employee shall be eligible to receive stock-based awards under the equity incentive plan or program maintained by the Company as in effect from time to time (such plan, as so in effect, the “Equity Plan”) in the discretion of the Board or the Committee. Any such stock-based award will be subject to the terms of the Equity Plan, the terms of the award agreement evidencing such stock-based award, and such other restrictions and limitations as are generally applicable to shares of the Company’s common stock or Company employees or otherwise imposed by law.

(d)The Company shall pay or reimburse the Employee for all reasonable, customary and necessary business expenses actually incurred or paid by the Employee during the Term in the performance of services under this Agreement, subject to travel and other policies and such reasonable substantiation and documentation as may be required by the Company from time to time, provided that (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year, (ii) reimbursement is made not later than December 31 of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement is not subject to liquidation or exchange for any other benefit.

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(e)During the Term, the Employee shall be eligible to participate in all employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided under this Agreement (e.g., a severance pay plan). Participation in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law.

(f)During the Term, the Employee shall be eligible for paid vacation of four weeks and two personal days per calendar year taken in accordance with applicable Company policy.

4. Confidentiality.

The Employee acknowledges and agrees that he remains bound by the terms and conditions of the Proprietary Information and Inventions Agreement previously entered into with the Company. Notwithstanding any other provision of this Agreement, the Employee shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement which shall survive the termination of this Agreement in accordance with its terms.

5. Non-Competition, Non-Solicitation and Non-Disparagement.

(a)During the Term, the Employee shall not (1) provide any services, directly or indirectly, to any other business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion, or (2) participate in the formation of any business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained in this Section 5(a) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit the Employee’s Permitted Activities pursuant to Section 1(b).

(b)Upon a termination of the Employee’s employment by the Company for any reason other than pursuant to Section 6(a) or Section 6(b), or upon a termination of the Employee’s employment by the Employee for any reason, following such termination of employment and during the Restricted Period, the Employee shall not,directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer, or otherwise, compete with the Company or any of its Affiliates, or undertake any planning for any business competitive with the Company or any of its Affiliates. Specifically, but without limiting the foregoing, during the Restricted Period the Employee will not: (1) provide any services directly or indirectly, whether as an employee or independent contractor or otherwise, whether with or without compensation, to any other business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates; (2) participate in the formation of any business or commercial entity in the United States that is

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competitive with all or any portion of the business of the Company or its Affiliates, (3) directly or indirectly seek to employ, any person employed by the Company or any of its Affiliates anywhere in the world, or otherwise encourage or entice any such person to leave such employment; (4) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates anywhere in the world to terminate or diminish its relationship with the Company or its Affiliates; or (5) solicit or encourage any customer, consultant, or vendor of the Company or its Affiliates, anywhere in the world, to terminate or diminish its relationship with the Company or its Affiliates; provided, however, that nothing contained in this Section 5(b) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit Employee’s Permitted Activities pursuant to Section 1(b). This Section 5(b) shall be subject to written waivers that may be obtained by the Employee from the Company.

(c)At no time during the Term of this Agreement or thereafter, regardless of the reason for termination, will Employee knowingly make any written or verbal untrue statement that disparages the Company, its Affiliates, its business, its management, or its products in communications with any customer, client or the public. The employee will, furthermore, not otherwise do or say anything that could disrupt the good morale of employees of the Company or any of its Affiliates, or that harms the interests or reputation of the Company or any of its Affiliates.

(d)Nothing in this Agreement or the Proprietary Information and Inventions Agreement limits, restricts, or in any other way affects the Employee’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.

(e)The Employee acknowledges that he has read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 5(a)-(c) above. The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and are reasonable in respect to subject matter, length of time, and geographic area. If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 5, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company. The Employee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Employee of any of the provisions of this Section 5, without having to post bond. So that the Company may enjoy the full benefit of the covenants contained above, the Employee agrees that the Restricted Period shall be tolled, and shall not run, during the period of any breach by the Employee of such covenants.

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(f)If any of the covenants contained in this Section 5, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

(g)If any of the covenants contained in this Section 5, or any part thereof, is held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and that the parties intend for the court to modify the duration and/or area of such provision to the maximum extent permitted by law. The parties agree that in its reduced form, such provision shall then be enforceable.

(h)In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

6. Termination by the Company.

The Company may terminate the employment of the Employee as follows during the Term of this Agreement if any one or more of the following shall occur:

(a)Death. If the Employee shall die during the Term, the Employee’s employment hereunder shall automatically terminate.

(b)Disability. If the Employee shall become physically or mentally disabled so that the Employee is unable substantially to perform his services hereunder for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating to 180 days during any twelve-month period, the Company may terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.

(c)For Cause. If the Employee acts, or fails to act, in a manner that provides Cause for termination, the Company may at any time terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee. For purposes of this Agreement, the term “Cause” means (1) the Employee’s indictment for, or conviction of, a felony or other crime involving moral turpitude, or any crime or serious offense involving money or other property which constitutes a felony in the jurisdiction involved, (2) the Employee’s willful and continual neglect or failure to discharge duties (including fiduciary duties), responsibilities and obligations with respect to the Company hereunder; provided such neglect or failure, if susceptible of cure, remains uncured for a period of thirty (30) days after written notice describing the same is given to the Employee; provided further that isolated and insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Employee’s material breach of this Agreement or any other material agreement with the Company, (4) the

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Employee’s violation of Section 5 hereof or the Employee’s breach of any confidentiality provisions contained in the Proprietary Information and Inventions Agreement, or (5) any act of fraud or embezzlement by the Employee involving the Company or any of its Affiliates.

(d)Without Cause. The Company may at any time terminate the Employee’s employment hereunder without Cause upon written notice given by the Company to the Employee.

7. Termination by the Employee.

(a)Other than for Constructive Termination. The Employee may terminate his employment hereunder at any time, for any reason and for no reason, upon not less than sixty (60) days’ prior written notice to the Company.

(b)Constructive Termination. The Employee may terminate his employment hereunder upon written notice to the Company if any one or more of the following shall occur, each of which is deemed a Constructive Termination:

(i)a material breach of the terms of this Agreement by the Company and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company;

(ii)a relocation of the Employee’s place of employment to a location beyond a 30-mile radius of New Haven, Connecticut; or

(iii)a material breach by the Company of any other material agreement with the Employee and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company

Notwithstanding the foregoing, the Employee shall not be deemed to have a “Constructive Termination” unless the Employee gives the Company written notice of such a condition within ninety (90) days after such condition first comes into existence, the Company fails to remedy such condition within thirty (30) days after receiving the Employee’s written notice and the Employee terminates this Agreement not later than thirty (30) days after the Company so fails to remedy such condition.

8. Termination by Employee for Good Reason Following a Change in Control.

In addition to Section 7(b)(i) through (iii) above, during the period commencing on the Change in Control (as defined in Section 14) and ending on the eighteen (18) month anniversary of such Change in Control, the Employee may terminate this Agreement upon expiration of ninety (90) days’ prior written notice if “Good Reason” exists for the Employee’s termination. For this purpose, termination by the Employee for “Good Reason” shall mean a termination by the Employee of his employment hereunder following the initial occurrence, without his prior written consent, of any of the following events, unless the

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Company or its successor fully cures all grounds for such termination within thirty (30) days after receipt of the Employee’s written notice (it being understood that a termination of employment hereunder shall only be for Good Reason if the Employee terminates his employment not later than thirty (30) days after the Company so fails to cure such grounds):

(a)any material adverse change in the Employee's authority, duties, titles or offices (including reporting responsibility), from those existing immediately prior to the Change in Control;

(b)a diminution of the Employee’s Base Salary or annual bonus opportunity as provided for in Section 3; or

(c)the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company upon a merger, consolidation, sale or similar transaction.

9. Severance and Benefit Continuation.

(a)Termination for Cause or Voluntary Termination. In the event of a termination of the Employee’s employment by the Company for Cause pursuant to Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no severance or other termination pay or benefits shall be due to the Employee and the only obligation of the Company shall be to pay the Employee any accrued but unpaid Base Salary as of the date of termination and any accrued but unpaid vacation as of the date of termination (the “Accrued Obligations”), which amounts shall be paid to the Employee within thirty (30) days of the date of termination. In the event of a termination of the Employee’s employment pursuant to Section 7(a), the Company may elect to waive the period of notice required by Section 7(a), or any portion thereof, and, if the Company so elects, the Company will pay the Employee his Base Salary for the period so waived. Upon a termination covered by this Section 9(a), the Employee shall have the same opportunity to continue group health benefits at the Employee’s expense in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available generally to other employees terminating employment with the Company. Any outstanding equity awards previously granted to the Employee under the Equity Plan shall be treated in accordance with the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. A termination of the Employee’s employment that occurs by reason of the Employee’s notice to the Company of non-renewal of the Term under Section 2 hereof will be treated as a termination by the Employee under Section 7(a).

(b)Termination for Death or Disability. In the event of termination of the Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the death or disability of the Employee, the Company shall pay the Employee (or his estate in the event of a termination due to death), a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365 and shall provide the Health Continuation Benefits (as defined in Section 9(c)(ii)). In the event of

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a termination of the Employee’s employment due to death, the Company shall also pay to the Employee’s estate an amount equal to three (3) months of Base Salary. The Base Salary (if applicable) and the pro-rata bonus shall be paid within thirty (30) days of the date of termination. All Time-Vesting Equity Awards previously granted to the Employee shall become immediately vested and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such awards were granted. All other equity awards previously granted to the Employee will vest as determined in good faith by the Board of Directors based on the percentage of goals and objectives achieved by the Employee and the Company.

(c)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination, or Non-Renewal by the Company. If (1) the Company terminates the Employee’s employment pursuant to Section 6(d) hereof, (2) the Employee terminates his employment pursuant to Section 7(b) hereof or (3) at the end of the Term of this Agreement the Employee shall cease to be employed by the Company by reason of the Company’s decision not to renew the Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of employment does not occur within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee two (2) times the amount equal to the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the greater of (I) the average bonus received by the Employee from the Company for the two years preceding the year in whichhis termination of employment occurs or (II) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and

(ii)if the Employee timely elects to continue his participation and that of his eligible dependents in the Company’s group medical, dental and vision plans under COBRA, the Company shall pay the Employee a lump-sum amount that, after all applicable taxes and withholdings are deducted, is the economic equivalent of the monthly health premiums paid by the Company on behalf of the Employee and his eligible dependents immediately prior to the date of his Separation from Service for a period of eighteen (18) months (the “Health Continuation Benefits”); provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(iii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

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(iv)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.

(d)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination or for Good Reason, or Non-Renewal by the Company, Upon a Change in Control. In the event that (1) the Company terminates this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this Agreement Following Constructive Termination under Section 7(b) hereof or for Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the Company, and in each case the termination of employment or Non-Renewal occurs within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee three (3) times the amount equal to the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the greater of (I) the average bonus received by the Employee from the Company for the two years preceding the year in whichhis termination of employment occurs or (II) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and the Company shall provide the Employee with the Health Continuation Benefits; provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(ii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee under the Equity Plan shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

(iii)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. All other non-time vesting awards previously granted to the Employee, but not earned as of the date of termination of employment, will vest, if at all, as determined in good faith by the Board of Directors based upon the achievement of performance conditions by the Employee and the Company.

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(e)The payments provided in Section 9(c) and 9(d) are intended as enhanced severance for a termination by the Company or by the Employee in the circumstances provided and are subject to the Employee’s continued compliance with the provisions of Section 5 hereof. As a condition to receiving such payments, the Employee shall first execute and deliver a general release of all claims against the Company, its Affiliates, agents and employees (other than any claims or rights pursuant to this Agreement or pursuant to equity or employee benefit plans), in a form and substance reasonably satisfactory to the Company (the “Release”). Any such payments and benefits shall be paid in a lump sum sixty (60) days after the Employee’s Separation from Service, subject to Section 9(g) below. The Employee must execute and return the Release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline will in no event be later than fifty (50) days after the Employee’s Separation from Service. If the Employee fails to return the Release on or before the Release Deadline, or if the Release is revoked by the Employee, then the Employee will not be entitled to the payments described in Section 9(c) and 9(d).

(f)Termination of Employment and Separation from Service. All references in the Agreement to termination of employment, a termination, retirement, cessation of employment, separation from service, and correlative terms, that result in the payment or vesting of any amounts or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be construed to require a Separation from Service, and the date of such termination in any such case shall be construed to mean the date of the Separation from Service.

(g)Payment to a “Specified Employee”. To the extent any payment hereunder that is payable by reason of termination of the Employee’s employment constitutes “nonqualified deferred compensation” subject to Section 409A and would otherwise have been required to be paid during the six (6)-month period following such termination of employment, it shall instead (unless at the relevant time the Employee is no longer a Specified Employee) be delayed and paid, without interest, in a lump sum on the date that is six (6) months and one (1) day after the Employee’s termination (or, if earlier, the date of the Employee’s death).

(h)In the event that the Employee’s employment with the Company terminates for any reason, except as otherwise expressly provided by the Company, the Employee’s employment with, or other service to, all Affiliates of the Company by which he is then employed or otherwise engaged in service shall automatically and immediately terminate.

10. Cooperation.

Following his termination of employment, the Employee agrees to cooperate with, and assist, the Company to ensure a smooth transition in management and, if requested by the Company, will make himself available to consult during regular business hours at mutually agreed upon times for up to a three month period thereafter. At any time following his termination of employment, the Employee will provide such information as the Company may reasonably request with respect to any Company-related transaction or other matter in which the Employee was involved in any way while employed by the Company. The Employee further agrees, during the Term of this Agreement and thereafter, to assist and cooperate with

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the Company in connection with the defense or prosecution of any claim that may be made against, or by, the Company or its Affiliates, in connection with any dispute or claim of any kind involving the Company or its Affiliates, including providing testimony in any proceeding before any arbitral, administrative, judicial, legislative or other body or agency. Provided such expenses have been authorized by the Company, the Employee shall be entitled to reimbursement for all properly documented expenses incurred in connection with rendering services under this Section, including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses and legal fees, and, in addition, the Employee shall be entitled to a per diem amount for his services rendered under this Section equal to twice his then most recent annualized Base Salary under this Agreement, divided by 240.

11. Indemnification.

The Company shall indemnify the Employee to the fullest extent permitted by applicable law and its then-current articles of incorporation and by-laws. The Employee agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his employment with the Company, or consultant pursuant to Section 10 above. The Company shall provide, at its expense, Directors and Officers insurance for the Employee in amounts reasonably satisfactory to the Employee, to the extent such insurance is available at reasonable rates, which determination shall be made by the Board of Directors. The Indemnification Agreement previously entered into between the Employee and the Company remains in full force and effect.

12. Excise Tax.

If any payment or benefit that Employee would receive following a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (b) the largest portion, up to and including the total amount, of the Payment, whichever of the amounts determined under (a) and (b), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of outstanding awards under the Equity Plan; and reduction of employee benefits. In the event that acceleration of vesting of outstanding awards under the Equity Plan is to be reduced, such acceleration of vesting shall be undertaken in the reverse order of the date of grant of the Employee’s outstanding equity awards.

The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control of the Company shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as

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accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint another, nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Employee and the Company within a commercially reasonable period of time after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company). Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Employee and the Company.

13. No Mitigation.

The Employee shall not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor shall the amount of any payment provided for hereunder be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of employment by the Company (other than as described above in Section 9(c)(ii) and Section 9(d)(ii)).

14. Definitions.

As used herein, the following terms have the following meaning:

(a)“Affiliate” means and includes any person, corporation or other entity controlling, controlled by or under common control with the corporation in question.

(b)“Change in Control” means the occurrence of any of the following events:

(i)Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 40% of the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors (“Voting Securities”) of the Company, or

(ii)Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) as of the beginning of any twenty-four month period (not including any period prior to the date of this Agreement), cease for any reason to constitute at least a majority of the Directors. Notwithstanding the foregoing, any individual becoming a Director subsequent to the beginning of such period, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or

(iii)Consummation by the Company of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the

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Beneficial Owners of the Voting Securities immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, 50% or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or

(iv)Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 50% of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.

For purposes of this definition 14(b), the following terms shall have the meanings set forth below:

(A)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;

(B)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and

(C)“Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Restricted Period” shall mean twenty-four (24) months.

(e)“Separation from Service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The Board of Directors or the Compensation Committee of the Board of Directors may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Agreement.

(f)“Specified Employee” shall mean an individual determined by the Board of Directors, Compensation Committee of the Board of Directors or their delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Committee

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may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of the Agreement.

15. Representations by Employee.

The Employee represents and warrants that he has full right, power and authority to execute the terms of this Agreement; this Agreement has been duly executed by the Employee and such execution and the performance of this Agreement by the Employee does not result in any conflict, breach or violation of or default under any other agreement or any judgment, order or decree to which the Employee is a party or by which he is bound. The Employee acknowledges and agrees that any material breach of the representations set forth in this Section will constitute Cause under Section 6.

16. Arbitration.

Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of Employee’s employment and the termination of such employment, shall be settled by arbitration in Connecticut, in accordance with the employment dispute rules then existing of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Such claims shall include, without limitation, claims for breach of contract or breach of the covenant of good faith and fair dealing, any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA, and/or any applicable or equivalent state or local laws, claims for wrongful termination, including employment termination in violation of public policy, and claims for personal injury including, without limitation, defamation, fraud and infliction of emotional distress. The parties shall be free to pursue any remedy before the arbitrator that they shall be otherwise permitted to pursue in a court of competent jurisdiction. As a material part of this agreement to arbitrate claims, the Employee and the Company expressly waive all rights to a jury trial in court on all statutory or other claims. The award of the arbitrator shall be final and binding. The costs of the American Arbitration Association and the arbitrator will be borne equally by the Company and the Employee. Nothing contained herein, however, shall limit the right of the Company or any of its Affiliates to seek equitable or other relief from any court of competent jurisdiction for violation of any provision of Sections 4 and 5 above.

17. Recoupment.

The Employee hereby acknowledges and agrees that the annual bonus described in Section 3(b) and all other payments of incentive-based compensation payable to the Employee by the Company or its Affiliates (whether under this Agreement or otherwise) shall be subject to any applicable clawback or recoupment policy of the Company, as such policy may be amended and in effect from time to time, and shall be subject to recoupment as otherwise

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required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.

18. Notices.

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:

Alexion Pharmaceuticals, Inc.

100 College Street

New Haven, Connecticut 06510

Telephone: (203) 272-2596

Fax: (203) 271-8198

Attn: General Counsel

If to the Employee: to the Employee’s Address on file with the Company.

19. General.

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut applicable to agreements made and to be performed entirely in Connecticut by Connecticut residents.

(b)This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof, except for the Proprietary Information and Inventions Agreement and the Indemnification Agreement. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

(c)This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or any one or more or continuing waivers of any such breach, shall constitute a waiver of the breach of any other term or covenant contained in this Agreement.

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(d)This Agreement shall be binding upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto. The Company may not assign its rights and obligation under this Agreement without the prior written consent of the Employee, except to a successor of substantially all the Company’s business which expressly assumes the Company’s obligations hereunder in writing. In the event of a sale of all or substantially all of the assets of the Company, the Company shall use its best efforts to cause the purchaser to expressly assume this Agreement. The Employee may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except by will or operation of law, provided that the Employee may designate beneficiaries to receive any payments permitted under the terms of the Company’s benefit plans.

(e)If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)Provisions of this Agreement shall survive any termination of employment if so provided herein or if necessary or desirable fully to accomplish the purposes of other surviving provisions, including without limitation, the obligations of the Employee under Section 5 hereof. Upon termination of the Employee’s employment hereunder by either the Employee or the Company as permitted hereby, all rights, duties and obligations of the Employee and the Company to each other pursuant to this Agreement shall cease, except for the provisions hereof that contemplate performance after termination, including without limitation the obligations of the Employee under Section 5 hereof.

(g)This Agreement is intended to comply with the applicable requirements of Section 409A and shall be construed accordingly. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ALEXION PHARMACEUTICALS, INC.

By:        /s/ Clare Carmichael        

Name: Clare A. Carmichael

Title: EVP & Chief Human Resources Officer

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EMPLOYEE

/s/ David Hallal        

David Hallal

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of February 26, 2016 by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Vikas Sinha (the “Employee”).

WITNESSETH

WHEREAS, the Company agrees to employ the Employee, subject to the terms and conditions contained in this Agreement; and

WHEREAS, the Employee agrees to accept employment with the Company, subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. Employment Duties and Acceptance.

(a)The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company as Executive Vice President and Chief Financial Officer, or such other position determined by the Company, and to perform such duties commensurate with such office or other office as the Employee shall reasonably be directed by the Company to perform. The Employee hereby accepts such employment and agrees to render the services described above. The Employee shall report to the Chief Executive Officer of the Company.

(b)During the Term, the Employee shall devote his full business time and his best efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder. Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full time employee, it is understood that the Employee, with consent of the Chief Executive Officer,may (1) have non full-time academic appointments; (2) participate in professional activities; (3) publish academic articles; and (4) participate in community and/or philanthropic activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.

2. Term of Employment.

The term of the Employee’s employment under this Agreement shall commence as of February 26, 2016 (the “Effective Date”) and shall end on the third anniversary thereof, unless

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sooner terminated pursuant to Section 6, 7 or 8 of this Agreement. Notwithstanding the foregoing, unless notice is given by the Employee or the Company at least sixty (60) days prior to the expiration of the Term of this Agreement (or at least sixty (60) days prior to the expiration of any extension hereof), the Term of the Agreement shall be automatically extended by one (1) year from the date it would otherwise end (whether upon expiration of the original Term or any extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8 hereof. The term of this Agreementas from time to time extended or renewed is hereafter referred to as “the Term of this Agreement” or “the Term”.

3. Compensation and Benefits.

(a)As compensation for services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, an annual base salary of $714,000 as adjusted from time to time, which base salary as so adjusted, shall be not less than the Employee’s base salary in effect immediately prior to the Effective Date (the “Base Salary”), payable in accordance with its regular payroll practices. The Employee’s Base Salary hereunder shall be reviewed at least annually thereafter during the Term of the Agreement for increase at the discretion of the Company.

(b)The Company agrees that the Employee shall be eligible for an annual performance bonus from the Company with respect to each fiscal year of the Company that ends during the Term, pursuant to the Company’s management incentive bonus program in effect from time to time (such plan, as so in effect, the “Bonus Plan”). The Employee’s target bonus under the Bonus Plan will be 70% of the Base Salary. The actual amount of any such bonus payable to the Employee under the Bonus Plan shall be determined by the Board of Directors of the Company (the “Board”) or the Compensation Committee thereof (the “Committee”) and paid by the Company in accordance with the terms of the Bonus Plan, subject to the Employee’s remaining employed on the date that bonuses are paid under the Bonus Plan, except as otherwise expressly provided herein.

(c)The Employee shall be eligible to receive stock-based awards under the equity incentive plan or program maintained by the Company as in effect from time to time (such plan, as so in effect, the “Equity Plan”) in the discretion of the Board or the Committee. Any such stock-based award will be subject to the terms of the Equity Plan, the terms of the award agreement evidencing such stock-based award, and such other restrictions and limitations as are generally applicable to shares of the Company’s common stock or Company employees or otherwise imposed by law.

(d)The Company shall pay or reimburse the Employee for all reasonable, customary and necessary business expenses actually incurred or paid by the Employee during the Term in the performance of services under this Agreement, subject to travel and other policies and such reasonable substantiation and documentation as may be required by the Company from time to time, provided that (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year, (ii) reimbursement is made not later than December

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31 of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement is not subject to liquidation or exchange for any other benefit.

(e)During the Term, the Employee shall be eligible to participate in all employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided under this Agreement (e.g., a severance pay plan). Participation in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law.

(f)During the Term, the Employee shall be eligible for paid vacation of four weeks and twopersonal days per calendar year taken in accordance with applicable Company policy.

4. Confidentiality.

The Employee acknowledges and agrees that he remains bound by the terms and conditions of the Proprietary Information and Inventions Agreement previously entered into with the Company. Notwithstanding any other provision of this Agreement, the Employee shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement which shall survive the termination of this Agreement in accordance with its terms.

5. Non-Competition, Non-Solicitation and Non-Disparagement.

(a)During the Term, the Employee shall not (1) provide any services, directly or indirectly, to any other business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion, or (2) participate in the formation of any business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained in this Section 5(a) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit the Employee’s Permitted Activities pursuant to Section 1(b).

(b)Upon a termination of the Employee’s employment by the Company for any reason other than pursuant to Section 6(a) or Section 6(b), or upon a termination of the Employee’s employment by the Employee for any reason, following such termination of employment and during the Restricted Period, the Employee shall not,directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer, or otherwise, compete with the Company or any of its Affiliates, or undertake any planning for any business competitive with the Company or any of its Affiliates. Specifically, but without limiting the foregoing, during the Restricted Period the Employee will not: (1) provide any services directly or indirectly, whether as an employee or independent contractor or otherwise, whether

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with or without compensation, to any other business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates; (2) participate in the formation of any business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates, (3) directly or indirectly seek to employ, any person employed by the Company or any of its Affiliates anywhere in the world, or otherwise encourage or entice any such person to leave such employment; (4) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates anywhere in the world to terminate or diminish its relationship with the Company or its Affiliates; or (5) solicit or encourage any customer, consultant, or vendor of the Company or its Affiliates anywhere in the world, to terminate or diminish its relationship with the Company or its Affiliates; provided, however, that nothing contained in this Section 5(b) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit Employee’s Permitted Activities pursuant to Section 1(b). This Section 5(b) shall be subject to written waivers that may be obtained by the Employee from the Company.

(c)At no time during the Term of this Agreement or thereafter, regardless of the reason for termination, will Employee knowingly make any written or verbal untrue statement that disparages the Company, its Affiliates, its business, its management, or its products in communications with any customer, client or the public. The employee will, furthermore, not otherwise do or say anything that could disrupt the good morale of employees of the Company or any of its Affiliates, or that harms the interests or reputation of the Company or any of its Affiliates.

(d)Nothing in this Agreement or the Proprietary Information and Inventions Agreement limits, restricts, or in any other way affects the Employee’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.

(e)The Employee acknowledges that he has read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 5(a)-(c) above. The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and are reasonable in respect to subject matter, length of time, and geographic area. If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 5, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company. The Employee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Employee of any of the provisions of this Section 5, without having

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to post bond. So that the Company may enjoy the full benefit of the covenants contained above, the Employee agrees that the Restricted Period shall be tolled, and shall not run, during the period of any breach by the Employee of such covenants.

(f)If any of the covenants contained in this Section 5, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

(g)If any of the covenants contained in this Section 5, or any part thereof, is held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and that the parties intend for the court to modify the duration and/or area of such provision to the maximum extent permitted by law. The parties agree that in its reduced form, such provision shall then be enforceable.

(h)In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

6. Termination by the Company.

The Company may terminate the employment of the Employee as follows during the Term of this Agreement if any one or more of the following shall occur:

(a)Death. If the Employee shall die during the Term, the Employee’s employment hereunder shall automatically terminate.

(b)Disability. If the Employee shall become physically or mentally disabled so that the Employee is unable substantially to perform his services hereunder for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating to 180 days during any twelve-month period, the Company may terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.

(c)For Cause. If the Employee acts, or fails to act, in a manner that provides Cause for termination, the Company may at any time terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee. For purposes of this Agreement, the term “Cause” means (1) the Employee’s indictment for, or conviction of, a felony or other crime involving moral turpitude, or any crime or serious offense involving money or other property which constitutes a felony in the jurisdiction involved, (2) the Employee’s willful and continual neglect or failure to discharge duties (including fiduciary duties), responsibilities and obligations with respect to the Company hereunder; provided such neglect or failure, if susceptible of cure, remains uncured for a period of thirty (30) days after

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written notice describing the same is given to the Employee; provided further that isolated and insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Employee’s material breach of this Agreement or any other material agreement with the Company, (4) the Employee’s violation of Section 5 hereof or the Employee’s breach of any confidentiality provisions contained in the Proprietary Information and Inventions Agreement, or (5) any act of fraud or embezzlement by the Employee involving the Company or any of its Affiliates.

(d)Without Cause. The Company may at any time terminate the Employee’s employment hereunder without Cause upon written notice given by the Company to the Employee.

7. Termination by the Employee.

(a)Other than for Constructive Termination. The Employee may terminate his employment hereunder at any time, for any reason and for no reason, upon not less than sixty (60) days’ prior written notice to the Company.

(b)Constructive Termination. The Employee may terminate his employment hereunder upon written notice to the Company if any one or more of the following shall occur, each of which is deemed a Constructive Termination:

(i)a material breach of the terms of this Agreement by the Company and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company;

(ii)a relocation of the Employee’s place of employment to a location beyond a 30-mile radius of New Haven, Connecticut; or

(iii)a material breach by the Company of any other material agreement with the Employee and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company

Notwithstanding the foregoing, the Employee shall not be deemed to have a “Constructive Termination” unless the Employee gives the Company written notice of such a condition within ninety (90) days after such condition first comes into existence, the Company fails to remedy such condition within thirty (30) days after receiving the Employee’s written notice and the Employee terminates this Agreement not later than thirty (30) days after the Company so fails to remedy such condition.

8. Termination by Employee for Good Reason Following a Change in Control.

In addition to Section 7(b)(i) through (iii) above, during the period commencing on the Change in Control (as defined in Section 14) and ending on the eighteen (18) month anniversary of such Change in Control, the Employee may terminate this Agreement upon expiration of ninety (90) days’ prior written notice if “Good Reason” exists for the

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Employee’s termination. For this purpose, termination by the Employee for “Good Reason” shall mean a termination by the Employee of his employment hereunder following the initial occurrence, without his prior written consent, of any of the following events, unless the Company or its successor fully cures all grounds for such termination within thirty (30) days after receipt of the Employee’s written notice (it being understood that a termination of employment hereunder shall only be for Good Reason if the Employee terminates his employment not later than thirty (30) days after the Company so fails to cure such grounds):

(a)any material adverse change in the Employee's authority, duties, titles or offices (including reporting responsibility), from those existing immediately prior to the Change in Control;

(b)a diminution of the Employee’s Base Salary or annual bonus opportunity as provided for in Section 3; or

(c)the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company upon a merger, consolidation, sale or similar transaction.

9. Severance and Benefit Continuation.

(a)Termination for Cause or Voluntary Termination. In the event of a termination of the Employee’s employment by the Company for Cause pursuant to Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no severance or other termination pay or benefits shall be due to the Employee and the only obligation of the Company shall be to pay the Employee any accrued but unpaid Base Salary as of the date of termination and any accrued but unpaid vacation as of the date of termination (the “Accrued Obligations”), which amounts shall be paid to the Employee within thirty (30) days of the date of termination. In the event of a termination of the Employee’s employment pursuant to Section 7(a), the Company may elect to waive the period of notice required by Section 7(a), or any portion thereof, and, if the Company so elects, the Company will pay the Employee his Base Salary for the period so waived. Upon a termination covered by this Section 9(a), the Employee shall have the same opportunity to continue group health benefits at the Employee’s expense in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available generally to other employees terminating employment with the Company. Any outstanding equity awards previously granted to the Employee under the Equity Plan shall be treated in accordance with the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. A termination of the Employee’s employment that occurs by reason of the Employee’s notice to the Company of non-renewal of the Term under Section 2 hereof will be treated as a termination by the Employee under Section 7(a).

(b)Termination for Death or Disability. In the event of termination of the Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the death or disability of the Employee, the Company shall pay the Employee (or his estate in the event of a termination due to death), a pro-rata annual bonus for the year in which such termination of employment occurs,

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calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365 and shall provide the Health Continuation Benefits (as defined in Section 9(c)(ii)). In the event of a termination of the Employee’s employment due to death, the Company shall also pay to the Employee’s estate an amount equal to three (3) months of Base Salary. The Base Salary (if applicable) and the pro-rata bonus shall be paid within thirty (30) days of the date of termination. All Time-Vesting Equity Awards previously granted to the Employee shall become immediately vested and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such awards were granted. All other equity awards previously granted to the Employee will vest as determined in good faith by the Board of Directors based on the percentage of goals and objectives achieved by the Employee and the Company.

(c)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination, or Non-Renewal by the Company. If (1) the Company terminates the Employee’s employment pursuant to Section 6(d) hereof, (2) the Employee terminates his employment pursuant to Section 7(b) hereof or (3) at the end of the Term of this Agreement the Employee shall cease to be employed by the Company by reason of the Company’s decision not to renew the Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of employment does not occur within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee 1.5 times the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and

(ii)if the Employee timely elects to continue his participation and that of his eligible dependents in the Company’s group medical, dental and vision plans under COBRA, the Company shall pay the Employee a lump-sum amount that, after all applicable taxes and withholdings are deducted, is the economic equivalent of the monthly health premiums paid by the Company on behalf of the Employee and his eligible dependents immediately prior to the date of his Separation from Service for a period of eighteen (18) months (the “Health Continuation Benefits”); provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(iii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

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(iv)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.

(d)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination or for Good Reason, or Non-Renewal by the Company, Upon a Change in Control. In the event that (1) the Company terminates this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this Agreement Following Constructive Termination under Section 7(b) hereof or for Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the Company, and in each case the termination of employment or Non-Renewal occurs within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee two (2) times the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. The Company shall also pay the Employee a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and the Company shall provide the Employee with the Health Continuation Benefits; provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(ii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee under the Equity Plan shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

(iii)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. All other non-time vesting awards previously granted to the Employee, but not earned as of the date of termination of employment, will vest, if at all, as determined in good faith by

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the Board of Directors based upon the achievement of performance conditions by the Employee and the Company.

(e)The payments provided in Section 9(c) and 9(d) are intended as enhanced severance for a termination by the Company or by the Employee in the circumstances provided and are subject to the Employee’s continued compliance with the provisions of Section 5 hereof. As a condition to receiving such payments, the Employee shall first execute and deliver a general release of all claims against the Company, its Affiliates, agents and employees (other than any claims or rights pursuant to this Agreement or pursuant to equity or employee benefit plans), in a form and substance reasonably satisfactory to the Company (the “Release”). Any such payments and benefits shall be paid in a lump sum sixty (60) days after the Employee’s Separation from Service, subject to Section 9(g) below. The Employee must execute and return the Release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline will in no event be later than fifty (50) days after the Employee’s Separation from Service. If the Employee fails to return the Release on or before the Release Deadline, or if the Release is revoked by the Employee, then the Employee will not be entitled to the payments described in Section 9(c) and 9(d).

(f)Termination of Employment and Separation from Service. All references in the Agreement to termination of employment, a termination, retirement, cessation of employment, separation from service, and correlative terms, that result in the payment or vesting of any amounts or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be construed to require a Separation from Service, and the date of such termination in any such case shall be construed to mean the date of the Separation from Service.

(g)Payment to a “Specified Employee”. To the extent any payment hereunder that is payable by reason of termination of the Employee’s employment constitutes “nonqualified deferred compensation” subject to Section 409A and would otherwise have been required to be paid during the six (6)-month period following such termination of employment, it shall instead (unless at the relevant time the Employee is no longer a Specified Employee) be delayed and paid, without interest, in a lump sum on the date that is six (6) months and one (1) day after the Employee’s termination (or, if earlier, the date of the Employee’s death).

(h)In the event that the Employee’s employment with the Company terminates for any reason, except as otherwise expressly provided by the Company, the Employee’s employment with, or other service to, all Affiliates of the Company by which he is then employed or otherwise engaged in service shall automatically and immediately terminate.

10. Cooperation.

Following his termination of employment, the Employee agrees to cooperate with, and assist, the Company to ensure a smooth transition in management and, if requested by the Company, will make himself available to consult during regular business hours at mutually agreed upon times for up to a three month period thereafter. At any time following his termination of employment, the Employee will provide such information as the Company may

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reasonably request with respect to any Company-related transaction or other matter in which the Employee was involved in any way while employed by the Company. The Employee further agrees, during the Term of this Agreement and thereafter, to assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against, or by, the Company or its Affiliates, in connection with any dispute or claim of any kind involving the Company or its Affiliates, including providing testimony in any proceeding before any arbitral, administrative, judicial, legislative or other body or agency. Provided such expenses have been authorized by the Company, the Employee shall be entitled to reimbursement for all properly documented expenses incurred in connection with rendering services under this Section, including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses and legal fees, and, in addition, the Employee shall be entitled to a per diem amount for his services rendered under this Section equal to twice his then most recent annualized Base Salary under this Agreement, divided by 240.

11. Indemnification.

The Company shall indemnify the Employee to the fullest extent permitted by applicable law and its then-current articles of incorporation and by-laws. The Employee agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his employment with the Company, or consultant pursuant to Section 10 above. The Company shall provide, at its expense, Directors and Officers insurance for the Employee in amounts reasonably satisfactory to the Employee, to the extent such insurance is available at reasonable rates, which determination shall be made by the Board of Directors. The Indemnification Agreement previously entered into between the Employee and the Company remains in full force and effect.

12. Excise Tax.

If any payment or benefit that Employee would receive following a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (b) the largest portion, up to and including the total amount, of the Payment, whichever of the amounts determined under (a) and (b), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of outstanding awards under the Equity Plan; and reduction of employee benefits. In the event that acceleration of vesting of outstanding awards under the Equity Plan is to be reduced, such acceleration of vesting shall be undertaken in the reverse order of the date of grant of the Employee’s outstanding equity awards.

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The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control of the Company shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint another, nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Employee and the Company within a commercially reasonable period of time after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company). Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Employee and the Company.

13. No Mitigation.

The Employee shall not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor shall the amount of any payment provided for hereunder be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of employment by the Company (other than as described above in Section 9(c)(ii) and Section 9(d)(ii)).

14. Definitions.

As used herein, the following terms have the following meaning:

(a)“Affiliate” means and includes any person, corporation or other entity controlling, controlled by or under common control with the corporation in question.

(b)“Change in Control” means the occurrence of any of the following events:

(i)Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 40% of the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors (“Voting Securities”) of the Company, or

(ii)Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) as of the beginning of any twenty-four month period (not including any period prior to the date of this Agreement), cease for any reason to constitute at least a majority of the Directors. Notwithstanding the foregoing, any individual becoming a Director subsequent to the beginning of such period, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or

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(iii)Consummation by the Company of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the Beneficial Owners of the Voting Securities immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, 50% or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or

(iv)Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 50% of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.

For purposes of this definition 14(b), the following terms shall have the meanings set forth below:

(A)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;

(B)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and

(C)“Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Restricted Period” shall mean eighteen (18) months.

(e)“Separation from Service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The Board of Directors or the Compensation Committee of the Board of Directors may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Agreement.

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(f)“Specified Employee” shall mean an individual determined by the Board of Directors, Compensation Committee of the Board of Directors or their delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of the Agreement.

15. Representations by Employee.

The Employee represents and warrants that he has full right, power and authority to execute the terms of this Agreement; this Agreement has been duly executed by the Employee and such execution and the performance of this Agreement by the Employee does not result in any conflict, breach or violation of or default under any other agreement or any judgment, order or decree to which the Employee is a party or by which he is bound. The Employee acknowledges and agrees that any material breach of the representations set forth in this Section will constitute Cause under Section 6.

16. Arbitration.

Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of Employee’s employment and the termination of such employment, shall be settled by arbitration in Connecticut, in accordance with the employment dispute rules then existing of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Such claims shall include, without limitation, claims for breach of contract or breach of the covenant of good faith and fair dealing, any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA, and/or any applicable or equivalent state or local laws, claims for wrongful termination, including employment termination in violation of public policy, and claims for personal injury including, without limitation, defamation, fraud and infliction of emotional distress. The parties shall be free to pursue any remedy before the arbitrator that they shall be otherwise permitted to pursue in a court of competent jurisdiction. As a material part of this agreement to arbitrate claims, the Employee and company expressly waive all rights to a jury trial in court on all statutory or other claims. The award of the arbitrator shall be final and binding. The costs of the American Arbitration Association and the arbitrator will be borne equally by the Company and the Employee. Nothing contained herein, however, shall limit the right of the Company or any of its Affiliates to seek equitable or other relief from any court of competent jurisdiction for violation of any provision of Sections 4 and 5 above.

17. Recoupment.

The Employee hereby acknowledges and agrees that the annual bonus described in Section 3(b) and all other payments of incentive-based compensation payable to the Employee by the Company or its Affiliates (whether under this Agreement or otherwise) shall be subject

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to any applicable clawback or recoupment policy of the Company, as such policy may be amended and in effect from time to time, and shall be subject to recoupment as otherwise required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.

18. Notices.

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:

Alexion Pharmaceuticals, Inc.

100 College Street

New Haven, Connecticut 06510

Telephone: (203) 272-2596

Fax: (203) 271-8198

Attn: General Counsel

If to the Employee: to the Employee’s Address on file with the Company.

19. General.

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut applicable to agreements made and to be performed entirely in Connecticut by Connecticut residents.

(b)This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof, except for the Proprietary Information and Inventions Agreement and the Indemnification Agreement. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

(c)This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance.

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The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or any one or more or continuing waivers of any such breach, shall constitute a waiver of the breach of any other term or covenant contained in this Agreement.

(d)This Agreement shall be binding upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto. The Company may not assign its rights and obligation under this Agreement without the prior written consent of the Employee, except to a successor of substantially all the Company’s business which expressly assumes the Company’s obligations hereunder in writing. In the event of a sale of all or substantially all of the assets of the Company, the Company shall use its best efforts to cause the purchaser to expressly assume this Agreement. The Employee may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except by will or operation of law, provided that the Employee may designate beneficiaries to receive any payments permitted under the terms of the Company’s benefit plans.

(e)If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)Provisions of this Agreement shall survive any termination of employment if so provided herein or if necessary or desirable fully to accomplish the purposes of other surviving provisions, including without limitation, the obligations of the Employee under Section 5 hereof. Upon termination of the Employee’s employment hereunder by either the Employee or the Company as permitted hereby, all rights, duties and obligations of the Employee and the Company to each other pursuant to this Agreement shall cease, except for the provisions hereof that contemplate performance after termination, including without limitation the obligations of the Employee under Section 5 hereof.

(g)This Agreement is intended to comply with the applicable requirements of Section 409A and shall be construed accordingly. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ALEXION PHARMACEUTICALS, INC.

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By:         /s/ Clare Carmichael        

Name: Clare A. Carmichael

Title: EVP & Chief Human Resources Officer

EMPLOYEE

/s/ Vikas Sinha            

Vikas Sinha

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EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of February 26, 2016 by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Clare A. Carmichael (the “Employee”).

WITNESSETH

WHEREAS, the Company agrees to employ the Employee, subject to the terms and conditions contained in this Agreement; and

WHEREAS, the Employee agrees to accept employment with the Company, subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. Employment Duties and Acceptance.

(a)The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company as Executive Vice President and Chief Human Resources Officer, or such other position determined by the Company, and to perform such duties commensurate with such office or other office as the Employee shall reasonably be directed by the Company to perform. The Employee hereby accepts such employment and agrees to render the services described above. The Employee shall report to the Chief Executive Officer of the Company.

(b)During the Term, the Employee shall devote her full business time and her best efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of her duties and responsibilities hereunder. Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full time employee, it is understood that the Employee, with consent of the Chief Executive Officer,may (1) have non full-time academic appointments; (2) participate in professional activities; (3) publish academic articles; and (4) participate in community and/or philanthropic activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.

2. Term of Employment.

The term of the Employee’s employment under this Agreement shall commence as of February 26, 2016 (the “Effective Date”) and shall end on the third anniversary thereof, unless

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sooner terminated pursuant to Section 6, 7 or 8 of this Agreement. Notwithstanding the foregoing, unless notice is given by the Employee or the Company at least sixty (60) days prior to the expiration of the Term of this Agreement (or at least sixty (60) days prior to the expiration of any extension hereof), the Term of the Agreement shall be automatically extended by one (1) year from the date it would otherwise end (whether upon expiration of the original Term or any extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8 hereof. The term of this Agreementas from time to time extended or renewed is hereafter referred to as “the Term of this Agreement” or “the Term”.

3. Compensation and Benefits.

(a)As compensation for services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, an annual base salary of $590,000 as adjusted from time to time, which base salary as so adjusted, shall be not less than the Employee’s base salary in effect immediately prior to the Effective Date (the “Base Salary”), payable in accordance with its regular payroll practices. The Employee’s Base Salary hereunder shall be reviewed at least annually thereafter during the Term of the Agreement for increase at the discretion of the Company.

(b)The Company agrees that the Employee shall be eligible for an annual performance bonus from the Company with respect to each fiscal year of the Company that ends during the Term, pursuant to the Company’s management incentive bonus program in effect from time to time (such plan, as so in effect, the “Bonus Plan”). The Employee’s target bonus under the Bonus Plan will be 70% of the Base Salary. The actual amount of any such bonus payable to the Employee under the Bonus Plan shall be determined by the Board of Directors of the Company (the “Board”) or the Compensation Committee thereof (the “Committee”) and paid by the Company in accordance with the terms of the Bonus Plan, subject to the Employee’s remaining employed on the date that bonuses are paid under the Bonus Plan, except as otherwise expressly provided herein.

(c)The Employee shall be eligible to receive stock-based awards under the equity incentive plan or program maintained by the Company as in effect from time to time (such plan, as so in effect, the “Equity Plan”) in the discretion of the Board or the Committee. Any such stock-based award will be subject to the terms of the Equity Plan, the terms of the award agreement evidencing such stock-based award, and such other restrictions and limitations as are generally applicable to shares of the Company’s common stock or Company employees or otherwise imposed by law.

(d)The Company shall pay or reimburse the Employee for all reasonable, customary and necessary business expenses actually incurred or paid by the Employee during the Term in the performance of services under this Agreement, subject to travel and other policies and such reasonable substantiation and documentation as may be required by the Company from time to time, provided that (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year, (ii) reimbursement is made not later than December

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31 of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement is not subject to liquidation or exchange for any other benefit.

(e)During the Term, the Employee shall be eligible to participate in all employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided under this Agreement (e.g., a severance pay plan). Participation in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law.

(f)During the Term, the Employee shall be eligible for paid vacation of four weeks and twopersonal days per calendar year taken in accordance with applicable Company policy.

4. Confidentiality.

The Employee acknowledges and agrees that she remains bound by the terms and conditions of the Proprietary Information and Inventions Agreement previously entered into with the Company. Notwithstanding any other provision of this Agreement, the Employee shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement which shall survive the termination of this Agreement in accordance with its terms.

5. Non-Competition, Non-Solicitation and Non-Disparagement.

(a)During the Term, the Employee shall not (1) provide any services, directly or indirectly, to any other business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion, or (2) participate in the formation of any business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained in this Section 5(a) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit the Employee’s Permitted Activities pursuant to Section 1(b).

(b)Upon a termination of the Employee’s employment by the Company for any reason other than pursuant to Section 6(a) or Section 6(b), or upon a termination of the Employee’s employment by the Employee for any reason, following such termination of employment and during the Restricted Period, the Employee shall not,directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer, or otherwise, compete with the Company or any of its Affiliates, or undertake any planning for any business competitive with the Company or any of its Affiliates. Specifically, but without limiting the foregoing, during the Restricted Period the Employee will not: (1) provide any services directly or indirectly, whether as an employee or independent contractor or otherwise, whether

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with or without compensation, to any other business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates; (2) participate in the formation of any business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates, (3) directly or indirectly seek to employ, any person employed by the Company or any of its Affiliates anywhere in the world, or otherwise encourage or entice any such person to leave such employment; (4) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates anywhere in the world to terminate or diminish its relationship with the Company or its Affiliates; or (5) solicit or encourage any customer, consultant, or vendor of the Company or its Affiliates anywhere in the world, to terminate or diminish its relationship with the Company or its Affiliates; provided, however, that nothing contained in this Section 5(b) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit Employee’s Permitted Activities pursuant to Section 1(b). This Section 5(b) shall be subject to written waivers that may be obtained by the Employee from the Company.

(c)At no time during the Term of this Agreement or thereafter, regardless of the reason for termination, will Employee knowingly make any written or verbal untrue statement that disparages the Company, its Affiliates, its business, its management, or its products in communications with any customer, client or the public. The employee will, furthermore, not otherwise do or say anything that could disrupt the good morale of employees of the Company or any of its Affiliates, or that harms the interests or reputation of the Company or any of its Affiliates.

(d)Nothing in this Agreement or the Proprietary Information and Inventions Agreement limits, restricts, or in any other way affects the Employee’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.

(e)The Employee acknowledges that she has read and considered all the terms and conditions of this Agreement, including the restraints imposed upon her pursuant to Sections 5(a)-(c) above. The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and are reasonable in respect to subject matter, length of time, and geographic area. If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 5, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company. The Employee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Employee of any of the provisions of this Section 5, without having

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to post bond. So that the Company may enjoy the full benefit of the covenants contained above, the Employee agrees that the Restricted Period shall be tolled, and shall not run, during the period of any breach by the Employee of such covenants.

(f)If any of the covenants contained in this Section 5, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

(g)If any of the covenants contained in this Section 5, or any part thereof, is held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and that the parties intend for the court to modify the duration and/or area of such provision to the maximum extent permitted by law. The parties agree that in its reduced form, such provision shall then be enforceable.

(h)In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

6. Termination by the Company.

The Company may terminate the employment of the Employee as follows during the Term of this Agreement if any one or more of the following shall occur:

(a)Death. If the Employee shall die during the Term, the Employee’s employment hereunder shall automatically terminate.

(b)Disability. If the Employee shall become physically or mentally disabled so that the Employee is unable substantially to perform her services hereunder for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating to 180 days during any twelve-month period, the Company may terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.

(c)For Cause. If the Employee acts, or fails to act, in a manner that provides Cause for termination, the Company may at any time terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee. For purposes of this Agreement, the term “Cause” means (1) the Employee’s indictment for, or conviction of, a felony or other crime involving moral turpitude, or any crime or serious offense involving money or other property which constitutes a felony in the jurisdiction involved, (2) the Employee’s willful and continual neglect or failure to discharge duties (including fiduciary duties), responsibilities and obligations with respect to the Company hereunder; provided such neglect or failure, if susceptible of cure, remains uncured for a period of thirty (30) days after

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written notice describing the same is given to the Employee; provided further that isolated and insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Employee’s material breach of this Agreement or any other material agreement with the Company, (4) the Employee’s violation of Section 5 hereof or the Employee’s breach of any confidentiality provisions contained in the Proprietary Information and Inventions Agreement, or (5) any act of fraud or embezzlement by the Employee involving the Company or any of its Affiliates.

(d)Without Cause. The Company may at any time terminate the Employee’s employment hereunder without Cause upon written notice given by the Company to the Employee.

7. Termination by the Employee.

(a)Other than for Constructive Termination. The Employee may terminate her employment hereunder at any time, for any reason and for no reason, upon not less than sixty (60) days’ prior written notice to the Company.

(b)Constructive Termination. The Employee may terminate her employment hereunder upon written notice to the Company if any one or more of the following shall occur, each of which is deemed a Constructive Termination:

(i)a material breach of the terms of this Agreement by the Company and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company;

(ii)a relocation of the Employee’s place of employment to a location beyond a 30-mile radius of New Haven, Connecticut; or

(iii)a material breach by the Company of any other material agreement with the Employee and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company

Notwithstanding the foregoing, the Employee shall not be deemed to have a “Constructive Termination” unless the Employee gives the Company written notice of such a condition within ninety (90) days after such condition first comes into existence, the Company fails to remedy such condition within thirty (30) days after receiving the Employee’s written notice and the Employee terminates this Agreement not later than thirty (30) days after the Company so fails to remedy such condition.

8. Termination by Employee for Good Reason Following a Change in Control.

In addition to Section 7(b)(i) through (iii) above, during the period commencing on the Change in Control (as defined in Section 14) and ending on the eighteen (18) month anniversary of such Change in Control, the Employee may terminate this Agreement upon expiration of ninety (90) days’ prior written notice if “Good Reason” exists for the

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Employee’s termination. For this purpose, termination by the Employee for “Good Reason” shall mean a termination by the Employee of her employment hereunder following the initial occurrence, without her prior written consent, of any of the following events, unless the Company or its successor fully cures all grounds for such termination within thirty (30) days after receipt of the Employee’s written notice (it being understood that a termination of employment hereunder shall only be for Good Reason if the Employee terminates her employment not later than thirty (30) days after the Company so fails to cure such grounds):

(a)any material adverse change in the Employee's authority, duties, titles or offices (including reporting responsibility), from those existing immediately prior to the Change in Control;

(b)a diminution of the Employee’s Base Salary or annual bonus opportunity as provided for in Section 3; or

(c)the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company upon a merger, consolidation, sale or similar transaction.

9. Severance and Benefit Continuation.

(a)Termination for Cause or Voluntary Termination. In the event of a termination of the Employee’s employment by the Company for Cause pursuant to Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no severance or other termination pay or benefits shall be due to the Employee and the only obligation of the Company shall be to pay the Employee any accrued but unpaid Base Salary as of the date of termination and any accrued but unpaid vacation as of the date of termination (the “Accrued Obligations”), which amounts shall be paid to the Employee within thirty (30) days of the date of termination. In the event of a termination of the Employee’s employment pursuant to Section 7(a), the Company may elect to waive the period of notice required by Section 7(a), or any portion thereof, and, if the Company so elects, the Company will pay the Employee her Base Salary for the period so waived. Upon a termination covered by this Section 9(a), the Employee shall have the same opportunity to continue group health benefits at the Employee’s expense in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available generally to other employees terminating employment with the Company. Any outstanding equity awards previously granted to the Employee under the Equity Plan shall be treated in accordance with the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. A termination of the Employee’s employment that occurs by reason of the Employee’s notice to the Company of non-renewal of the Term under Section 2 hereof will be treated as a termination by the Employee under Section 7(a).

(b)Termination for Death or Disability. In the event of termination of the Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the death or disability of the Employee, the Company shall pay the Employee (or her estate in the event of a termination due to death), a pro-rata annual bonus for the year in which such termination of employment occurs,

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calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365 and shall provide the Health Continuation Benefits (as defined in Section 9(c)(ii)). In the event of a termination of the Employee’s employment due to death, the Company shall also pay to the Employee’s estate an amount equal to three (3) months of Base Salary. The Base Salary (if applicable) and the pro-rata bonus shall be paid within thirty (30) days of the date of termination. All Time-Vesting Equity Awards previously granted to the Employee shall become immediately vested and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such awards were granted. All other equity awards previously granted to the Employee will vest as determined in good faith by the Board of Directors based on the percentage of goals and objectives achieved by the Employee and the Company.

(c)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination, or Non-Renewal by the Company. If (1) the Company terminates the Employee’s employment pursuant to Section 6(d) hereof, (2) the Employee terminates her employment pursuant to Section 7(b) hereof or (3) at the end of the Term of this Agreement the Employee shall cease to be employed by the Company by reason of the Company’s decision not to renew the Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of employment does not occur within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee 1.5 times the sum of (A) the Employee’s Base Salary at the time of her termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and

(ii)if the Employee timely elects to continue her participation and that of her eligible dependents in the Company’s group medical, dental and vision plans under COBRA, the Company shall pay the Employee a lump-sum amount that, after all applicable taxes and withholdings are deducted, is the economic equivalent of the monthly health premiums paid by the Company on behalf of the Employee and her eligible dependents immediately prior to the date of her Separation from Service for a period of eighteen (18) months (the “Health Continuation Benefits”); provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(iii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

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(iv)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.

(d)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination or for Good Reason, or Non-Renewal by the Company, Upon a Change in Control. In the event that (1) the Company terminates this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this Agreement Following Constructive Termination under Section 7(b) hereof or for Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the Company, and in each case the termination of employment or Non-Renewal occurs within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee two (2) times the sum of (A) the Employee’s Base Salary at the time of her termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. The Company shall also pay the Employee a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and the Company shall provide the Employee with the Health Continuation Benefits; provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(ii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee under the Equity Plan shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

(iii)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. All other non-time vesting awards previously granted to the Employee, but not earned as of the date of termination of employment, will vest, if at all, as determined in good faith by

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the Board of Directors based upon the achievement of performance conditions by the Employee and the Company.

(e)The payments provided in Section 9(c) and 9(d) are intended as enhanced severance for a termination by the Company or by the Employee in the circumstances provided and are subject to the Employee’s continued compliance with the provisions of Section 5 hereof. As a condition to receiving such payments, the Employee shall first execute and deliver a general release of all claims against the Company, its Affiliates, agents and employees (other than any claims or rights pursuant to this Agreement or pursuant to equity or employee benefit plans), in a form and substance reasonably satisfactory to the Company (the “Release”). Any such payments and benefits shall be paid in a lump sum sixty (60) days after the Employee’s Separation from Service, subject to Section 9(g) below. The Employee must execute and return the Release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline will in no event be later than fifty (50) days after the Employee’s Separation from Service. If the Employee fails to return the Release on or before the Release Deadline, or if the Release is revoked by the Employee, then the Employee will not be entitled to the payments described in Section 9(c) and 9(d).

(f)Termination of Employment and Separation from Service. All references in the Agreement to termination of employment, a termination, retirement, cessation of employment, separation from service, and correlative terms, that result in the payment or vesting of any amounts or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be construed to require a Separation from Service, and the date of such termination in any such case shall be construed to mean the date of the Separation from Service.

(g)Payment to a “Specified Employee”. To the extent any payment hereunder that is payable by reason of termination of the Employee’s employment constitutes “nonqualified deferred compensation” subject to Section 409A and would otherwise have been required to be paid during the six (6)-month period following such termination of employment, it shall instead (unless at the relevant time the Employee is no longer a Specified Employee) be delayed and paid, without interest, in a lump sum on the date that is six (6) months and one (1) day after the Employee’s termination (or, if earlier, the date of the Employee’s death).

(h)In the event that the Employee’s employment with the Company terminates for any reason, except as otherwise expressly provided by the Company, the Employee’s employment with, or other service to, all Affiliates of the Company by which she is then employed or otherwise engaged in service shall automatically and immediately terminate.

10. Cooperation.

Following her termination of employment, the Employee agrees to cooperate with, and assist, the Company to ensure a smooth transition in management and, if requested by the Company, will make herself available to consult during regular business hours at mutually agreed upon times for up to a three month period thereafter. At any time following her termination of employment, the Employee will provide such information as the Company may

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reasonably request with respect to any Company-related transaction or other matter in which the Employee was involved in any way while employed by the Company. The Employee further agrees, during the Term of this Agreement and thereafter, to assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against, or by, the Company or its Affiliates, in connection with any dispute or claim of any kind involving the Company or its Affiliates, including providing testimony in any proceeding before any arbitral, administrative, judicial, legislative or other body or agency. Provided such expenses have been authorized by the Company, the Employee shall be entitled to reimbursement for all properly documented expenses incurred in connection with rendering services under this Section, including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses and legal fees, and, in addition, the Employee shall be entitled to a per diem amount for her services rendered under this Section equal to twice her then most recent annualized Base Salary under this Agreement, divided by 240.

11. Indemnification.

The Company shall indemnify the Employee to the fullest extent permitted by applicable law and its then-current articles of incorporation and by-laws. The Employee agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of her employment with the Company, or consultant pursuant to Section 10 above. The Company shall provide, at its expense, Directors and Officers insurance for the Employee in amounts reasonably satisfactory to the Employee, to the extent such insurance is available at reasonable rates, which determination shall be made by the Board of Directors. The Indemnification Agreement previously entered into between the Employee and the Company on February 28, 2013 remains in full force and effect.

12. Excise Tax.

If any payment or benefit that Employee would receive following a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (b) the largest portion, up to and including the total amount, of the Payment, whichever of the amounts determined under (a) and (b), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of outstanding awards under the Equity Plan; and reduction of employee benefits. In the event that acceleration of vesting of outstanding awards under the Equity Plan is to be reduced, such acceleration of vesting shall be undertaken in the reverse order of the date of grant of the Employee’s outstanding equity awards.

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The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control of the Company shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint another, nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Employee and the Company within a commercially reasonable period of time after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company). Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Employee and the Company.

13. No Mitigation.

The Employee shall not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor shall the amount of any payment provided for hereunder be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of employment by the Company (other than as described above in Section 9(c)(ii) and Section 9(d)(ii)).

14. Definitions.

As used herein, the following terms have the following meaning:

(a)“Affiliate” means and includes any person, corporation or other entity controlling, controlled by or under common control with the corporation in question.

(b)“Change in Control” means the occurrence of any of the following events:

(i)Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 40% of the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors (“Voting Securities”) of the Company, or

(ii)Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) as of the beginning of any twenty-four month period (not including any period prior to the date of this Agreement), cease for any reason to constitute at least a majority of the Directors. Notwithstanding the foregoing, any individual becoming a Director subsequent to the beginning of such period, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or

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(iii)Consummation by the Company of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the Beneficial Owners of the Voting Securities immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, 50% or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or

(iv)Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 50% of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.

For purposes of this definition 14(b), the following terms shall have the meanings set forth below:

(A)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;

(B)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and

(C)“Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Restricted Period” shall mean eighteen (18) months.

(e)“Separation from Service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The Board of Directors or the Compensation Committee of the Board of Directors may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Agreement.

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(f)“Specified Employee” shall mean an individual determined by the Board of Directors, Compensation Committee of the Board of Directors or their delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of the Agreement.

15. Representations by Employee.

The Employee represents and warrants that she has full right, power and authority to execute the terms of this Agreement; this Agreement has been duly executed by the Employee and such execution and the performance of this Agreement by the Employee does not result in any conflict, breach or violation of or default under any other agreement or any judgment, order or decree to which the Employee is a party or by which she is bound. The Employee acknowledges and agrees that any material breach of the representations set forth in this Section will constitute Cause under Section 6.

16. Arbitration.

Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of Employee’s employment and the termination of such employment, shall be settled by arbitration in Connecticut, in accordance with the employment dispute rules then existing of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Such claims shall include, without limitation, claims for breach of contract or breach of the covenant of good faith and fair dealing, any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA, and/or any applicable or equivalent state or local laws, claims for wrongful termination, including employment termination in violation of public policy, and claims for personal injury including, without limitation, defamation, fraud and infliction of emotional distress. The parties shall be free to pursue any remedy before the arbitrator that they shall be otherwise permitted to pursue in a court of competent jurisdiction. As a material part of this agreement to arbitrate claims, the Employee and company expressly waive all rights to a jury trial in court on all statutory or other claims. The award of the arbitrator shall be final and binding. The costs of the American Arbitration Association and the arbitrator will be borne equally by the Company and the Employee. Nothing contained herein, however, shall limit the right of the Company or any of its Affiliates to seek equitable or other relief from any court of competent jurisdiction for violation of any provision of Sections 4 and 5 above.

17. Recoupment.

The Employee hereby acknowledges and agrees that the annual bonus described in Section 3(b) and all other payments of incentive-based compensation payable to the Employee by the Company or its Affiliates (whether under this Agreement or otherwise) shall be subject

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to any applicable clawback or recoupment policy of the Company, as such policy may be amended and in effect from time to time, and shall be subject to recoupment as otherwise required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.

18. Notices.

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:

Alexion Pharmaceuticals, Inc.

100 College Street

New Haven, Connecticut 06510

Telephone: (203) 272-2596

Fax: (203) 271-8198

Attn: General Counsel

If to the Employee: to the Employee’s Address on file with the Company.

19. General.

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut applicable to agreements made and to be performed entirely in Connecticut by Connecticut residents.

(b)This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof except for the Proprietary Information and Inventions Agreement and the Indemnification Agreement. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

(c)This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance.

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The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or any one or more or continuing waivers of any such breach, shall constitute a waiver of the breach of any other term or covenant contained in this Agreement.

(d)This Agreement shall be binding upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto. The Company may not assign its rights and obligation under this Agreement without the prior written consent of the Employee, except to a successor of substantially all the Company’s business which expressly assumes the Company’s obligations hereunder in writing. In the event of a sale of all or substantially all of the assets of the Company, the Company shall use its best efforts to cause the purchaser to expressly assume this Agreement. The Employee may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except by will or operation of law, provided that the Employee may designate beneficiaries to receive any payments permitted under the terms of the Company’s benefit plans.

(e)If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)Provisions of this Agreement shall survive any termination of employment if so provided herein or if necessary or desirable fully to accomplish the purposes of other surviving provisions, including without limitation, the obligations of the Employee under Section 5 hereof. Upon termination of the Employee’s employment hereunder by either the Employee or the Company as permitted hereby, all rights, duties and obligations of the Employee and the Company to each other pursuant to this Agreement shall cease, except for the provisions hereof that contemplate performance after termination, including without limitation the obligations of the Employee under Section 5 hereof.

(g)This Agreement is intended to comply with the applicable requirements of Section 409A and shall be construed accordingly. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ALEXION PHARMACEUTICALS, INC.

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By:        /s/ David Hallal        

Name: David Hallal

Title: Chief Executive Officer

EMPLOYEE

/s/ Clare Carmichael        

Clare A. Carmichael

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EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of February 26, 2016 by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Martin Mackay (the “Employee”).

WITNESSETH

WHEREAS, the Company agrees to employ the Employee, subject to the terms and conditions contained in this Agreement; and

WHEREAS, the Employee agrees to accept employment with the Company, subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. Employment Duties and Acceptance.

(a)The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company as Executive Vice President, Research and Development, or such other position determined by the Company, and to perform such duties commensurate with such office or other office as the Employee shall reasonably be directed by the Company to perform. The Employee hereby accepts such employment and agrees to render the services described above. The Employee shall report to the Chief Executive Officer of the Company.

(b)During the Term, the Employee shall devote his full business time and his best efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder. Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full time employee, it is understood that the Employee, with consent of the Chief Executive Officer,may (1) have non full-time academic appointments; (2) participate in professional activities; (3) publish academic articles; and (4) participate in community and/or philanthropic activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.

2. Term of Employment.

The term of the Employee’s employment under this Agreement shall commence as of February 26, 2016 (the “Effective Date”) and shall end on the third anniversary thereof, unless

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sooner terminated pursuant to Section 6, 7 or 8 of this Agreement. Notwithstanding the foregoing, unless notice is given by the Employee or the Company at least sixty (60) days prior to the expiration of the Term of this Agreement (or at least sixty (60) days prior to the expiration of any extension hereof), the Term of the Agreement shall be automatically extended by one (1) year from the date it would otherwise end (whether upon expiration of the original Term or any extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8 hereof. The term of this Agreementas from time to time extended or renewed is hereafter referred to as “the Term of this Agreement” or “the Term”.

3. Compensation and Benefits.

(a)As compensation for services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, an annual base salary of $693,000 as adjusted from time to time, which base salary as so adjusted, shall be not less than the Employee’s base salary in effect immediately prior to the Effective Date (the “Base Salary”), payable in accordance with its regular payroll practices. The Employee’s Base Salary hereunder shall be reviewed at least annually thereafter during the Term of the Agreement for increase at the discretion of the Company.

(b)The Company agrees that the Employee shall be eligible for an annual performance bonus from the Company with respect to each fiscal year of the Company that ends during the Term, pursuant to the Company’s management incentive bonus program in effect from time to time (such plan, as so in effect, the “Bonus Plan”). The Employee’s target bonus under the Bonus Plan will be 70% of the Base Salary. The actual amount of any such bonus payable to the Employee under the Bonus Plan shall be determined by the Board of Directors of the Company (the “Board”) or the Compensation Committee thereof (the “Committee”) and paid by the Company in accordance with the terms of the Bonus Plan, subject to the Employee’s remaining employed on the date that bonuses are paid under the Bonus Plan, except as otherwise expressly provided herein.

(c)The Employee shall be eligible to receive stock-based awards under the equity incentive plan or program maintained by the Company as in effect from time to time (such plan, as so in effect, the “Equity Plan”) in the discretion of the Board or the Committee. Any such stock-based award will be subject to the terms of the Equity Plan, the terms of the award agreement evidencing such stock-based award, and such other restrictions and limitations as are generally applicable to shares of the Company’s common stock or Company employees or otherwise imposed by law.

(d)The Company shall pay or reimburse the Employee for all reasonable, customary and necessary business expenses actually incurred or paid by the Employee during the Term in the performance of services under this Agreement, subject to travel and other policies and such reasonable substantiation and documentation as may be required by the Company from time to time, provided that (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year, (ii) reimbursement is made not later than December

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31 of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement is not subject to liquidation or exchange for any other benefit.

(e)During the Term, the Employee shall be eligible to participate in all employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided under this Agreement (e.g., a severance pay plan). Participation in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law.

(f)During the Term, the Employee shall be eligible for paid vacation of four weeks and twopersonal days per calendar year taken in accordance with applicable Company policy.

4. Confidentiality.

The Employee acknowledges and agrees that he remains bound by the terms and conditions of the Proprietary Information and Inventions Agreement previously entered into with the Company. Notwithstanding any other provision of this Agreement, the Employee shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement which shall survive the termination of this Agreement in accordance with its terms.

5. Non-Competition, Non-Solicitation and Non-Disparagement.

(a)During the Term, the Employee shall not (1) provide any services, directly or indirectly, to any other business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion, or (2) participate in the formation of any business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained in this Section 5(a) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit the Employee’s Permitted Activities pursuant to Section 1(b).

(b)Upon a termination of the Employee’s employment by the Company for any reason other than pursuant to Section 6(a) or Section 6(b), or upon a termination of the Employee’s employment by the Employee for any reason, following such termination of employment and during the Restricted Period, the Employee shall not,directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer, or otherwise, compete with the Company or any of its Affiliates, or undertake any planning for any business competitive with the Company or any of its Affiliates. Specifically, but without limiting the foregoing, during the Restricted Period the Employee will not: (1) provide any services directly or indirectly, whether as an employee or independent contractor or otherwise, whether

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with or without compensation, to any other business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates; (2) participate in the formation of any business or commercial entity in the United States that is competitive with all or any portion of the business of the Company or its Affiliates, (3) directly or indirectly seek to employ, any person employed by the Company or any of its Affiliates anywhere in the world, or otherwise encourage or entice any such person to leave such employment; (4) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates anywhere in the world to terminate or diminish its relationship with the Company or its Affiliates; or (5) solicit or encourage any customer, consultant, or vendor of the Company or its Affiliates anywhere in the world, to terminate or diminish its relationship with the Company or its Affiliates; provided, however, that nothing contained in this Section 5(b) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit Employee’s Permitted Activities pursuant to Section 1(b). This Section 5(b) shall be subject to written waivers that may be obtained by the Employee from the Company.

(c)At no time during the Term of this Agreement or thereafter, regardless of the reason for termination, will Employee knowingly make any written or verbal untrue statement that disparages the Company, its Affiliates, its business, its management, or its products in communications with any customer, client or the public. The employee will, furthermore, not otherwise do or say anything that could disrupt the good morale of employees of the Company or any of its Affiliates, or that harms the interests or reputation of the Company or any of its Affiliates.

(d)Nothing in this Agreement or the Proprietary Information and Inventions Agreement limits, restricts, or in any other way affects the Employee’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.

(e)The Employee acknowledges that he has read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 5(a)-(c) above. The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and are reasonable in respect to subject matter, length of time, and geographic area. If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 5, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company. The Employee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Employee of any of the provisions of this Section 5, without having

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to post bond. So that the Company may enjoy the full benefit of the covenants contained above, the Employee agrees that the Restricted Period shall be tolled, and shall not run, during the period of any breach by the Employee of such covenants.

(f)If any of the covenants contained in this Section 5, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

(g)If any of the covenants contained in this Section 5, or any part thereof, is held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and that the parties intend for the court to modify the duration and/or area of such provision to the maximum extent permitted by law. The parties agree that in its reduced form, such provision shall then be enforceable.

(h)In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

6. Termination by the Company.

The Company may terminate the employment of the Employee as follows during the Term of this Agreement if any one or more of the following shall occur:

(a)Death. If the Employee shall die during the Term, the Employee’s employment hereunder shall automatically terminate.

(b)Disability. If the Employee shall become physically or mentally disabled so that the Employee is unable substantially to perform his services hereunder for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating to 180 days during any twelve-month period, the Company may terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.

(c)For Cause. If the Employee acts, or fails to act, in a manner that provides Cause for termination, the Company may at any time terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee. For purposes of this Agreement, the term “Cause” means (1) the Employee’s indictment for, or conviction of, a felony or other crime involving moral turpitude, or any crime or serious offense involving money or other property which constitutes a felony in the jurisdiction involved, (2) the Employee’s willful and continual neglect or failure to discharge duties (including fiduciary duties), responsibilities and obligations with respect to the Company hereunder; provided such neglect or failure, if susceptible of cure, remains uncured for a period of thirty (30) days after

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written notice describing the same is given to the Employee; provided further that isolated and insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Employee’s material breach of this Agreement or any other material agreement with the Company, (4) the Employee’s violation of Section 5 hereof or the Employee’s breach of any confidentiality provisions contained in the Proprietary Information and Inventions Agreement, or (5) any act of fraud or embezzlement by the Employee involving the Company or any of its Affiliates.

(d)Without Cause. The Company may at any time terminate the Employee’s employment hereunder without Cause upon written notice given by the Company to the Employee.

7. Termination by the Employee.

(a)Other than for Constructive Termination. The Employee may terminate his employment hereunder at any time, for any reason and for no reason, upon not less than sixty (60) days’ prior written notice to the Company.

(b)Constructive Termination. The Employee may terminate his employment hereunder upon written notice to the Company if any one or more of the following shall occur, each of which is deemed a Constructive Termination:

(i)a material breach of the terms of this Agreement by the Company and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company;

(ii)a relocation of the Employee’s place of employment to a location beyond a 30-mile radius of New Haven, Connecticut; or

(iii)a material breach by the Company of any other material agreement with the Employee and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company

Notwithstanding the foregoing, the Employee shall not be deemed to have a “Constructive Termination” unless the Employee gives the Company written notice of such a condition within ninety (90) days after such condition first comes into existence, the Company fails to remedy such condition within thirty (30) days after receiving the Employee’s written notice and the Employee terminates this Agreement not later than thirty (30) days after the Company so fails to remedy such condition.

8. Termination by Employee for Good Reason Following a Change in Control.

In addition to Section 7(b)(i) through (iii) above, during the period commencing on the Change in Control (as defined in Section 14) and ending on the eighteen (18) month anniversary of such Change in Control, the Employee may terminate this Agreement upon expiration of ninety (90) days’ prior written notice if “Good Reason” exists for the

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Employee’s termination. For this purpose, termination by the Employee for “Good Reason” shall mean a termination by the Employee of his employment hereunder following the initial occurrence, without his prior written consent, of any of the following events, unless the Company or its successor fully cures all grounds for such termination within thirty (30) days after receipt of the Employee’s written notice (it being understood that a termination of employment hereunder shall only be for Good Reason if the Employee terminates his employment not later than thirty (30) days after the Company so fails to cure such grounds):

(a)any material adverse change in the Employee's authority, duties, titles or offices (including reporting responsibility), from those existing immediately prior to the Change in Control;

(b)a diminution of the Employee’s Base Salary or annual bonus opportunity as provided for in Section 3; or

(c)the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company upon a merger, consolidation, sale or similar transaction.

9. Severance and Benefit Continuation.

(a)Termination for Cause or Voluntary Termination. In the event of a termination of the Employee’s employment by the Company for Cause pursuant to Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no severance or other termination pay or benefits shall be due to the Employee and the only obligation of the Company shall be to pay the Employee any accrued but unpaid Base Salary as of the date of termination and any accrued but unpaid vacation as of the date of termination (the “Accrued Obligations”), which amounts shall be paid to the Employee within thirty (30) days of the date of termination. In the event of a termination of the Employee’s employment pursuant to Section 7(a), the Company may elect to waive the period of notice required by Section 7(a), or any portion thereof, and, if the Company so elects, the Company will pay the Employee his Base Salary for the period so waived. Upon a termination covered by this Section 9(a), the Employee shall have the same opportunity to continue group health benefits at the Employee’s expense in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available generally to other employees terminating employment with the Company. Any outstanding equity awards previously granted to the Employee under the Equity Plan shall be treated in accordance with the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. A termination of the Employee’s employment that occurs by reason of the Employee’s notice to the Company of non-renewal of the Term under Section 2 hereof will be treated as a termination by the Employee under Section 7(a).

(b)Termination for Death or Disability. In the event of termination of the Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the death or disability of the Employee, the Company shall pay the Employee (or his estate in the event of a termination due to death), a pro-rata annual bonus for the year in which such termination of employment occurs,

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calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365 and shall provide the Health Continuation Benefits (as defined in Section 9(c)(ii)). In the event of a termination of the Employee’s employment due to death, the Company shall also pay to the Employee’s estate an amount equal to three (3) months of Base Salary. The Base Salary (if applicable) and the pro-rata bonus shall be paid within thirty (30) days of the date of termination. All Time-Vesting Equity Awards previously granted to the Employee shall become immediately vested and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such awards were granted. All other equity awards previously granted to the Employee will vest as determined in good faith by the Board of Directors based on the percentage of goals and objectives achieved by the Employee and the Company.

(c)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination, or Non-Renewal by the Company. If (1) the Company terminates the Employee’s employment pursuant to Section 6(d) hereof, (2) the Employee terminates his employment pursuant to Section 7(b) hereof or (3) at the end of the Term of this Agreement the Employee shall cease to be employed by the Company by reason of the Company’s decision not to renew the Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of employment does not occur within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee 1.5 times the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and

(ii)if the Employee timely elects to continue his participation and that of his eligible dependents in the Company’s group medical, dental and vision plans under COBRA, the Company shall pay the Employee a lump-sum amount that, after all applicable taxes and withholdings are deducted, is the economic equivalent of the monthly health premiums paid by the Company on behalf of the Employee and his eligible dependents immediately prior to the date of his Separation from Service for a period of eighteen (18) months (the “Health Continuation Benefits”); provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(iii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

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(iv)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.

(d)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination or for Good Reason, or Non-Renewal by the Company, Upon a Change in Control. In the event that (1) the Company terminates this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this Agreement Following Constructive Termination under Section 7(b) hereof or for Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the Company, and in each case the termination of employment or Non-Renewal occurs within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee two (2) times the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. The Company shall also pay the Employee a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and the Company shall provide the Employee with the Health Continuation Benefits; provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(ii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee under the Equity Plan shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

(iii)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. All other non-time vesting awards previously granted to the Employee, but not earned as of the date of termination of employment, will vest, if at all, as determined in good faith by

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the Board of Directors based upon the achievement of performance conditions by the Employee and the Company.

(e)The payments provided in Section 9(c) and 9(d) are intended as enhanced severance for a termination by the Company or by the Employee in the circumstances provided and are subject to the Employee’s continued compliance with the provisions of Section 5 hereof. As a condition to receiving such payments, the Employee shall first execute and deliver a general release of all claims against the Company, its Affiliates, agents and employees (other than any claims or rights pursuant to this Agreement or pursuant to equity or employee benefit plans), in a form and substance reasonably satisfactory to the Company (the “Release”). Any such payments and benefits shall be paid in a lump sum sixty (60) days after the Employee’s Separation from Service, subject to Section 9(g) below. The Employee must execute and return the Release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline will in no event be later than fifty (50) days after the Employee’s Separation from Service. If the Employee fails to return the Release on or before the Release Deadline, or if the Release is revoked by the Employee, then the Employee will not be entitled to the payments described in Section 9(c) and 9(d).

(f)Termination of Employment and Separation from Service. All references in the Agreement to termination of employment, a termination, retirement, cessation of employment, separation from service, and correlative terms, that result in the payment or vesting of any amounts or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be construed to require a Separation from Service, and the date of such termination in any such case shall be construed to mean the date of the Separation from Service.

(g)Payment to a “Specified Employee”. To the extent any payment hereunder that is payable by reason of termination of the Employee’s employment constitutes “nonqualified deferred compensation” subject to Section 409A and would otherwise have been required to be paid during the six (6)-month period following such termination of employment, it shall instead (unless at the relevant time the Employee is no longer a Specified Employee) be delayed and paid, without interest, in a lump sum on the date that is six (6) months and one (1) day after the Employee’s termination (or, if earlier, the date of the Employee’s death).

(h)In the event that the Employee’s employment with the Company terminates for any reason, except as otherwise expressly provided by the Company, the Employee’s employment with, or other service to, all Affiliates of the Company by which he is then employed or otherwise engaged in service shall automatically and immediately terminate.

10. Cooperation.

Following his termination of employment, the Employee agrees to cooperate with, and assist, the Company to ensure a smooth transition in management and, if requested by the Company, will make himself available to consult during regular business hours at mutually agreed upon times for up to a three month period thereafter. At any time following his termination of employment, the Employee will provide such information as the Company may

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reasonably request with respect to any Company-related transaction or other matter in which the Employee was involved in any way while employed by the Company. The Employee further agrees, during the Term of this Agreement and thereafter, to assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against, or by, the Company or its Affiliates, in connection with any dispute or claim of any kind involving the Company or its Affiliates, including providing testimony in any proceeding before any arbitral, administrative, judicial, legislative or other body or agency. Provided such expenses have been authorized by the Company, the Employee shall be entitled to reimbursement for all properly documented expenses incurred in connection with rendering services under this Section, including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses and legal fees, and, in addition, the Employee shall be entitled to a per diem amount for his services rendered under this Section equal to twice his then most recent annualized Base Salary under this Agreement, divided by 240.

11. Indemnification.

The Company shall indemnify the Employee to the fullest extent permitted by applicable law and its then-current articles of incorporation and by-laws. The Employee agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his employment with the Company, or consultant pursuant to Section 10 above. The Company shall provide, at its expense, Directors and Officers insurance for the Employee in amounts reasonably satisfactory to the Employee, to the extent such insurance is available at reasonable rates, which determination shall be made by the Board of Directors. The Indemnification Agreement previously entered into between the Employee and the Company on May 21, 2013 remains in full force and effect.

12. Excise Tax.

If any payment or benefit that Employee would receive following a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (b) the largest portion, up to and including the total amount, of the Payment, whichever of the amounts determined under (a) and (b), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of outstanding awards under the Equity Plan; and reduction of employee benefits. In the event that acceleration of vesting of outstanding awards under the Equity Plan is to be reduced, such acceleration of vesting shall be undertaken in the reverse order of the date of grant of the Employee’s outstanding equity awards.

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The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control of the Company shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint another, nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Employee and the Company within a commercially reasonable period of time after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company). Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Employee and the Company.

13. No Mitigation.

The Employee shall not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor shall the amount of any payment provided for hereunder be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of employment by the Company (other than as described above in Section 9(c)(ii) and Section 9(d)(ii)).

14. Definitions.

As used herein, the following terms have the following meaning:

(a)“Affiliate” means and includes any person, corporation or other entity controlling, controlled by or under common control with the corporation in question.

(b)“Change in Control” means the occurrence of any of the following events:

(i)Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 40% of the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors (“Voting Securities”) of the Company, or

(ii)Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) as of the beginning of any twenty-four month period (not including any period prior to the date of this Agreement), cease for any reason to constitute at least a majority of the Directors. Notwithstanding the foregoing, any individual becoming a Director subsequent to the beginning of such period, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or

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(iii)Consummation by the Company of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the Beneficial Owners of the Voting Securities immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, 50% or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or

(iv)Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 50% of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.

For purposes of this definition 14(b), the following terms shall have the meanings set forth below:

(A)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;

(B)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and

(C)“Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Restricted Period” shall mean eighteen (18) months.

(e)“Separation from Service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The Board of Directors or the Compensation Committee of the Board of Directors may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Agreement.

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(f)“Specified Employee” shall mean an individual determined by the Board of Directors, Compensation Committee of the Board of Directors or their delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of the Agreement.

15. Representations by Employee.

The Employee represents and warrants that he has full right, power and authority to execute the terms of this Agreement; this Agreement has been duly executed by the Employee and such execution and the performance of this Agreement by the Employee does not result in any conflict, breach or violation of or default under any other agreement or any judgment, order or decree to which the Employee is a party or by which he is bound. The Employee acknowledges and agrees that any material breach of the representations set forth in this Section will constitute Cause under Section 6.

16. Arbitration.

Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of Employee’s employment and the termination of such employment, shall be settled by arbitration in Connecticut, in accordance with the employment dispute rules then existing of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Such claims shall include, without limitation, claims for breach of contract or breach of the covenant of good faith and fair dealing, any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA, and/or any applicable or equivalent state or local laws, claims for wrongful termination, including employment termination in violation of public policy, and claims for personal injury including, without limitation, defamation, fraud and infliction of emotional distress. The parties shall be free to pursue any remedy before the arbitrator that they shall be otherwise permitted to pursue in a court of competent jurisdiction. As a material part of this agreement to arbitrate claims, the Employee and company expressly waive all rights to a jury trial in court on all statutory or other claims. The award of the arbitrator shall be final and binding. The costs of the American Arbitration Association and the arbitrator will be borne equally by the Company and the Employee. Nothing contained herein, however, shall limit the right of the Company or any of its Affiliates to seek equitable or other relief from any court of competent jurisdiction for violation of any provision of Sections 4 and 5 above.

17. Recoupment.

The Employee hereby acknowledges and agrees that the annual bonus described in Section 3(b) and all other payments of incentive-based compensation payable to the Employee by the Company or its Affiliates (whether under this Agreement or otherwise) shall be subject

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to any applicable clawback or recoupment policy of the Company, as such policy may be amended and in effect from time to time, and shall be subject to recoupment as otherwise required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.

18. Notices.

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:

Alexion Pharmaceuticals, Inc.

100 College Street

New Haven, Connecticut 06510

Telephone: (203) 272-2596

Fax: (203) 271-8198

Attn: General Counsel

If to the Employee: to the Employee’s Address on file with the Company.

19. General.

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut applicable to agreements made and to be performed entirely in Connecticut by Connecticut residents.

(b)This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof, except for the Proprietary Information and Inventions Agreement and the Indemnification Agreement. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

(c)This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance.

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The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or any one or more or continuing waivers of any such breach, shall constitute a waiver of the breach of any other term or covenant contained in this Agreement.

(d)This Agreement shall be binding upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto. The Company may not assign its rights and obligation under this Agreement without the prior written consent of the Employee, except to a successor of substantially all the Company’s business which expressly assumes the Company’s obligations hereunder in writing. In the event of a sale of all or substantially all of the assets of the Company, the Company shall use its best efforts to cause the purchaser to expressly assume this Agreement. The Employee may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except by will or operation of law, provided that the Employee may designate beneficiaries to receive any payments permitted under the terms of the Company’s benefit plans.

(e)If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)Provisions of this Agreement shall survive any termination of employment if so provided herein or if necessary or desirable fully to accomplish the purposes of other surviving provisions, including without limitation, the obligations of the Employee under Section 5 hereof. Upon termination of the Employee’s employment hereunder by either the Employee or the Company as permitted hereby, all rights, duties and obligations of the Employee and the Company to each other pursuant to this Agreement shall cease, except for the provisions hereof that contemplate performance after termination, including without limitation the obligations of the Employee under Section 5 hereof.

(g)This Agreement is intended to comply with the applicable requirements of Section 409A and shall be construed accordingly. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ALEXION PHARMACEUTICALS, INC.

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By:        /s/ Clare Carmichael        

Name: Clare A. Carmichael

Title: EVP & Chief Human Resources Officer

EMPLOYEE

/s/ Martin Mackay        

Martin Mackay

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of February 26, 2016 by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and John B. Moriarty, Jr. (the “Employee”).

WITNESSETH

WHEREAS, the Company agrees to employ the Employee, subject to the terms and conditions contained in this Agreement; and

WHEREAS, the Employee agrees to accept employment with the Company, subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. Employment Duties and Acceptance.

(a)The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company as Executive Vice President and General Counsel, or such other position determined by the Company, and to perform such duties commensurate with such office or other office as the Employee shall reasonably be directed by the Company to perform. The Employee hereby accepts such employment and agrees to render the services described above. The Employee shall report to the Chief Executive Officer of the Company.

(b)During the Term, the Employee shall devote his full business time and his best efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder. Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full time employee, it is understood that the Employee, with consent of the Chief Executive Officer,may (1) have non full-time academic appointments; (2) participate in professional activities; (3) publish academic articles; and (4) participate in community and/or philanthropic activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.

2. Term of Employment.

The term of the Employee’s employment under this Agreement shall commence as of February 26, 2016 (the “Effective Date”) and shall end on the third anniversary thereof, unless

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sooner terminated pursuant to Section 6, 7 or 8 of this Agreement. Notwithstanding the foregoing, unless notice is given by the Employee or the Company at least sixty (60) days prior to the expiration of the Term of this Agreement (or at least sixty (60) days prior to the expiration of any extension hereof), the Term of the Agreement shall be automatically extended by one (1) year from the date it would otherwise end (whether upon expiration of the original Term or any extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8 hereof. The term of this Agreementas from time to time extended or renewed is hereafter referred to as “the Term of this Agreement” or “the Term”.

3. Compensation and Benefits.

(a)As compensation for services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, an annual base salary of $604,000 as adjusted from time to time, which base salary as so adjusted, shall be not less than the Employee’s base salary in effect immediately prior to the Effective Date (the “Base Salary”), payable in accordance with its regular payroll practices. The Employee’s Base Salary hereunder shall be reviewed at least annually thereafter during the Term of the Agreement for increase at the discretion of the Company.

(b)The Company agrees that the Employee shall be eligible for an annual performance bonus from the Company with respect to each fiscal year of the Company that ends during the Term, pursuant to the Company’s management incentive bonus program in effect from time to time (such plan, as so in effect, the “Bonus Plan”). The Employee’s target bonus under the Bonus Plan will be 70% of the Base Salary. The actual amount of any such bonus payable to the Employee under the Bonus Plan shall be determined by the Board of Directors of the Company (the “Board”) or the Compensation Committee thereof (the “Committee”) and paid by the Company in accordance with the terms of the Bonus Plan, subject to the Employee’s remaining employed on the date that bonuses are paid under the Bonus Plan, except as otherwise expressly provided herein.

(c)The Employee shall be eligible to receive stock-based awards under the equity incentive plan or program maintained by the Company as in effect from time to time (such plan, as so in effect, the “Equity Plan”) in the discretion of the Board or the Committee. Any such stock-based award will be subject to the terms of the Equity Plan, the terms of the award agreement evidencing such stock-based award, and such other restrictions and limitations as are generally applicable to shares of the Company’s common stock or Company employees or otherwise imposed by law.

(d)The Company shall pay or reimburse the Employee for all reasonable, customary and necessary business expenses actually incurred or paid by the Employee during the Term in the performance of services under this Agreement, subject to travel and other policies and such reasonable substantiation and documentation as may be required by the Company from time to time, provided that (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year, (ii) reimbursement is made not later than December

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31 of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement is not subject to liquidation or exchange for any other benefit.

(e)During the Term, the Employee shall be eligible to participate in all employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided under this Agreement (e.g., a severance pay plan). Participation in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law.

(f)During the Term, the Employee shall be eligible for paid vacation of four weeks and twopersonal days per calendar year taken in accordance with applicable Company policy.

4. Confidentiality.

The Employee acknowledges and agrees that he remains bound by the terms and conditions of the Proprietary Information and Inventions Agreement previously entered into with the Company. Notwithstanding any other provision of this Agreement, the Employee shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement which shall survive the termination of this Agreement in accordance with its terms.

5. Non-Solicitation and Non-Disparagement.

(a)During the Term, the Employee shall not (1) provide any services, directly or indirectly, to any other business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion, or (2) participate in the formation of any business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained in this Section 5(a) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit the Employee’s Permitted Activities pursuant to Section 1(b).

(b)Upon a termination of the Employee’s employment by the Company for any reason other than pursuant to Section 6(a) or Section 6(b), or upon a termination of the Employee’s employment by the Employee for any reason, following such termination of employment and during the Restricted Period, the Employee shall not: (1) directly or indirectly seek to employ, any person employed by the Company or any of its Affiliates anywhere in the world, or otherwise encourage or entice any such person to leave such employment; (2) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates anywhere in the world to terminate or diminish its relationship with the Company or its Affiliates; or (3) solicit or encourage any customer,

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consultant, or vendor of the Company or its Affiliates anywhere in the world, to terminate or diminish its relationship with the Company or its Affiliates; provided, however, that nothing contained in this Section 5(b) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit Employee’s Permitted Activities pursuant to Section 1(b). This Section 5(b) shall be subject to written waivers that may be obtained by the Employee from the Company.

(c)At no time during the Term of this Agreement or thereafter, regardless of the reason for termination, will Employee knowingly make any written or verbal untrue statement that disparages the Company, its Affiliates, its business, its management, or its products in communications with any customer, client or the public. The employee will, furthermore, not otherwise do or say anything that could disrupt the good morale of employees of the Company or any of its Affiliates, or that harms the interests or reputation of the Company or any of its Affiliates.

(d)Nothing in this Agreement or the Proprietary Information and Inventions Agreement limits, restricts, or in any other way affects the Employee’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.

(e)The Employee acknowledges that he has read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 5(a)-(c) above. The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and are reasonable in respect to subject matter, length of time, and geographic area. If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 5, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company. The Employee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Employee of any of the provisions of this Section 5, without having to post bond. So that the Company may enjoy the full benefit of the covenants contained above, the Employee agrees that the Restricted Period shall be tolled, and shall not run, during the period of any breach by the Employee of such covenants.

(f)If any of the covenants contained in this Section 5, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

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(g)If any of the covenants contained in this Section 5, or any part thereof, is held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and that the parties intend for the court to modify the duration and/or area of such provision to the maximum extent permitted by law. The parties agree that in its reduced form, such provision shall then be enforceable.

(h)In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

6. Termination by the Company.

The Company may terminate the employment of the Employee as follows during the Term of this Agreement if any one or more of the following shall occur:

(a)Death. If the Employee shall die during the Term, the Employee’s employment hereunder shall automatically terminate.

(b)Disability. If the Employee shall become physically or mentally disabled so that the Employee is unable substantially to perform his services hereunder for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating to 180 days during any twelve-month period, the Company may terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.

(c)For Cause. If the Employee acts, or fails to act, in a manner that provides Cause for termination, the Company may at any time terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee. For purposes of this Agreement, the term “Cause” means (1) the Employee’s indictment for, or conviction of, a felony or other crime involving moral turpitude, or any crime or serious offense involving money or other property which constitutes a felony in the jurisdiction involved, (2) the Employee’s willful and continual neglect or failure to discharge duties (including fiduciary duties), responsibilities and obligations with respect to the Company hereunder; provided such neglect or failure, if susceptible of cure, remains uncured for a period of thirty (30) days after written notice describing the same is given to the Employee; provided further that isolated and insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Employee’s material breach of this Agreement or any other material agreement with the Company, (4) the Employee’s violation of Section 5 hereof or the Employee’s breach of any confidentiality provisions contained in the Proprietary Information and Inventions Agreement, or (5) any act of fraud or embezzlement by the Employee involving the Company or any of its Affiliates.

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(d)Without Cause. The Company may at any time terminate the Employee’s employment hereunder without Cause upon written notice given by the Company to the Employee.

7. Termination by the Employee.

(a)Other than for Constructive Termination. The Employee may terminate his employment hereunder at any time, for any reason and for no reason, upon not less than sixty (60) days’ prior written notice to the Company.

(b)Constructive Termination. The Employee may terminate his employment hereunder upon written notice to the Company if any one or more of the following shall occur, each of which is deemed a Constructive Termination:

(i)a material breach of the terms of this Agreement by the Company and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company;

(ii)a relocation of the Employee’s place of employment to a location beyond a 30-mile radius of New Haven, Connecticut; or

(iii)a material breach by the Company of any other material agreement with the Employee and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company

Notwithstanding the foregoing, the Employee shall not be deemed to have a “Constructive Termination” unless the Employee gives the Company written notice of such a condition within ninety (90) days after such condition first comes into existence, the Company fails to remedy such condition within thirty (30) days after receiving the Employee’s written notice and the Employee terminates this Agreement not later than thirty (30) days after the Company so fails to remedy such condition.

8. Termination by Employee for Good Reason Following a Change in Control.

In addition to Section 7(b)(i) through (iii) above, during the period commencing on the Change in Control (as defined in Section 14) and ending on the eighteen (18) month anniversary of such Change in Control, the Employee may terminate this Agreement upon expiration of ninety (90) days’ prior written notice if “Good Reason” exists for the Employee’s termination. For this purpose, termination by the Employee for “Good Reason” shall mean a termination by the Employee of his employment hereunder following the initial occurrence, without his prior written consent, of any of the following events, unless the Company or its successor fully cures all grounds for such termination within thirty (30) days after receipt of the Employee’s written notice (it being understood that a termination of employment hereunder shall only be for Good Reason if the Employee terminates his employment not later than thirty (30) days after the Company so fails to cure such grounds):

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(a)any material adverse change in the Employee's authority, duties, titles or offices (including reporting responsibility), from those existing immediately prior to the Change in Control;

(b)a diminution of the Employee’s Base Salary or annual bonus opportunity as provided for in Section 3; or

(c)the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company upon a merger, consolidation, sale or similar transaction.

9. Severance and Benefit Continuation.

(a)Termination for Cause or Voluntary Termination. In the event of a termination of the Employee’s employment by the Company for Cause pursuant to Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no severance or other termination pay or benefits shall be due to the Employee and the only obligation of the Company shall be to pay the Employee any accrued but unpaid Base Salary as of the date of termination and any accrued but unpaid vacation as of the date of termination (the “Accrued Obligations”), which amounts shall be paid to the Employee within thirty (30) days of the date of termination. In the event of a termination of the Employee’s employment pursuant to Section 7(a), the Company may elect to waive the period of notice required by Section 7(a), or any portion thereof, and, if the Company so elects, the Company will pay the Employee his Base Salary for the period so waived. Upon a termination covered by this Section 9(a), the Employee shall have the same opportunity to continue group health benefits at the Employee’s expense in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available generally to other employees terminating employment with the Company. Any outstanding equity awards previously granted to the Employee under the Equity Plan shall be treated in accordance with the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. A termination of the Employee’s employment that occurs by reason of the Employee’s notice to the Company of non-renewal of the Term under Section 2 hereof will be treated as a termination by the Employee under Section 7(a).

(b)Termination for Death or Disability. In the event of termination of the Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the death or disability of the Employee, the Company shall pay the Employee (or his estate in the event of a termination due to death), a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365 and shall provide the Health Continuation Benefits (as defined in Section 9(c)(ii)). In the event of a termination of the Employee’s employment due to death, the Company shall also pay to the Employee’s estate an amount equal to three (3) months of Base Salary. The Base Salary (if applicable) and the pro-rata bonus shall be paid within thirty (30) days of the date of termination. All Time-Vesting Equity Awards previously granted to the Employee shall become immediately vested and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual

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award agreements under which such awards were granted. All other equity awards previously granted to the Employee will vest as determined in good faith by the Board of Directors based on the percentage of goals and objectives achieved by the Employee and the Company.

(c)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination, or Non-Renewal by the Company. If (1) the Company terminates the Employee’s employment pursuant to Section 6(d) hereof, (2) the Employee terminates his employment pursuant to Section 7(b) hereof or (3) at the end of the Term of this Agreement the Employee shall cease to be employed by the Company by reason of the Company’s decision not to renew the Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of employment does not occur within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee 1.5 times the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and

(ii)if the Employee timely elects to continue his participation and that of his eligible dependents in the Company’s group medical, dental and vision plans under COBRA, the Company shall pay the Employee a lump-sum amount that, after all applicable taxes and withholdings are deducted, is the economic equivalent of the monthly health premiums paid by the Company on behalf of the Employee and his eligible dependents immediately prior to the date of his Separation from Service for a period of eighteen (18) months (the “Health Continuation Benefits”); provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(iii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

(iv)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.

(d)Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination or for Good Reason, or Non-Renewal by the Company,

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Upon a Change in Control. In the event that (1) the Company terminates this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this Agreement Following Constructive Termination under Section 7(b) hereof or for Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the Company, and in each case the termination of employment or Non-Renewal occurs within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:

(i)the Company shall pay the Employee two (2) times the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs. The Company shall also pay the Employee a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365. Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and the Company shall provide the Employee with the Health Continuation Benefits; provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);

(ii)all equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee under the Equity Plan shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and

(iii)all equity awards, other than the Time-Vesting Equity Awards, previously earned by and granted to the Employee shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted. All other non-time vesting awards previously granted to the Employee, but not earned as of the date of termination of employment, will vest, if at all, as determined in good faith by the Board of Directors based upon the achievement of performance conditions by the Employee and the Company.

(e)The payments provided in Section 9(c) and 9(d) are intended as enhanced severance for a termination by the Company or by the Employee in the circumstances provided and are subject to the Employee’s continued compliance with the provisions of Section 5 hereof. As a condition to receiving such payments, the Employee shall first execute and deliver a general release of all claims against the Company, its Affiliates, agents and

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employees (other than any claims or rights pursuant to this Agreement or pursuant to equity or employee benefit plans), in a form and substance reasonably satisfactory to the Company (the “Release”). Any such payments and benefits shall be paid in a lump sum sixty (60) days after the Employee’s Separation from Service, subject to Section 9(g) below. The Employee must execute and return the Release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline will in no event be later than fifty (50) days after the Employee’s Separation from Service. If the Employee fails to return the Release on or before the Release Deadline, or if the Release is revoked by the Employee, then the Employee will not be entitled to the payments described in Section 9(c) and 9(d).

(f)Termination of Employment and Separation from Service. All references in the Agreement to termination of employment, a termination, retirement, cessation of employment, separation from service, and correlative terms, that result in the payment or vesting of any amounts or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be construed to require a Separation from Service, and the date of such termination in any such case shall be construed to mean the date of the Separation from Service.

(g)Payment to a “Specified Employee”. To the extent any payment hereunder that is payable by reason of termination of the Employee’s employment constitutes “nonqualified deferred compensation” subject to Section 409A and would otherwise have been required to be paid during the six (6)-month period following such termination of employment, it shall instead (unless at the relevant time the Employee is no longer a Specified Employee) be delayed and paid, without interest, in a lump sum on the date that is six (6) months and one (1) day after the Employee’s termination (or, if earlier, the date of the Employee’s death).

(h)In the event that the Employee’s employment with the Company terminates for any reason, except as otherwise expressly provided by the Company, the Employee’s employment with, or other service to, all Affiliates of the Company by which he is then employed or otherwise engaged in service shall automatically and immediately terminate.

10. Cooperation.

Following his termination of employment, the Employee agrees to cooperate with, and assist, the Company to ensure a smooth transition in management and, if requested by the Company, will make himself available to consult during regular business hours at mutually agreed upon times for up to a three month period thereafter. At any time following his termination of employment, the Employee will provide such information as the Company may reasonably request with respect to any Company-related transaction or other matter in which the Employee was involved in any way while employed by the Company. The Employee further agrees, during the Term of this Agreement and thereafter, to assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against, or by, the Company or its Affiliates, in connection with any dispute or claim of any kind involving the Company or its Affiliates, including providing testimony in any proceeding before any arbitral, administrative, judicial, legislative or other body or agency. Provided such expenses have been authorized by the Company, the Employee shall be entitled to

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reimbursement for all properly documented expenses incurred in connection with rendering services under this Section, including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses and legal fees, and, in addition, the Employee shall be entitled to a per diem amount for his services rendered under this Section equal to twice his then most recent annualized Base Salary under this Agreement, divided by 240.

11. Indemnification.

The Company shall indemnify the Employee to the fullest extent permitted by applicable law and its then-current articles of incorporation and by-laws. The Employee agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his employment with the Company, or consultant pursuant to Section 10 above. The Company shall provide, at its expense, Directors and Officers insurance for the Employee in amounts reasonably satisfactory to the Employee, to the extent such insurance is available at reasonable rates, which determination shall be made by the Board of Directors. The Indemnification Agreement previously entered into between the Employee and the Company remains in full force and effect.

12. Excise Tax.

If any payment or benefit that Employee would receive following a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (b) the largest portion, up to and including the total amount, of the Payment, whichever of the amounts determined under (a) and (b), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of outstanding awards under the Equity Plan; and reduction of employee benefits. In the event that acceleration of vesting of outstanding awards under the Equity Plan is to be reduced, such acceleration of vesting shall be undertaken in the reverse order of the date of grant of the Employee’s outstanding equity awards.

The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control of the Company shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint another, nationally recognized accounting firm to make the

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determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Employee and the Company within a commercially reasonable period of time after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company). Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Employee and the Company.

13. No Mitigation.

The Employee shall not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor shall the amount of any payment provided for hereunder be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of employment by the Company (other than as described above in Section 9(c)(ii) and Section 9(d)(ii)).

14. Definitions.

As used herein, the following terms have the following meaning:

(a)“Affiliate” means and includes any person, corporation or other entity controlling, controlled by or under common control with the corporation in question.

(b)“Change in Control” means the occurrence of any of the following events:

(i)Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 40% of the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors (“Voting Securities”) of the Company, or

(ii)Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) as of the beginning of any twenty-four month period (not including any period prior to the date of this Agreement), cease for any reason to constitute at least a majority of the Directors. Notwithstanding the foregoing, any individual becoming a Director subsequent to the beginning of such period, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or

(iii)Consummation by the Company of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the Beneficial Owners of the Voting Securities immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all

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transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, 50% or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or

(iv)Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 50% of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.

For purposes of this definition 14(b), the following terms shall have the meanings set forth below:

(A)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;

(B)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and

(C)“Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Restricted Period” shall mean eighteen (18) months.

(e)“Separation from Service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The Board of Directors or the Compensation Committee of the Board of Directors may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Agreement.

(f)“Specified Employee” shall mean an individual determined by the Board of Directors, Compensation Committee of the Board of Directors or their delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations

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for purposes of determining “specified employee” status. Any such written election shall be deemed part of the Agreement.

15. Representations by Employee.

The Employee represents and warrants that he has full right, power and authority to execute the terms of this Agreement; this Agreement has been duly executed by the Employee and such execution and the performance of this Agreement by the Employee does not result in any conflict, breach or violation of or default under any other agreement or any judgment, order or decree to which the Employee is a party or by which he is bound. The Employee acknowledges and agrees that any material breach of the representations set forth in this Section will constitute Cause under Section 6.

16. Arbitration.

Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of Employee’s employment and the termination of such employment, shall be settled by arbitration in Connecticut, in accordance with the employment dispute rules then existing of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Such claims shall include, without limitation, claims for breach of contract or breach of the covenant of good faith and fair dealing, any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA, and/or any applicable or equivalent state or local laws, claims for wrongful termination, including employment termination in violation of public policy, and claims for personal injury including, without limitation, defamation, fraud and infliction of emotional distress. The parties shall be free to pursue any remedy before the arbitrator that they shall be otherwise permitted to pursue in a court of competent jurisdiction. As a material part of this agreement to arbitrate claims, the Employee and company expressly waive all rights to a jury trial in court on all statutory or other claims. The award of the arbitrator shall be final and binding. The costs of the American Arbitration Association and the arbitrator will be borne equally by the Company and the Employee. Nothing contained herein, however, shall limit the right of the Company or any of its Affiliates to seek equitable or other relief from any court of competent jurisdiction for violation of any provision of Sections 4 and 5 above.

17. Recoupment.

The Employee hereby acknowledges and agrees that the annual bonus described in Section 3(b) and all other payments of incentive-based compensation payable to the Employee by the Company or its Affiliates (whether under this Agreement or otherwise) shall be subject to any applicable clawback or recoupment policy of the Company, as such policy may be amended and in effect from time to time, and shall be subject to recoupment as otherwise required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.

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18. Notices.

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:

Alexion Pharmaceuticals, Inc.

100 College Street

New Haven, Connecticut 06510

Telephone: (203) 272-2596

Fax: (203) 271-8198

Attn: Chief Executive Officer

If to the Employee: to the Employee’s Address on file with the Company.

19. General.

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut applicable to agreements made and to be performed entirely in Connecticut by Connecticut residents.

(b)This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof, except for the Proprietary Information and Inventions Agreement and the Indemnification Agreement. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

(c)This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or any one or more or continuing waivers of any such breach, shall constitute a waiver of the breach of any other term or covenant contained in this Agreement.

(d)This Agreement shall be binding upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto. The Company may not assign its

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rights and obligation under this Agreement without the prior written consent of the Employee, except to a successor of substantially all the Company’s business which expressly assumes the Company’s obligations hereunder in writing. In the event of a sale of all or substantially all of the assets of the Company, the Company shall use its best efforts to cause the purchaser to expressly assume this Agreement. The Employee may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except by will or operation of law, provided that the Employee may designate beneficiaries to receive any payments permitted under the terms of the Company’s benefit plans.

(e)If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)Provisions of this Agreement shall survive any termination of employment if so provided herein or if necessary or desirable fully to accomplish the purposes of other surviving provisions, including without limitation, the obligations of the Employee under Section 5 hereof. Upon termination of the Employee’s employment hereunder by either the Employee or the Company as permitted hereby, all rights, duties and obligations of the Employee and the Company to each other pursuant to this Agreement shall cease, except for the provisions hereof that contemplate performance after termination, including without limitation the obligations of the Employee under Section 5 hereof.

(g)This Agreement is intended to comply with the applicable requirements of Section 409A and shall be construed accordingly. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ALEXION PHARMACEUTICALS, INC.

By:        /s/ Clare Carmichael        

Name: Clare A. Carmichael

Title: EVP & Chief Human Resources Officer

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EMPLOYEE

/s/ John Moriarty        

John B. Moriarty, Jr.

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EX-31.1

Exhibit 31.1

I, David Hallal, certify that:

1 I have reviewed this quarterly report on Form 10-Q of Alexion Pharmaceuticals, Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4 The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5 The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	April 29, 2016	/s/    DAVID HALLAL
		Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Vikas Sinha, certify that:

1 I have reviewed this quarterly report on Form 10-Q of Alexion Pharmaceuticals, Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4 The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5 The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	April 29, 2016	/s/     VIKAS SINHA
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Alexion Pharmaceuticals, Inc. (the “Company”) for the fiscal quarter ended March 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, David Hallal, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	April 29, 2016	/s/     DAVID HALLAL
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Alexion Pharmaceuticals, Inc. (the “Company”) for the fiscal quarter ended March 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, Vikas Sinha, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	April 29, 2016	/s/    VIKAS SINHA
		Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information Document - shares	3 Months Ended
	Mar. 31, 2016	Apr. 26, 2016
Entity Information [Line Items]
Entity Registrant Name	ALEXION PHARMACEUTICALS INC
Entity Central Index Key	0000899866
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		224,020,164

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 710,198	$ 1,010,111
Marketable securities	317,354	374,904
Trade accounts receivable, net	586,249	532,832
Inventories	293,962	289,874
Prepaid expenses and other current assets	219,746	208,993
Total current assets	2,127,509	2,416,714
Property, plant and equipment, net	749,295	697,025
Intangible assets, net	4,627,817	4,707,914
Goodwill	5,049,321	5,047,885
Other assets	248,503	228,343
Total assets	12,802,445	13,097,881
Liabilities and Stockholders' Equity
Accounts payable	42,897	57,360
Accrued expenses	359,077	403,348
Deferred revenue	78,416	20,504
Current portion of long-term debt	35,358	166,365
Other current liabilities	87,865	62,038
Total current liabilities	603,613	709,615
Long-term debt, less current portioon	3,212,772	3,254,536
Contingent consideration	107,085	121,424
Facility lease obligation	172,970	151,307
Deferred Tax Liabilities, Net, Noncurrent	535,910	528,990
Other liabilities	107,818	73,393
Total liabilities	$ 4,740,168	$ 4,839,265
Commitments and contingencies (Note 17)
Stockholders' Equity:
Common stock, $.0001 par value; 290,000 shares authorized; 231,136 and 230,498 shares issued at March 31, 2016 and December 31, 2015, respectively	$ 23	$ 23
Additional paid-in capital	7,793,056	7,726,560
Treasury stock, at cost, 6,934 and 4,851 shares at March 31, 2016 and December 31, 2015, respectively	(1,007,178)	(710,663)
Accumulated other comprehensive income	3,815	62,301
Retained earnings	1,272,561	1,180,395
Total stockholders' equity	8,062,277	8,258,616
Total liabilities and stockholders' equity	$ 12,802,445	$ 13,097,881

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	290,000	290,000
Common stock, shares issued	231,136	230,498
Treasury Stock, Shares	6,934	4,851

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net product sales	$ 700,425	$ 600,333
Other Revenue	613	0
Revenue, Net	701,038	600,333
Cost of sales	58,986	69,399
Operating expenses:
Research and development	176,290	221,080
Selling, general and administrative	232,561	187,116
Amortization of Intangible Assets Acquired	80,094	0
Change in fair value of contingent consideration	(14,800)	11,979
Acquisition-related costs	1,339	0
Restructuring expenses	722	7,052
Total operating expenses	476,206	427,227
Operating income	165,846	103,707
Other income and expense:
Investment income	1,551	2,884
Interest expense	(23,890)	(651)
Foreign currency gain	91	1,005
Income before income taxes	143,598	106,945
Income tax provision	51,432	15,622
Net income	$ 92,166	$ 91,323
Earnings per common share
Basic	$ 0.41	$ 0.46
Diluted	$ 0.41	$ 0.45
Shares used in computing earnings per common share
Basic	225,060	199,361
Diluted	226,873	202,034

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Condensed Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 92,166	$ 91,323
Foreign currency translation	1,996	(5,388)
Unrealized gains on marketable securities	1,498	1,057
Unrealized gains (losses) on pension obligation	2,121	(252)
Unrealized (losses) gains on hedging activities, net of tax of $(35,650), and $38,175, respectively	(64,101)	67,287
Net other comprehensive income (loss)	(58,486)	62,704
Comprehensive income	$ 33,680	$ 154,027

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Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income (Parenthetical) [Abstract]
Unrealized gains (losses) on hedging activities - tax effect	$ (35,560)	$ 38,175

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 92,166	$ 91,323
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	96,783	10,578
Change in fair value of contingent consideration	(14,800)	11,979
Share-based compensation expense	56,889	42,797
Premium amortization of available-for-sale securities	515	3,178
Deferred taxes	29,332	(24,823)
Change in excess tax benefit from stock options	(5,917)	(52,521)
Unrealized foreign currency gain	(13,762)	(3,916)
Unrealized loss (gain) on forward contracts	17,098	(434)
Other	609	7,377
Changes in operating assets and liabilities:
Accounts receivable	(37,287)	(58,918)
Inventories	(3,838)	2,626
Prepaid expenses and other assets	(65,216)	(38,980)
Accounts payable, accrued expenses and other liabilities	(42,460)	(13,659)
Deferred revenue	57,872	46,427
Net cash provided by operating activities	167,984	23,034
Cash flows from investing activities:
Purchases of available-for-sale securities	(207,996)	(166,319)
Proceeds from maturity or sale of available-for-sale securities	269,495	176,256
Purchases of trading securities	(3,042)	(2,236)
Purchases of property, plant and equipment	(64,204)	(57,075)
Other	82	951
Net cash used in investing activities	(5,665)	(48,423)
Cash flows from financing activities:
Payments on term loan	(175,000)	(12,000)
Excess tax benefit from stock options	5,917	52,521
Repurchase of Common Stock	(296,515)	(60,026)
Net proceeds from the exercise of stock options	3,433	24,882
Other	(4,092)	(303)
Net cash (used in) provided by financing activities	(466,257)	5,074
Effect of exchange rate changes on cash	4,025	(6,870)
Net change in cash and cash equivalents	(299,913)	(27,185)
Cash and cash equivalents at beginning of period	1,010,111	943,999
Cash and cash equivalents at end of period	710,198	916,814
Supplemental cash flow disclosures from investing and financing activities:
Capitalization of construction costs related to facility lease obligations	25,647	7,813
Accrued expenses for purchases of property, plant and equipment	$ 24,840	$ 11,436

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Business

3 Months Ended

Mar. 31, 2016

Business [Abstract]

Business

Business

Alexion Pharmaceuticals, Inc. (Alexion, the Company, we, our or us) is a biopharmaceutical company focused on serving patients with devastating and ultra-rare disorders through the innovation, development and commercialization of life-transforming therapeutic products.

In our complement franchise, Soliris® (eculizumab) is the first and only therapeutic approved for patients with either paroxysmal nocturnal hemoglobinuria (PNH), a life-threatening and ultra-rare genetic blood disorder, or atypical hemolytic uremic syndrome (aHUS), a life-threatening and ultra-rare genetic disease. PNH and aHUS are two severe and ultra-rare disorders resulting from chronic uncontrolled activation of the complement component of the immune system.

In our metabolic franchise, we market Strensiq® (asfotase alfa) for the treatment of patients with hypophosphatasia (HPP) and Kanuma® (sebelipase alfa) for the treatment of patients with lysosomal acid lipase deficiency (LAL-D). HPP is a genetic ultra-rare disease characterized by defective bone mineralization that can lead to deformity of bones and other skeletal abnormalities. LAL-D is a serious, life threatening ultra-rare disease in which genetic mutations result in decreased activity of the LAL enzyme leading to marked accumulation of lipids in vital organs, blood vessels and other tissues.

We are also evaluating additional potential indications for eculizumab in other severe and devastating diseases in which uncontrolled complement activation is the underlying mechanism, and we are progressing in various stages of development with additional product candidates as potential treatments for patients with severe and life-threatening rare disorders.

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Basis of Presentation and Principles Of Consolidation

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These accounting principles were applied on a basis consistent with those of the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. In our opinion, the accompanying unaudited consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial statements for interim periods in accordance with accounting principles generally accepted in the United States. The condensed consolidated balance sheet data as of December 31, 2015 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 included in our Annual Report on Form 10-K. The results of operations for the three months endedMarch 31, 2016 are not necessarily indicative of the results to be expected for the full year.

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

The accompanying unaudited condensed consolidated financial statements include the accounts of Alexion Pharmaceuticals, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Our significant accounting policies are described in Note 1 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new standard which amends revenue recognition principles and provides a single set of criteria for revenue recognition among all industries. The new standard provides a five step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in both interim and annual periods. The standard is effective for interim and annual periods beginning after December 15, 2017 and allows for adoption using a full retrospective method, or a modified retrospective method. Entities may elect to early adopt the standard for annual periods beginning after December 15, 2016. We are currently assessing the method of adoption and the expected impact the new standard has on our financial position and results of operations.

In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs. The new standard aligns the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs be presented as a direct deduction from the carrying amount of the related debt. We have adopted the provisions of this standard in the first quarter 2016 and reclassified $8,635 of deferred financing costs from other current assets to the current portion of long term debt and $26,714 other non current assets to the long-term debt, less current portion in our consolidated balance sheets as of December 31, 2015.

In April 2015, the FASB issued a new standard clarifying the accounting for a customer's fees paid in a cloud computing arrangement. Under this standard, if a cloud computing arrangement includes a software license, the customer would account for the software license consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer would account for the arrangement as a service contract. We adopted the provisions of this standard in the first quarter 2016. The adoption did not have a material effect on our financial condition or results of operations.

In February 2016, the FASB issued a new standard requiring that the rights and obligations arising from leases be recognized on the balance sheet by recording a right-of-use asset and corresponding lease liability. The new standard also requires qualitative and quantitative disclosures to understand the amount, timing, and uncertainty of cash flows arising from leases as well as significant management estimates utilized. The standard is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective adoption. We are currently assessing the impact of this standard on our financial condition and results of operations.

In March 2016, the FASB issued a new standard simplifying aspects of the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, statutory withholding requirements, and classification on the statement of cash flows. The standard is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We are currently assessing the impact of this standard on our financial condition and results of operations.

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Acquisitions

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Acquisitions

Acquisitions

On May 6, 2015, we announced that we entered into a definitive agreement to acquire Synageva BioPharma Corp. (Synageva), a publicly-held clinical-stage biotechnology company based in Lexington, Massachusetts for per share consideration of $115 in cash and 0.6581 shares of Alexion stock. At this date, the announced purchase consideration was estimated at approximately $8,400,000, net of Synageva cash, based on the closing price of Alexion stock on May 5, 2015 of $168.55.

On June 22, 2015, we completed the acquisition of Synageva, in a transaction accounted for under the acquisition method of accounting for business combinations. Under the acquisition method of accounting, the assets acquired and liabilities assumed from Synageva were recorded as of the acquisition date at their respective fair values. Synageva's results of operations are included in the consolidated financial statements from the date of acquisition. The acquisition furthers our objective to develop and commercialize life-transforming therapies to an increasing number of patients with devastating and rare diseases. Synageva's lead product candidate, Kanuma.

We acquired all of the outstanding shares of common stock of Synageva for $4,565,524 in cash and 26,125 shares of common stock. At closing of the business combination on June 22, 2015, the purchase consideration was approximately $8,860,000, net of Synageva cash, based on Alexion's closing share price on the date of acquisition of $188.24. We financed the cash consideration with existing cash and proceeds from our new credit facility described further in Note 6.

The aggregate consideration to acquire Synageva consisted of:

Stock consideration	$	4,917,810
Cash consideration	4,565,524
Total purchase price	$	9,483,334

The following table summarizes the estimated fair values of assets acquired and liabilities assumed:

Cash	$	626,217
Inventory	23,880
In-process research and development (IPR&D)	4,236,000
Deferred tax liabilities, net	(171,638		)
Other assets and liabilities	(26,373		)
Net assets acquired	4,688,086
Goodwill	4,795,248
Total purchase price	$	9,483,334

Our accounting for this acquisition is preliminary. The fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, and our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The areas of these preliminary estimates that are not yet finalized relate primarily to tax-related items and potential contingent liabilities.

We acquired $23,880 of Kanuma inventory. The estimated fair value of work-in-process and finished goods inventory was determined utilizing the comparative sales method, based on the expected selling price of the inventory, adjusted for incremental costs to complete the manufacturing process and for direct selling efforts, as well as for a reasonable profit allowance. The estimated fair value of raw material inventory was valued at replacement cost, which is equal to the value a market participant would pay to acquire the inventory.

Intangible assets associated with IPR&D projects primarily relate to Synageva's lead product candidate, Kanuma. The estimated fair value of IPR&D assets of $4,236,000 was determined using the multi-period excess earnings method, a variation of the income approach. The multi-period excess earnings method estimates the value of an intangible asset equal to the present value of the incremental after-tax cash flows attributable to that intangible asset. The fair value using the multi-period excess earnings method was dependent on an estimated weighted average cost of capital for Synageva of 10%, which represents a rate of return that a market participant would expect for these assets.

The excess of purchase price over the fair value amounts of the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. The goodwill, which is not tax-deductible, has been recorded as a noncurrent asset and is not amortized, but is subject to an annual review for impairment. The goodwill represents future economic benefits arising from other assets acquired that could not be individually identified and separately recognized and expected synergies that are specific to our business and not available to market participants, including our unique ability to commercialize therapies for rare diseases, our existing relationships with specialty physicians who can identify patients with LAL-D, a global distribution network to facilitate drug delivery and other benefits that we believe will result from combining the operations of Synageva within our operations.

We recorded a net deferred tax liability of $171,638. This amount was primarily comprised of $602,887 of deferred tax liabilities related to the IPR&D and inventory acquired, offset by $431,249 of deferred tax assets related to net operating loss carryforwards (NOLs), tax credits, and other temporary differences, which we expect to utilize.

Acquisition-Related Costs

Acquisition-related costs associated with our business combinations for the years ended for the three months ended, March 31, 2016 and 2015 include the following:

	Three months ended March 31,
	2016		2015
Transaction costs (1)	$	375	$	—
Integration costs	964		—
	$	1,339	$	—
(1) Transaction costs include investment advisory, legal, and accounting fees

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Inventories

3 Months Ended

Mar. 31, 2016

Inventory, Net [Abstract]

Inventories

Inventories

Inventories are stated at the lower of cost or estimated realizable value. We determine the cost of inventory on a standard cost basis, which approximates average costs.

The components of inventory are as follows:

	March 31,		December 31,
	2016		2015
Raw materials	$	16,948	$	17,924
Work-in-process	162,979		180,324
Finished goods	114,035		91,626
	$	293,962	$	289,874

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Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

The following table summarizes the carrying amount of our intangible assets and goodwill, net of accumulated amortization:

		March 31, 2016							December 31, 2015
	Estimated Life (years)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Licenses	6-8	$	28,507	$	(28,507	)	$	—	$	28,507	$	(28,504	)	$	3
Patents	7	10,517		(10,517		)	—		10,517		(10,517		)	—
Purchased technology	6-16	4,708,495		(196,678		)	4,511,817		4,708,495		(116,584		)	4,591,911
Acquired IPR&D	Indefinite	116,000		—			116,000		116,000		—			116,000
Total		$	4,863,519	$	(235,702	)	$	4,627,817	$	4,863,519	$	(155,605	)	$	4,707,914
Goodwill	Indefinite	$	5,052,222	$	(2,901	)	$	5,049,321	$	5,050,786	$	(2,901	)	$	5,047,885

Amortization expense was $80,097 and $11for the three months endedMarch 31, 2016 and 2015, respectively. Total estimated amortization expense for finite-lived intangible assets is $240,106 for the nine months ending December 31, 2016, and $320,142 for each of the years ending December 31, 2017 through December 31, 2021.

The following table summarizes the changes in the carrying amount of goodwill:

Balance at December 31, 2015	$	5,047,885
Change in goodwill associated with prior acquisition	1,436
Balance at March 31, 2016	$	5,049,321

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Debt

3 Months Ended

Mar. 31, 2016

Debt [Abstract]

Debt

Debt

In June 2015, Alexion entered into a credit agreement (Credit Agreement) with a syndicate of banks, which provides for a $3,500,000 term loan facility and a $500,000 revolving credit facility maturing in five years. Borrowings under the term loan are payable in quarterly installments equal to 1.25% of the original loan amount, beginning December 31, 2015. Final repayment of the term loan and revolving credit loans are due on June 22, 2020. In addition to borrowings in which prior notice is required, the revolving credit facility includes a sublimit of $100,000 in the form of letters of credit and borrowings on same-day notice, referred to as swingline loans, of up to $25,000. Borrowings can be used for working capital requirements, acquisitions and other general corporate purposes. With the consent of the lenders and the administrative agent, and subject to satisfaction of certain conditions, we may increase the term loan facility and/or the revolving credit facility in an amount that does not cause our consolidated net leverage ratio to exceed the maximum allowable amount.

In connection with entering into the Credit Agreement, we paid $45,492 in financing costs which are being amortized as interest expense over the life of the debt. Amortization expense associated with deferred financing costs for the three months ended March 31, 2016 was $2,513.

We made principle payments of $175,000 during the three months ended March 31, 2016. As of March 31, 2016, we had $3,281,250 outstanding on the term loan. As of March 31, 2016, we had open letters of credit of $12,970, and our borrowing availability under the revolving facility was $487,030.

The fair value of our long term debt, which is measured using Level 2 inputs, approximates book value.

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2016

Earnings Per Common Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic earnings per common share (EPS) is computed by dividing net income by the weighted-average number of shares of common stock outstanding. For purposes of calculating diluted EPS, the denominator reflects the potential dilution that could occur if stock options, unvested restricted stock, unvested restricted stock units or other contracts to issue common stock were exercised or converted into common stock, using the treasury stock method.

The following table summarizes the calculation of basic and diluted EPS for the three months endedMarch 31, 2016 and 2015:

	Three months ended
	March 31,
	2016		2015
Net income used for basic and diluted calculation	$	92,166	$	91,323
Shares used in computing earnings per common share—basic	225,060		199,361
Weighted-average effect of dilutive securities:
Stock awards	1,813		2,673
Shares used in computing earnings per common share—diluted	226,873		202,034
Earnings per common share:
Basic	$	0.41	$	0.46
Diluted	$	0.41	$	0.45

We exclude from EPS the weighted-average number of securities whose effect is anti-dilutive. Excluded from the calculation of EPS for the three months ended March 31, 2016 and 2015 were 3,975 and 2,248 shares of common stock, respectively, because their effect was anti-dilutive.

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Marketable Securities

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Text Block]

Marketable Securities

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of available-for-sale investments by type of security at March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
Commercial paper	$	3,999	$	—	$	—		$	3,999
Corporate bonds	136,009		553		(3		)	136,559
Municipal bonds	50,470		43		(2		)	50,511
Other government-related obligations:
U.S.	13,643		43		(27		)	13,659
Foreign	141,593		244		(19		)	141,818
	$	345,714	$	883	$	(51	)	$	346,546

	December 31, 2015
	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
Commercial paper	$	254,396	$	—	$	—		$	254,396
Corporate bonds	133,062		23		(336		)	132,749
Municipal bonds	87,173		1		(63		)	87,111
Other government-related obligations:
U.S.	25,244		—		(94		)	25,150
Foreign	163,403		—		(504		)	162,899
Bank certificates of deposit	27,000		—		—			27,000
	$	690,278	$	24	$	(997	)	$	689,305

The aggregate fair value of available-for-sale securities in an unrealized loss position as of March 31, 2016 and December 31, 2015 was $62,496 and $293,947, respectively. Investments that have been in a continuous unrealized loss position for more than 12 months were not material. As of March 31, 2016, we believe that the cost basis of our available-for-sale investments is recoverable.

The fair values of available-for-sale securities by classification in the condensed consolidated balance sheet were as follows:

	March 31, 2016		December 31, 2015
Cash and cash equivalents	$	40,999	$	323,218
Marketable securities	305,547		366,087
	$	346,546	$	689,305

The fair values of available-for-sale debt securities at March 31, 2016, by contractual maturity, are summarized as follows:

	March 31, 2016
Due in one year or less	$	140,145
Due after one year through three years	206,401
	$	346,546

As of March 31, 2016 and December 31, 2015, the fair value of our trading securities was $11,807 and $8,817, respectively.

We utilize the specific identification method in computing realized gains and losses. Realized gains and losses on our available-for-sale and trading securities were not material for the three months endedMarch 31, 2016.

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Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

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

We enter into foreign exchange forward contracts, with durations of up to 60 months, to hedge exposures resulting from portions of our forecasted revenues, including intercompany revenues, that are denominated in currencies other than the U.S. dollar. The purpose of these hedges is to reduce the volatility of exchange rate fluctuations on our operating results and to increase the visibility of the foreign exchange impact on forecasted revenues. These hedges are designated as cash flow hedges upon contract inception. At March 31, 2016, we had open contracts with notional amounts totaling $2,088,952 that qualified for hedge accounting.

The impact on accumulated other comprehensive income (AOCI) and earnings from foreign exchange contracts that qualified as cash flow hedges, for the three months endedMarch 31, 2016 and 2015 were as follows:

	Three months ended
	March 31,
	2016			2015
Gain (loss) recognized in AOCI, net of tax	$	(49,442	)	$	93,809
Gain reclassified from AOCI to net product sales (effective portion), net of tax	$	14,659		$	25,447
Gain reclassified from AOCI to other income and expense (ineffective portion), net of tax	$	—		$	1,075

Assuming no change in foreign exchange rates from market rates at March 31, 2016, $39,730 of gain recognized in AOCI will be reclassified to revenue over the next 12 months.

We enter into foreign exchange forward contracts, with durations of approximately 90 days, designed to limit the balance sheet exposure of monetary assets and liabilities. We enter into these hedges to reduce the impact of fluctuating exchange rates on our operating results. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of March 31, 2016, the notional amount of foreign exchange contracts where hedge accounting is not applied was $307,585.

We recognized a (loss) gain of $(12,969) and $6,423, in other income and expense, for the three months ended March 31, 2016 and 2015, respectively, associated with the foreign exchange contracts not designated as hedging instruments. These amounts were partially offset by gains or losses on monetary assets and liabilities.

The following tables summarize the fair value of outstanding derivatives at March 31, 2016 and December 31, 2015:

	March 31, 2016
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	55,976	Other current liabilities	$	15,870
Foreign exchange forward contracts	Other non-current assets	35,019		Other non-current liabilities	30,740
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	2,594		Other current liabilities	16,186
Total fair value of derivative instruments		$	93,589		$	62,796

	December 31, 2015
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	85,058	Other current liabilities	$	1,491
Foreign exchange forward contracts	Other non-current assets	66,309		Other non-current liabilities	4,773
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	6,687			4,157
Total fair value of derivative instruments		$	158,054		$	10,421

Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association (ISDA) agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. The following tables summarize the potential effect on our condensed consolidated balance sheets of offsetting our foreign exchange forward contracts subject to such provisions:

	March 31, 2016
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet			Derivative Financial Instruments			Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	93,589		$	—	$	93,589		$	(27,928	)	$	—	$	65,661
Derivative liabilities	(62,796		)	—		(62,796		)	27,928			—		(34,868		)

	December 31, 2015
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet			Derivative Financial Instruments			Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	158,054		$	—	$	158,054		$	(10,421	)	$	—	$	147,633
Derivative liabilities	(10,421		)	—		(10,421		)	10,421			—		—

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Other Investments

3 Months Ended

Mar. 31, 2016

Investments, All Other Investments [Abstract]

Other investments

Other Investments

Other investments include our investment of $37,500 in the preferred stock of Moderna LLC. Our investment is recorded at cost within other assets in our condensed consolidated balance sheets. The carrying value of this investment was not impaired as of March 31, 2016.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Stockholders' Equity

In November 2012, our Board of Directors authorized a share repurchase program. The repurchase program does not have an expiration date, and we are not obligated to acquire a particular number of shares. The repurchase program may be discontinued at any time at the Company's discretion. In May 2015, our Board of Directors increased the authorization to acquire shares with an aggregate value of up to $1,000,000 for future purchases under the repurchase program, which superseded all prior repurchase programs. Under the program, we repurchased 2,083 and 334 shares of our common stock at a cost of $296,515 and $60,026 during the three months endedMarch 31, 2016 and 2015, respectively.

Subsequent to March 31, 2016, we repurchased 245 shares of our common stock under our repurchase program at a cost of $34,136. As of April 29, 2016, there is a total of $425,213 remaining for repurchases under the repurchase program.

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Other Comprehensive Income and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income [Abstract]

Other Comprehensive Income and Accumulated Other Comprehensive Income

Other Comprehensive Income and Accumulated Other Comprehensive Income

The following tables summarize the changes in AOCI, by component, for the three months endedMarch 31, 2016 and 2015:

	Defined Benefit Pension Plans			Unrealized Gains (Losses) from Marketable Securities			Unrealized Gains (Losses) from Hedging Activities			Foreign Currency Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)
Balances, December 31, 2015	$	(9,589	)	$	(785	)	$	92,670		$	(19,995	)	$	62,301
Other comprehensive income before reclassifications	2,035			1,333			(49,442		)	1,996			(44,078		)
Amounts reclassified from other comprehensive income	86			165			(14,659		)	—			(14,408		)
Net other comprehensive income (loss)	2,121			1,498			(64,101		)	1,996			(58,486		)
Balances, March 31, 2016	$	(7,468	)	$	713		$	28,569		$	(17,999	)	$	3,815

	Defined Benefit Pension Plan			Unrealized Gains (Losses) from Marketable Securities			Unrealized Gains (Losses) From Hedging Activities			Foreign Currency Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)
Balances, December 31, 2014	$	(16,570	)	$	(234	)	$	87,308		$	(13,719	)	$	56,785
Other comprehensive income before reclassifications	(488		)	1,065			93,809			(5,388		)	88,998
Amounts reclassified from other comprehensive income	236			(8		)	(26,522		)	—			(26,294		)
Net other comprehensive income (loss)	(252		)	1,057			67,287			(5,388		)	62,704
Balances, March 31, 2015	$	(16,822	)	$	823		$	154,595		$	(19,107	)	$	119,489

The table below provides details regarding significant reclassifications from AOCI during the three months endedMarch 31, 2016 and 2015:

Details about Accumulated Other Comprehensive Income Components	Amount Reclassified From Accumulated Other Comprehensive Income during the three months ended March 31,						Affected Line Item in the Condensed Consolidated Statements of Operations
	2016			2015
Unrealized Gains (Losses) from Hedging Activity
Effective portion of foreign exchange contracts	$	22,812		$	29,083		Net product sales
Ineffective portion of foreign exchange contracts	—			1,228			Foreign currency gain
	22,812			30,311
	(8,153		)	(3,789		)	Income tax provision
	$	14,659		$	26,522
Unrealized Gains (Losses) from Marketable Securities
Realized (loss) gain on sale of securities	$	(262	)	$	13		Investment income
	(262		)	13
	97			(5		)	Income tax provision
	$	(165	)	$	8
Defined Benefit Pension Plans
Amortization of prior service costs and actuarial losses	$	(114	)	$	(311	)	(a)
	(114		)	(311		)
	28			75			Income tax provision
	$	(86	)	$	(236	)

(a) This AOCI component is included in the computation of net periodic pension benefit cost (see Note 15 for additional details).

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Fair Value Measurement

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

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

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value.

		Fair Value Measurement at March 31, 2016
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Institutional money market funds	$	82,416	$	—	$	82,416	$	—
Cash equivalents	Commercial paper	$	3,999	$	—	$	3,999	$	—
Cash equivalents	Corporate bonds	$	15,000	$	—	$	15,000	$	—
Cash equivalents	Municipal bonds	$	22,000	$	—	$	22,000	$	—
Marketable securities	Mutual funds	$	11,807	$	11,807	$	—	$	—
Marketable securities	Corporate bonds	$	121,559	$	—	$	121,559	$	—
Marketable securities	Municipal bonds	$	28,511	$	—	$	28,511	$	—
Marketable securities	Other government-related obligations	$	155,477	$	—	$	155,477	$	—
Other current assets	Foreign exchange forward contracts	$	58,570	$	—	$	58,570	$	—
Other assets	Foreign exchange forward contracts	$	35,019	$	—	$	35,019	$	—
Other current liabilities	Foreign exchange forward contracts	$	32,056	$	—	$	32,056	$	—
Other liabilities	Foreign exchange forward contracts	$	30,740	$	—	$	30,740	$	—
Other current liabilities	Acquisition-related contingent consideration	$	55,343	$	—	$	—	$	55,343
Contingent consideration	Acquisition-related contingent consideration	$	107,085	$	—	$	—	$	107,085

		Fair Value Measurement at December 31, 2015
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Institutional money market funds	$	179,898	$	—	$	179,898	$	—
Cash equivalents	Commercial paper	$	192,418	$	—	$	192,418	$	—
Cash equivalents	Corporate bonds	$	12,250	$	—	$	12,250	$	—
Cash equivalents	Municipal bonds	$	60,001	$	—	$	60,001	$	—
Cash equivalents	Other government-related obligations	$	31,549	$	—	$	31,549	$	—
Cash equivalents	Bank certificates of deposit	$	27,000	$	—	$	27,000	$	—
Marketable securities	Mutual funds	$	8,817	$	8,817	$	—	$	—
Marketable securities	Commercial paper	$	61,978	$	—	$	61,978	$	—
Marketable securities	Corporate bonds	$	120,499	$	—	$	120,499	$	—
Marketable securities	Municipal bonds	$	27,110	$	—	$	27,110	$	—
Marketable securities	Other government-related obligations	$	156,500	$	—	$	156,500	$	—
Other current assets	Foreign exchange forward contracts	$	91,745	$	—	$	91,745	$	—
Other assets	Foreign exchange forward contracts	$	66,309	$	—	$	66,309	$	—
Other current liabilities	Foreign exchange forward contracts	$	5,648	$	—	$	5,648	$	—
Other liabilities	Foreign exchange forward contracts	$	4,773	$	—	$	4,773	$	—
Other current liabilities	Acquisition-related contingent consideration	$	55,804	$	—	$	—	$	55,804
Contingent consideration	Acquisition-related contingent consideration	$	121,424	$	—	$	—	$	121,424

There were no securities transferred between Level 1, 2 and 3 during the three months endedMarch 31, 2016.

Valuation Techniques

We classify mutual fund investments, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.

Cash equivalents and marketable securities classified as Level 2 within the valuation hierarchy consist of institutional money market funds, commercial paper, municipal bonds, U.S. and foreign government-related debt, corporate debt securities and certificates of deposit. We estimate the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

Our derivative assets and liabilities include foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk as well as an evaluation of our counterparties’ credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy.

Contingent consideration liabilities related to acquisitions are classified as Level 3 within the valuation hierarchy and are valued based on various estimates, including probability of success, discount rates and amount of time until the conditions of the milestone payments are met.

As of March 31, 2016, there has not been any impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties’ credit risks.

Contingent Consideration

In connection with prior acquisitions, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approvals or sales-based milestone events. We determine the fair value of these obligations on the acquisition date using various estimates that are not observable in the market and represent a Level 3 measurement within the fair value hierarchy. The resulting probability-weighted cash flows were discounted using a cost of debt of 5.5% for developmental milestones and a weighted average cost of capital ranging from 10% to 21% for sales-based milestones.

Each reporting period, we adjust the contingent consideration to fair value with changes in fair value recognized in operating earnings. Changes in fair values reflect new information about the probability and timing of meeting the conditions of the milestone payments. In the absence of new information, changes in fair value will only reflect the interest component of contingent consideration related to the passage of time as development work progresses towards the achievement of the milestones.

Estimated future contingent milestone payments related to prior business combinations range from zero if no milestone events are achieved, to a maximum of $826,000 if all development, regulatory and sales-based milestones are reached. As of March 31, 2016, the fair value of acquisition-related contingent consideration was $162,428. The following table represents a roll-forward of our acquisition-related contingent consideration:

Balance at December 31, 2015	$	(177,228	)
Change in fair value	14,800
Balance at March 31, 2016	$	(162,428	)

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table provides a comparative summary of our income tax provision and effective tax rate for the three months endedMarch 31, 2016 and 2015:

	Three months ended
	March 31,
	2016			2015
Provision for income taxes	$	51,432		$	15,622
Effective tax rate	35.8		%	14.6		%

The tax provision for the three months endedMarch 31, 2016 and 2015 is attributable to the U.S. federal, state and foreign income taxes on our profitable operations. The increase in the effective tax rate for the three months endedMarch 31, 2016 as compared to the same period in the prior year is primarily attributable to the deferred tax cost associated with the distribution of earnings from our captive foreign partnership. This non-cash deferred tax cost increased the effective tax rate by approximately 19%.

In the first quarter of 2016, we identified a correction to our 2015 tax provision of $8,955 due to a calculation error. This understated income tax expense and the deferred tax liability as of December 31, 2015 and was recorded as an out of period adjustment in the first quarter of 2016. The correction was determined to be immaterial to our consolidated financial statements for the periods ending December 31, 2015 and March 31, 2016 as well as our expected results for 2016.

Tax years 2013 and 2014 are currently under review by the Examination Division of the Internal Revenue Service (IRS). As of March 31, 2016, we have not been notified of any significant proposed adjustments by the IRS.

We continue to maintain a valuation allowance against certain deferred tax assets where realization is not certain.

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Defined Benefit Plans

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Defined Benefit Plans

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

The components of net periodic benefit cost are as follows:

	Three months ended
	March 31,
	2016			2015
Service cost	$	2,023		$	2,421
Interest cost	60			180
Expected return on plan assets	(163		)	(243		)
Employee contributions	(352		)	(427		)
Amortization	114			311
Total net periodic benefit cost	$	1,682		$	2,242

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Facility Lease Obligations

3 Months Ended

Mar. 31, 2016

Leases [Abstract]

Leases

Facility Lease Obligations

New Haven Facility Lease Obligation

In November 2012, we entered into a new lease agreement for office and laboratory space to be constructed in New Haven, Connecticut. The term of the new lease commenced in 2015 and will expire in 2030, with a renewal option of ten years. Although we will not legally own the premises, we are deemed to be the owner of the building during the construction period based on applicable accounting guidance for build-to-suit leases because of the substantial amount of tenant improvements we directly funded during the construction period. Due to the substantial tenant improvements directly funded during construction, we will continue to be deemed the owner of the building once construction is complete. Accordingly, the landlord's costs of constructing the facility during construction are required to be capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in our consolidated balance sheet.

Construction of the new facility was completed and the building was placed into service in the first quarter 2016. As of March 31, 2016 and December 31, 2015, our facility lease obligation related to this facility was $134,211 and $132,866,respectively.

Lonza Facility Lease Obligation

During the third quarter 2015, we entered into a new agreement with Lonza Group AG and its affiliates (Lonza) whereby Lonza will construct a new manufacturing facility dedicated to Alexion at its existing Portsmouth, New Hampshire facility. The agreement requires us to make certain payments during the construction of the new manufacturing facility and annual payments for ten years thereafter. As a result of our contractual right to full capacity of the new manufacturing facility, a portion of the payments under the agreement are considered to be lease payments and a portion as payment for the supply of inventory. Although we will not legally own the premises, we are deemed to be the owner of the manufacturing facility during the construction period based on applicable accounting guidance for build-to-suit leases due to our involvement during the construction period. As of March 31, 2016 and December 31, 2015, we recorded a construction-in-process asset of $42,652 and $19,259 and an offsetting facility lease obligation of $35,632 and $15,229 associated with the manufacturing facility, respectively.

Payments made to Lonza under the agreement are allocated to the purchases of inventory and the repayment of the facility lease obligation on a relative fair value basis. In 2016, we made $23,000 of payments to Lonza under this agreement, of which $2,990 was applied against the outstanding facility lease obligation and $20,010 was recognized as a prepayment of inventory.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

Manufacturing Agreements

We have various manufacturing development agreements to support our clinical and commercial product needs. We rely on Lonza, a third party manufacturer, to produce a portion of commercial and clinical quantities of Soliris and Strensiq. We have various agreements with Lonza with remaining total non-cancellable future commitments of approximately $1,134,661. If we terminate certain supply agreements with Lonza without cause, we will be required to pay for product scheduled for manufacture under our arrangement. Under an existing arrangement with Lonza, we also pay Lonza a royalty on sales of Soliris manufactured at Alexion Rhode Island Manufacturing Facility (ARIMF) and a payment with respect to sales of Soliris manufactured at Lonza facilities.

In addition to Lonza, we have non-cancellable commitments of $35,035 with other third party manufacturers.

Contingent Liabilities

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

We have in the past received, and may in the future receive, notices from third parties claiming that their patents may be infringed by the development, manufacture or sale of Soliris. Under the guidance of ASC 450, Contingencies, we record a royalty accrual based on our best estimate of the fair value percent of net sales of Soliris that we could be required to pay the owners of patents for technology used in the manufacture and sale of Soliris. A costly license, or inability to obtain a necessary license, could have a material adverse effect on our financial results.

In May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting information related to our grant-making activities and compliance with the Foreign Corrupt Practices Act (FCPA) in various countries. In addition, in October 2015, Alexion received a request from the U.S. Department of Justice (DOJ) for the voluntary production of documents and other information pertaining to Alexion's compliance with the FCPA. The SEC and DOJ also seek information related to Alexion’s recalls of specific lots of Soliris and related securities disclosures. Alexion is cooperating with these investigations. At this time, Alexion is unable to predict the duration, scope or outcome of these investigations. Given the ongoing nature of these investigations, management does not currently believe a loss related to these matters is probable or that the potential magnitude of such loss or range of loss, if any, can be reasonably estimated.

In March 2013, we received a Warning Letter (Warning Letter) from the U.S. Food and Drug Administration (FDA) regarding compliance with current Good Manufacturing Practices (cGMP) at ARIMF. The Warning Letter followed receipt of a Form 483 Inspectional Observations by the FDA in connection with an FDA inspection that concluded in August 2012. The observations relate to commercial and clinical manufacture of Soliris at ARIMF. We responded to the Warning Letter in a letter to the FDA dated in April 2013. As previously announced, the FDA issued Form 483s in August 2014 and August 2015 relating to observations at ARIMF. The inspectional observations from the August 2015 letter have since been closed out by the FDA.

The observations are inspectional and do not represent a final FDA determination of compliance. We continue to manufacture products, including Soliris, in this facility. While the resolution of the issues raised in the Warning Letter is difficult to predict, we do not currently believe a loss related to this matter is probable or that the potential magnitude of such loss or range of loss, if any, can be reasonably estimated.

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Restructuring

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

In connection with the acquisition and integration of Synageva in 2015, we recorded a restructuring benefit of $924 for the three months endedMarch 31, 2016 primarily related to changes in estimates associated with employee costs. We expect to pay all remaining accrued amounts related to this restructuring activity by the end of 2016.

In the fourth quarter 2014, we announced plans to move our European headquarters from Lausanne to Zurich, Switzerland. The relocation of our European headquarters supports our operational needs based on growth in the European region. During the three months endedMarch 31, 2016, we incurred additional restructuring costs of $1,646. We expect to pay all remaining accrued amounts related to this restructuring activity by the end of 2016.

The following table presents a reconciliation of the restructuring reserve recorded within accrued expenses on the Company's condensed consolidated balance sheet for the three months endedMarch 31, 2016:

	Employee Separation Costs			Contract Termination Costs			Other Costs			Total
Liability, beginning of period	$	6,390		$	682		$	169		$	7,241
Restructuring expenses	—			35			417			452
Cash settlements	(3,806		)	(508		)	(570		)	(4,884		)
Adjustments to previous estimates	(1,148		)	1,418			—			270
Liability, end of period	$	1,436		$	1,627		$	16		$	3,079

The restructuring reserve of $3,079 is recorded in accrued expenses on the Company's condensed consolidated balance sheet as of March 31, 2016.

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2016

Business Acquisition [Line Items]

Schedule of Acquisition Related Costs

Acquisition-related costs associated with our business combinations for the years ended for the three months ended, March 31, 2016 and 2015 include the following:

	Three months ended March 31,
	2016		2015
Transaction costs (1)	$	375	$	—
Integration costs	964		—
	$	1,339	$	—
(1) Transaction costs include investment advisory, legal, and accounting fees

Synageva BioPharma Corp.

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition

The aggregate consideration to acquire Synageva consisted of:

Stock consideration	$	4,917,810
Cash consideration	4,565,524
Total purchase price	$	9,483,334

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of assets acquired and liabilities assumed:

Cash	$	626,217
Inventory	23,880
In-process research and development (IPR&D)	4,236,000
Deferred tax liabilities, net	(171,638		)
Other assets and liabilities	(26,373		)
Net assets acquired	4,688,086
Goodwill	4,795,248
Total purchase price	$	9,483,334

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Inventories (Tables)

3 Months Ended

Mar. 31, 2016

Inventory, Net [Abstract]

Schedule of Inventory, Current

The components of inventory are as follows:

	March 31,		December 31,
	2016		2015
Raw materials	$	16,948	$	17,924
Work-in-process	162,979		180,324
Finished goods	114,035		91,626
	$	293,962	$	289,874

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Intangible Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The following table summarizes the carrying amount of our intangible assets and goodwill, net of accumulated amortization:

		March 31, 2016							December 31, 2015
	Estimated Life (years)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Licenses	6-8	$	28,507	$	(28,507	)	$	—	$	28,507	$	(28,504	)	$	3
Patents	7	10,517		(10,517		)	—		10,517		(10,517		)	—
Purchased technology	6-16	4,708,495		(196,678		)	4,511,817		4,708,495		(116,584		)	4,591,911
Acquired IPR&D	Indefinite	116,000		—			116,000		116,000		—			116,000
Total		$	4,863,519	$	(235,702	)	$	4,627,817	$	4,863,519	$	(155,605	)	$	4,707,914
Goodwill	Indefinite	$	5,052,222	$	(2,901	)	$	5,049,321	$	5,050,786	$	(2,901	)	$	5,047,885

Schedule of Goodwill

The following table summarizes the changes in the carrying amount of goodwill:

Balance at December 31, 2015	$	5,047,885
Change in goodwill associated with prior acquisition	1,436
Balance at March 31, 2016	$	5,049,321

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Common Share [Abstract]

Schedule Of Basic And Diluted Earnings Per Share

The following table summarizes the calculation of basic and diluted EPS for the three months endedMarch 31, 2016 and 2015:

	Three months ended
	March 31,
	2016		2015
Net income used for basic and diluted calculation	$	92,166	$	91,323
Shares used in computing earnings per common share—basic	225,060		199,361
Weighted-average effect of dilutive securities:
Stock awards	1,813		2,673
Shares used in computing earnings per common share—diluted	226,873		202,034
Earnings per common share:
Basic	$	0.41	$	0.46
Diluted	$	0.41	$	0.45

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Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of available-for-sale investments by type of security at March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
Commercial paper	$	3,999	$	—	$	—		$	3,999
Corporate bonds	136,009		553		(3		)	136,559
Municipal bonds	50,470		43		(2		)	50,511
Other government-related obligations:
U.S.	13,643		43		(27		)	13,659
Foreign	141,593		244		(19		)	141,818
	$	345,714	$	883	$	(51	)	$	346,546

	December 31, 2015
	Amortized Cost Basis		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
Commercial paper	$	254,396	$	—	$	—		$	254,396
Corporate bonds	133,062		23		(336		)	132,749
Municipal bonds	87,173		1		(63		)	87,111
Other government-related obligations:
U.S.	25,244		—		(94		)	25,150
Foreign	163,403		—		(504		)	162,899
Bank certificates of deposit	27,000		—		—			27,000
	$	690,278	$	24	$	(997	)	$	689,305

Available-for-sale Securities by Balance Sheet Location Classification [Table Text Block]

The fair values of available-for-sale securities by classification in the condensed consolidated balance sheet were as follows:

	March 31, 2016		December 31, 2015
Cash and cash equivalents	$	40,999	$	323,218
Marketable securities	305,547		366,087
	$	346,546	$	689,305

Investments Classified by Contractual Maturity Date [Table Text Block]

The fair values of available-for-sale debt securities at March 31, 2016, by contractual maturity, are summarized as follows:

	March 31, 2016
Due in one year or less	$	140,145
Due after one year through three years	206,401
	$	346,546

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Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities [Abstract]

Schedule of Other Comprehensive Income and Earnings from Foreign Exchange Contracts

The impact on accumulated other comprehensive income (AOCI) and earnings from foreign exchange contracts that qualified as cash flow hedges, for the three months endedMarch 31, 2016 and 2015 were as follows:

	Three months ended
	March 31,
	2016			2015
Gain (loss) recognized in AOCI, net of tax	$	(49,442	)	$	93,809
Gain reclassified from AOCI to net product sales (effective portion), net of tax	$	14,659		$	25,447
Gain reclassified from AOCI to other income and expense (ineffective portion), net of tax	$	—		$	1,075

Schedule of Fair Value of Outstanding Derivatives

The following tables summarize the fair value of outstanding derivatives at March 31, 2016 and December 31, 2015:

	March 31, 2016
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	55,976	Other current liabilities	$	15,870
Foreign exchange forward contracts	Other non-current assets	35,019		Other non-current liabilities	30,740
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	2,594		Other current liabilities	16,186
Total fair value of derivative instruments		$	93,589		$	62,796

	December 31, 2015
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	85,058	Other current liabilities	$	1,491
Foreign exchange forward contracts	Other non-current assets	66,309		Other non-current liabilities	4,773
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	6,687			4,157
Total fair value of derivative instruments		$	158,054		$	10,421

Offsetting Assets and Liabilities [Table Text Block]

The following tables summarize the potential effect on our condensed consolidated balance sheets of offsetting our foreign exchange forward contracts subject to such provisions:

	March 31, 2016
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet			Derivative Financial Instruments			Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	93,589		$	—	$	93,589		$	(27,928	)	$	—	$	65,661
Derivative liabilities	(62,796		)	—		(62,796		)	27,928			—		(34,868		)

	December 31, 2015
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet			Derivative Financial Instruments			Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	158,054		$	—	$	158,054		$	(10,421	)	$	—	$	147,633
Derivative liabilities	(10,421		)	—		(10,421		)	10,421			—		—

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Other Comprehensive Income and Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income

The following tables summarize the changes in AOCI, by component, for the three months endedMarch 31, 2016 and 2015:

	Defined Benefit Pension Plans			Unrealized Gains (Losses) from Marketable Securities			Unrealized Gains (Losses) from Hedging Activities			Foreign Currency Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)
Balances, December 31, 2015	$	(9,589	)	$	(785	)	$	92,670		$	(19,995	)	$	62,301
Other comprehensive income before reclassifications	2,035			1,333			(49,442		)	1,996			(44,078		)
Amounts reclassified from other comprehensive income	86			165			(14,659		)	—			(14,408		)
Net other comprehensive income (loss)	2,121			1,498			(64,101		)	1,996			(58,486		)
Balances, March 31, 2016	$	(7,468	)	$	713		$	28,569		$	(17,999	)	$	3,815

	Defined Benefit Pension Plan			Unrealized Gains (Losses) from Marketable Securities			Unrealized Gains (Losses) From Hedging Activities			Foreign Currency Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)
Balances, December 31, 2014	$	(16,570	)	$	(234	)	$	87,308		$	(13,719	)	$	56,785
Other comprehensive income before reclassifications	(488		)	1,065			93,809			(5,388		)	88,998
Amounts reclassified from other comprehensive income	236			(8		)	(26,522		)	—			(26,294		)
Net other comprehensive income (loss)	(252		)	1,057			67,287			(5,388		)	62,704
Balances, March 31, 2015	$	(16,822	)	$	823		$	154,595		$	(19,107	)	$	119,489

Reclassification out of AOCI

The table below provides details regarding significant reclassifications from AOCI during the three months endedMarch 31, 2016 and 2015:

Details about Accumulated Other Comprehensive Income Components	Amount Reclassified From Accumulated Other Comprehensive Income during the three months ended March 31,						Affected Line Item in the Condensed Consolidated Statements of Operations
	2016			2015
Unrealized Gains (Losses) from Hedging Activity
Effective portion of foreign exchange contracts	$	22,812		$	29,083		Net product sales
Ineffective portion of foreign exchange contracts	—			1,228			Foreign currency gain
	22,812			30,311
	(8,153		)	(3,789		)	Income tax provision
	$	14,659		$	26,522
Unrealized Gains (Losses) from Marketable Securities
Realized (loss) gain on sale of securities	$	(262	)	$	13		Investment income
	(262		)	13
	97			(5		)	Income tax provision
	$	(165	)	$	8
Defined Benefit Pension Plans
Amortization of prior service costs and actuarial losses	$	(114	)	$	(311	)	(a)
	(114		)	(311		)
	28			75			Income tax provision
	$	(86	)	$	(236	)

(a) This AOCI component is included in the computation of net periodic pension benefit cost (see Note 15 for additional details).

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Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Schedule Of Assets And Liabilites Measured At Fair Value

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value.

		Fair Value Measurement at March 31, 2016
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Institutional money market funds	$	82,416	$	—	$	82,416	$	—
Cash equivalents	Commercial paper	$	3,999	$	—	$	3,999	$	—
Cash equivalents	Corporate bonds	$	15,000	$	—	$	15,000	$	—
Cash equivalents	Municipal bonds	$	22,000	$	—	$	22,000	$	—
Marketable securities	Mutual funds	$	11,807	$	11,807	$	—	$	—
Marketable securities	Corporate bonds	$	121,559	$	—	$	121,559	$	—
Marketable securities	Municipal bonds	$	28,511	$	—	$	28,511	$	—
Marketable securities	Other government-related obligations	$	155,477	$	—	$	155,477	$	—
Other current assets	Foreign exchange forward contracts	$	58,570	$	—	$	58,570	$	—
Other assets	Foreign exchange forward contracts	$	35,019	$	—	$	35,019	$	—
Other current liabilities	Foreign exchange forward contracts	$	32,056	$	—	$	32,056	$	—
Other liabilities	Foreign exchange forward contracts	$	30,740	$	—	$	30,740	$	—
Other current liabilities	Acquisition-related contingent consideration	$	55,343	$	—	$	—	$	55,343
Contingent consideration	Acquisition-related contingent consideration	$	107,085	$	—	$	—	$	107,085

		Fair Value Measurement at December 31, 2015
Balance Sheet Classification	Type of Instrument	Total		Level 1		Level 2		Level 3
Cash equivalents	Institutional money market funds	$	179,898	$	—	$	179,898	$	—
Cash equivalents	Commercial paper	$	192,418	$	—	$	192,418	$	—
Cash equivalents	Corporate bonds	$	12,250	$	—	$	12,250	$	—
Cash equivalents	Municipal bonds	$	60,001	$	—	$	60,001	$	—
Cash equivalents	Other government-related obligations	$	31,549	$	—	$	31,549	$	—
Cash equivalents	Bank certificates of deposit	$	27,000	$	—	$	27,000	$	—
Marketable securities	Mutual funds	$	8,817	$	8,817	$	—	$	—
Marketable securities	Commercial paper	$	61,978	$	—	$	61,978	$	—
Marketable securities	Corporate bonds	$	120,499	$	—	$	120,499	$	—
Marketable securities	Municipal bonds	$	27,110	$	—	$	27,110	$	—
Marketable securities	Other government-related obligations	$	156,500	$	—	$	156,500	$	—
Other current assets	Foreign exchange forward contracts	$	91,745	$	—	$	91,745	$	—
Other assets	Foreign exchange forward contracts	$	66,309	$	—	$	66,309	$	—
Other current liabilities	Foreign exchange forward contracts	$	5,648	$	—	$	5,648	$	—
Other liabilities	Foreign exchange forward contracts	$	4,773	$	—	$	4,773	$	—
Other current liabilities	Acquisition-related contingent consideration	$	55,804	$	—	$	—	$	55,804
Contingent consideration	Acquisition-related contingent consideration	$	121,424	$	—	$	—	$	121,424

Schedule Of Acquisition-Related Contingent Consideration

The following table represents a roll-forward of our acquisition-related contingent consideration:

Balance at December 31, 2015	$	(177,228	)
Change in fair value	14,800
Balance at March 31, 2016	$	(162,428	)

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of Income Tax Provision and Effective Tax Rate

The following table provides a comparative summary of our income tax provision and effective tax rate for the three months endedMarch 31, 2016 and 2015:

	Three months ended
	March 31,
	2016			2015
Provision for income taxes	$	51,432		$	15,622
Effective tax rate	35.8		%	14.6		%

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of Components of Net Periodic Benefit Costs

The components of net periodic benefit cost are as follows:

	Three months ended
	March 31,
	2016			2015
Service cost	$	2,023		$	2,421
Interest cost	60			180
Expected return on plan assets	(163		)	(243		)
Employee contributions	(352		)	(427		)
Amortization	114			311
Total net periodic benefit cost	$	1,682		$	2,242

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Restructuring (Tables)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

	Employee Separation Costs			Contract Termination Costs			Other Costs			Total
Liability, beginning of period	$	6,390		$	682		$	169		$	7,241
Restructuring expenses	—			35			417			452
Cash settlements	(3,806		)	(508		)	(570		)	(4,884		)
Adjustments to previous estimates	(1,148		)	1,418			—			270
Liability, end of period	$	1,436		$	1,627		$	16		$	3,079

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Basis of Presentation and Principles Of Consolidation - Narrative (Details) - New Accounting Pronouncement, Early Adoption, Effect $ in Thousands	Dec. 31, 2015 USD ($)
Other Current Assets
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred finance costs	$ 8,635
Other Noncurrent Assets
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred finance costs	26,714
Long-term Debt, Current Maturities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred finance costs	8,635
Long-term Debt, Excluding Current Maturities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred finance costs	$ 26,714

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Acquisitions - Narrative (Details) - Synageva BioPharma Corp. - USD ($)	Jun. 22, 2015	May. 06, 2015	May. 05, 2015
Business Acquisition [Line Items]
Cash consideration	$ 4,565,524,000
Number of shares (shares)	26,125,000
Consideration transferred, net of cash acquired	$ 8,860,000,000
Share price (dollars per share)	$ 188.24
Inventory	$ 23,880,000
Intangible assets	$ 4,236,000,000
Weighted average cost of capital (percent)	10.00%
Deferred tax liabilities, net	$ 171,638,000
Deferred tax liabilities, net	602,887,000
Deferred tax assets, net	$ 431,249,000
Scenario, Previously Reported
Business Acquisition [Line Items]
Cash consideration		$ 115
Number of shares (shares)		0.6581
Consideration transferred, net of cash acquired		$ 8,400,000,000
Share price (dollars per share)			$ 168.55

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Acquisitions - Reconciliation of Upfront Payments to Total Purchase Price (Details) - Synageva BioPharma Corp. $ in Thousands	Jun. 22, 2015 USD ($)
Business Acquisition [Line Items]
Stock consideration	$ 4,917,810
Cash consideration	4,565,524
Total purchase price	$ 9,483,334

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Acquisitions - Summary of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Jun. 22, 2015
Business Acquisition [Line Items]
Goodwill	$ 5,049,321	$ 5,047,885
Synageva BioPharma Corp.
Business Acquisition [Line Items]
Cash			$ 626,217
Inventory			23,880
In-process research and development (IPR&D)			4,236,000
Deferred tax liabilities, net			(171,638)
Other assets and liabilities			(26,373)
Net assets acquired			4,688,086
Goodwill			4,795,248
Total purchase price			$ 9,483,334

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Acquisitions - Acquisition Related Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Business Combinations [Abstract]
Transaction costs	$ 375	$ 0
Integration costs	964	0
Total transaction and integration costs	$ 1,339	$ 0

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Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Inventory, Raw Materials	$ 16,948	$ 17,924
Inventory, Work in Process	162,979	180,324
Inventory, Finished Goods	114,035	91,626
Inventory, Net	$ 293,962	$ 289,874

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Intangible Assets and Goodwill (Schedule of Intangible Assets and Goodwill) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Cost	$ 4,863,519	$ 4,863,519
Intangible Assets, Accumulated Amortization	(235,702)	(155,605)
Intangible Assets, Net	4,627,817	4,707,914
Goodwill, Gross	5,052,222	5,050,786
Goodwill, Accumulated Amortization	(2,901)	(2,901)
Goodwill, Net	5,049,321	5,047,885
Licenses
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	28,507	28,507
Finite-Lived Intangible Assets, Accumulated Amortization	(28,507)	(28,504)
Finite-Lived Intangible Assets, Net	$ 0	3
Licenses | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life (years)	6 years
Licenses | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life (years)	8 years
Patents
Finite-Lived Intangible Assets [Line Items]
Estimated Life (years)	7 years
Finite-Lived Intangible Assets, Gross	$ 10,517	10,517
Finite-Lived Intangible Assets, Accumulated Amortization	(10,517)	(10,517)
Finite-Lived Intangible Assets, Net	0	0
Purchased technology
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	4,708,495	4,708,495
Finite-Lived Intangible Assets, Accumulated Amortization	(196,678)	(116,584)
Finite-Lived Intangible Assets, Net	$ 4,511,817	4,591,911
Purchased technology | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life (years)	6 years
Purchased technology | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life (years)	16 years
Acquired IPR&D
Finite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Asset, Cost	$ 116,000	116,000
Indefinite-Lived Intangible Assets, Accumulated Amortization	$ 0	$ 0

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Intangible Assets and Goodwill (Schedule of Goodwill) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 5,047,885
Change in goodwill associated with prior acquisition	1,436
Goodwill, ending balance	$ 5,049,321

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Intangible Assets and Goodwill (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 80,097	$ 11
Finite-lived intangible assets, 2016	240,106
Finite-lived intangible assets, 2017	320,142
Finite-lived intangible assets, 2018	320,142
Finite-lived intangible assets, 2019	320,142
Finite-lived intangible assets, 2020	320,142
Finite-lived intangible assets, 2021	$ 320,142

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Debt (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Jun. 22, 2015
Debt Instrument [Line Items]
Repayments of Debt	$ 175,000
Amortization of Financing Costs	2,513
Credit Agreement [Member]
Debt Instrument [Line Items]
Payments of Financing Costs		$ 45,492
Senior Secured Term Loan [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, principal amount			$ 3,500,000
Debt Instrument, Quarterly Payment, Percentage of Total Borrowings			1.25%
Outstanding debt	3,281,250
Line of Credit [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 500,000
Letters of credit, amount outstanding	12,970
Line of credit facility, borrowing availability	$ 487,030
Letter of Credit [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Sublimit for letter of credit for working capital requirements and other general corporate purposes			100,000
Bridge Loan [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Sublimit for letter of credit for working capital requirements and other general corporate purposes			$ 25,000

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Earnings Per Common Share (Summary Of Calculation Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Common Share [Abstract]
Net income used for basic and diluted calculation	$ 92,166	$ 91,323
Shares used in computing earnings per common share—basic	225,060	199,361
Stock awards	1,813	2,673
Shares used in computing earnings per common share-diluted	226,873	202,034
Earnings Per Share, Basic	$ 0.41	$ 0.46
Earnings Per Share, Diluted	$ 0.41	$ 0.45

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Earnings Per Common Share (Dilutive Shares Excluded From Calculatin Of Earnings Per Share) (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Common Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,975	2,248

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Marketable Securities (Summary of Available-for-Sale Securities Held) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis	$ 345,714	$ 690,278
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI	883	24
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI	51	997
Available-for-sale Securities, Debt Securities	346,546	689,305
Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis	3,999	254,396
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI	0	0
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI	0	0
Available-for-sale Securities, Debt Securities	3,999	254,396
Corporate Bond Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis	136,009	133,062
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI	553	23
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI	3	336
Available-for-sale Securities, Debt Securities	136,559	132,749
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis	50,470	87,173
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI	43	1
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI	2	63
Available-for-sale Securities, Debt Securities	50,511	87,111
US Government Agencies Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis	13,643	25,244
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI	43	0
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI	27	94
Available-for-sale Securities, Debt Securities	13,659	25,150
Foreign Government Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis	141,593	163,403
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI	244	0
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI	19	504
Available-for-sale Securities, Debt Securities	$ 141,818	162,899
Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis		27,000
Available-For-Sale Debt Securities Gross Unrealized Gain, Accumulated In AOCI		0
Available-For-Sale Debt Securities Gross Unrealized Loss, Accumulated In AOCI		0
Available-for-sale Securities, Debt Securities		$ 27,000

XML

Marketable Securities Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 62,496	$ 293,947
Trading Securities	$ 11,807	$ 8,817

XML

Marketable Securities (Available-for-Sale Securities by Classification in Balance Sheet) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Securities	$ 346,546	$ 689,305
Cash and Cash Equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Securities	40,999	323,218
Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Securities	$ 305,547	$ 366,087

XML

Marketable Securities (Available-for-Sale Debt Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Fair Value	$ 140,145
Available-for-sale Securities, Debt Maturities, Year Two Through Three, Fair Value	206,401
Available-for-sale Securities, Debt Securities	$ 346,546	$ 689,305

XML

Derivative Instruments and Hedging Activities (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Foreign Exchange Forward Contracts Term	60 months
Amount of gain (loss) to be reclassified from AOCI	$ 39,730,000
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Foreign Exchange Forward Contracts Term	90 days
Gain in other income and expense	$ (12,969,000)	$ 6,423,000
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member]
Derivative [Line Items]
Notional Amount of Foreign Currency Derivatives	2,088,952,000
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Fair Value, Net Asset (Liability)			$ 0
Notional Amount of Foreign Currency Derivatives	$ 307,585,000

XML

Derivative Instruments and Hedging Activities (Schedule Of Other Comprehensive Income And Earnings From Foreign Exchange Contracts) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments and Hedging Activities [Abstract]
Gain (loss) recognized in AOCI, net of tax	$ (49,442)	$ 93,809
Gain reclassified from AOCI to net product sales (effective portion), net of tax	14,659	25,447
Gain reclassified from AOCI to other income and expense (ineffective portion), net of tax	$ 0	$ 1,075

XML

Derivative Instruments and Hedging Activities (Schedule Of Fair Value Of Outstanding Derivatives) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Foreign Exchange Forward [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	$ 93,589	$ 158,054
Liability Derivatives, Fair Value	62,796	10,421
Foreign Exchange Forward [Member] | Other Current Assets | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	55,976	85,058
Foreign Exchange Forward [Member] | Other Current Liabilities [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	15,870	1,491
Foreign Exchange Forward [Member] | Other Noncurrent Assets | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	35,019	66,309
Foreign Exchange Forward [Member] | Other Non Current Liabilities [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	30,740	4,773
Foreign Exchange Forward [Member] | Other Current Assets | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	2,594	6,687
Foreign Exchange Forward [Member] | Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	$ 16,186	$ 4,157

XML

Derivative Instruments and Hedging Activities (Schedule of Offsetting Assets and LIabilities) (Details) - Foreign Exchange Forward [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Offsetting Assets and Liabilities [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 93,589	$ 158,054
Derivative Asset, Fair Value, Gross Liability	0	0
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	93,589	158,054
Derivative, Collateral, Obligation to Return Securities	(27,928)	(10,421)
Derivative, Collateral, Obligation to Return Cash	0	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	65,661	147,633
Derivative Liability, Fair Value, Gross Liability	(62,796)	(10,421)
Derivative Liability, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	62,796	10,421
Derivative, Collateral, Right to Reclaim Securities	27,928	10,421
Derivative, Collateral, Right to Reclaim Cash	0	0
Derivative Liability, Fair Value, Amount Offset Against Collateral	$ 34,868	$ 0

XML

Other Investments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Moderna LLC [Member]
Investment [Line Items]
Investment owned, at cost	$ 37,500

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Stockholders' Equity (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 29, 2016	Mar. 31, 2016	Mar. 31, 2015	May. 06, 2015
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired		2,083,000	334,000
Treasury Stock, Value, Acquired, Cost Method		$ 296,515	$ 60,026
Subsequent Event [Member]
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired	245,000
Treasury Stock, Value, Acquired, Cost Method	$ 34,136
Common Stock [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount				$ 1,000,000
Common Stock [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Total remaining amount for repurchases under program	$ 425,213

XML

Other Comprehensive Income and Accumulated Other Comprehensive Income (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 62,301	$ 56,785
Other comprehensive income before reclassifications	(44,078)	88,998
Amounts reclassified from other comprehensive income	(14,408)	(26,294)
Net other comprehensive income (loss)	(58,486)	62,704
Ending balance	3,815	119,489
Defined Benefit Pension Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(9,589)	(16,570)
Other comprehensive income before reclassifications	2,035	(488)
Amounts reclassified from other comprehensive income	86	236
Net other comprehensive income (loss)	2,121	(252)
Ending balance	(7,468)	(16,822)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(785)	(234)
Other comprehensive income before reclassifications	1,333	1,065
Amounts reclassified from other comprehensive income	165	(8)
Net other comprehensive income (loss)	1,498	1,057
Ending balance	713	823
Net Unrealized Gain (Loss) From Hedging Activities [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	92,670	87,308
Other comprehensive income before reclassifications	(49,442)	93,809
Amounts reclassified from other comprehensive income	(14,659)	(26,522)
Net other comprehensive income (loss)	(64,101)	67,287
Ending balance	28,569	154,595
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(19,995)	(13,719)
Other comprehensive income before reclassifications	1,996	(5,388)
Amounts reclassified from other comprehensive income	0	0
Net other comprehensive income (loss)	1,996	(5,388)
Ending balance	$ (17,999)	$ (19,107)

XML

Other Comprehensive Income and Accumulated Other Comprehensive Income (Significant Reclassifications from AOCI) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net product sales		$ 700,425	$ 600,333
Foreign currency gain		91	1,005
Investment income		1,551	2,884
Income before income taxes		143,598	106,945
Income tax provision		(51,432)	(15,622)
Net income		92,166	91,323
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Unrealized Gain (Loss) From Hedging Activities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net product sales		22,812	29,083
Foreign currency gain		0	1,228
Income before income taxes		22,812	30,311
Income tax provision		(8,153)	(3,789)
Net income		14,659	26,522
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment income		(262)	13
Income before income taxes		(262)	13
Income tax provision		97	(5)
Net income		(165)	8
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Pension Plan [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of prior service costs and actuarial losses	[1]	(114)	(311)
Income before income taxes		(114)	(311)
Income tax provision		28	75
Net income		$ (86)	$ (236)

[1] (a) This AOCI component is included in the computation of net periodic pension benefit cost (see Note 15 for additional details).

XML

Fair Value Measurement (Schedule Of Assets And Liabilites Measured At Fair Value) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ 107,085	$ 121,424
Money Market Funds [Member] | Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	82,416	179,898
Money Market Funds [Member] | Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Money Market Funds [Member] | Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	82,416	179,898
Money Market Funds [Member] | Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Commercial Paper [Member] | Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	3,999	192,418
Commercial Paper [Member] | Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Commercial Paper [Member] | Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	3,999	192,418
Commercial Paper [Member] | Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Commercial Paper [Member] | Marketable Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure		61,978
Commercial Paper [Member] | Marketable Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure		0
Commercial Paper [Member] | Marketable Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure		61,978
Commercial Paper [Member] | Marketable Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure		0
Corporate Bond Securities [Member] | Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	15,000	12,250
Corporate Bond Securities [Member] | Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Corporate Bond Securities [Member] | Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	15,000	12,250
Corporate Bond Securities [Member] | Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Corporate Bond Securities [Member] | Marketable Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	121,559	120,499
Corporate Bond Securities [Member] | Marketable Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Corporate Bond Securities [Member] | Marketable Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	121,559	120,499
Corporate Bond Securities [Member] | Marketable Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Mutual Funds [Member] | Marketable Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	11,807	8,817
Mutual Funds [Member] | Marketable Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	11,807	8,817
Mutual Funds [Member] | Marketable Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Mutual Funds [Member] | Marketable Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Municipal Bonds [Member] | Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	22,000	60,001
Municipal Bonds [Member] | Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Municipal Bonds [Member] | Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	22,000	60,001
Municipal Bonds [Member] | Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Municipal Bonds [Member] | Marketable Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	28,511	27,110
Municipal Bonds [Member] | Marketable Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Municipal Bonds [Member] | Marketable Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	28,511	27,110
Municipal Bonds [Member] | Marketable Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Other Government Obligations [Member] | Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		31,549
Other Government Obligations [Member] | Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		0
Other Government Obligations [Member] | Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		31,549
Other Government Obligations [Member] | Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		0
Other Government Obligations [Member] | Marketable Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	155,477	156,500
Other Government Obligations [Member] | Marketable Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Other Government Obligations [Member] | Marketable Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	155,477	156,500
Other Government Obligations [Member] | Marketable Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	0	0
Certificates of Deposit [Member] | Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		27,000
Certificates of Deposit [Member] | Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		0
Certificates of Deposit [Member] | Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		27,000
Certificates of Deposit [Member] | Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		0
Foreign Exchange Forward [Member] | Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	58,570	91,745
Foreign Exchange Forward [Member] | Other Current Assets | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	0	0
Foreign Exchange Forward [Member] | Other Current Assets | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	58,570	91,745
Foreign Exchange Forward [Member] | Other Current Assets | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	0	0
Foreign Exchange Forward [Member] | Other Noncurrent Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	35,019	66,309
Foreign Exchange Forward [Member] | Other Noncurrent Assets | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	0	0
Foreign Exchange Forward [Member] | Other Noncurrent Assets | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	35,019	66,309
Foreign Exchange Forward [Member] | Other Noncurrent Assets | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, asset	0	0
Foreign Exchange Forward [Member] | Other Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	32,056	5,648
Foreign Exchange Forward [Member] | Other Current Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	0	0
Foreign Exchange Forward [Member] | Other Current Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	32,056	5,648
Foreign Exchange Forward [Member] | Other Current Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	0	0
Foreign Exchange Forward [Member] | Other Non Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	30,740	4,773
Foreign Exchange Forward [Member] | Other Non Current Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	0	0
Foreign Exchange Forward [Member] | Other Non Current Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	30,740	4,773
Foreign Exchange Forward [Member] | Other Non Current Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign exchange forward contracts, liability	0	0
Acquisition Related Contingent Consideration [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	162,428
Acquisition Related Contingent Consideration [Member] | Other Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	55,343	55,804
Acquisition Related Contingent Consideration [Member] | Other Current Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0	0
Acquisition Related Contingent Consideration [Member] | Other Current Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0	0
Acquisition Related Contingent Consideration [Member] | Other Current Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	55,343	55,804
Acquisition Related Contingent Consideration [Member] | Contingent Consideration [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	107,085	121,424
Acquisition Related Contingent Consideration [Member] | Contingent Consideration [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0	0
Acquisition Related Contingent Consideration [Member] | Contingent Consideration [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0	0
Acquisition Related Contingent Consideration [Member] | Contingent Consideration [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ 107,085	$ 121,424

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Fair Value Measurement (Schedule Of Acquisition-Related Contingent Consideration) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low	$ 0
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	826,000
Contingent consideration	107,085	$ 121,424
Acquisition Related Contingent Consideration [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration	$ 162,428
Acquisition Related Contingent Consideration [Member] | Level 3 [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Cost of debt	5.50%
Acquisition-Related Contingent Consideration [Roll Forward]
Balance at beginning of period	$ (177,228)
Change in fair value	(14,800)
Balance at end of period	$ (162,428)
Acquisition Related Contingent Consideration [Member] | Minimum | Level 3 [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Weighted average cost of capital	10.00%
Acquisition Related Contingent Consideration [Member] | Maximum | Level 3 [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Weighted average cost of capital	21.00%

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Income Taxes (Schedule of Income Tax Provision and Effective Tax Rate) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax provision	$ 51,432	$ 15,622
Effective tax rate (percent)	35.80%	14.60%

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Contingency [Line Items]
Effective income tax rate reconciliation, distribution of earnings from foreign partnership (percent)	19.00%
Income tax expense	$ 51,432	$ 15,622
Effective tax rate (percent)	35.80%	14.60%
Correction of Provision | Understatement of Income Tax Expense
Income Tax Contingency [Line Items]
Income tax expense	$ 8,955

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Defined Benefit Plans (Schedule of Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Compensation and Retirement Disclosure [Abstract]
Service cost	$ 2,023	$ 2,421
Interest cost	60	180
Expected return on plan assets	(163)	(243)
Employee contributions	(352)	(427)
Amortization	114	311
Total net periodic benefit cost	$ 1,682	$ 2,242

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Facility Lease Obligations (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Nov. 30, 2012	Mar. 31, 2016	Dec. 31, 2015
Operating Leased Assets [Line Items]
Facility lease obligation		$ 172,970	$ 151,307
CONNECTICUT | Facility Lease Obligation
Operating Leased Assets [Line Items]
Facility lease obligation		134,211	132,866
Minimum | CONNECTICUT | Construction in Progress
Operating Leased Assets [Line Items]
Renewal term (years)	10 years
Lonza Group AG
Operating Leased Assets [Line Items]
Unrecorded unconditional purchase obligation, purchases		23,000
Lonza Group AG | Facility Lease Obligation
Operating Leased Assets [Line Items]
Facility lease obligation		$ 35,632	15,229
Facility lease obligation, payment period (years)		10 years
Lonza Group AG | Construction in Progress
Operating Leased Assets [Line Items]
Property, plant and equipment, gross		$ 42,652	$ 19,259
Inventories | Lonza Group AG
Operating Leased Assets [Line Items]
Unrecorded unconditional purchase obligation, purchases		20,010
Facility Lease Obligation | Lonza Group AG
Operating Leased Assets [Line Items]
Unrecorded unconditional purchase obligation, purchases		$ 2,990

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Commitments and Contingencies (Narrative) (Details) $ in Thousands	Mar. 31, 2016 USD ($)
Commitments and Contingencies [Line Items]
Other Commitment, Potential Payment	$ 35,035
Lonza Agreement [Member]
Commitments and Contingencies [Line Items]
Remaining total commitments with Lonza	$ 1,134,661

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Restructuring (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring expenses	$ 452
Restructuring Reserve	3,079	$ 7,241
Employee Separation Costs
Restructuring Cost and Reserve [Line Items]
Restructuring expenses	0
Restructuring Reserve	1,436	$ 6,390
Synageva BioPharma Corp.
Restructuring Cost and Reserve [Line Items]
Restructuring expenses	(924)
Relocation of European Headquarters [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve, additional restructuring costs	$ 1,646

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Restructuring Reserve Roll Forward (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 7,241
Restructuring expenses	452
Cash settlements	(4,884)
Adjustments to previous estimates	270
Ending Balance	3,079
Employee Separation Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	6,390
Restructuring expenses	0
Cash settlements	(3,806)
Adjustments to previous estimates	(1,148)
Ending Balance	1,436
Contract Termination Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	682
Restructuring expenses	35
Cash settlements	(508)
Adjustments to previous estimates	1,418
Ending Balance	1,627
Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	169
Restructuring expenses	417
Cash settlements	(570)
Adjustments to previous estimates	0
Ending Balance	$ 16