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, 2008
Or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from            to              .

Commission File No. 000-24537

DYAX CORP.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	04-3053198
(State of Incorporation)	(I.R.S. Employer Identification Number)
300 TECHNOLOGY SQUARE, CAMBRIDGE, MA 02139
(Address of Principal Executive Offices)
(617) 225-2500
(Registrant’s Telephone Number, including Area Code)

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      xNO      o

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 definitions of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES      oNO      x

Number of shares outstanding of Dyax Corp.’s Common Stock, par value $0.01, as of April 29, 2008: 60,570,286

DYAX CORP.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	3
Item 1	Financial Statements	3
	Consolidated Balance Sheets (Unaudited) as of March 31, 2008 and December 31, 2007	3
	Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the three months ended March 31, 2008 and 2007	4
	Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2008 and 2007	5
	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4	Controls and Procedures	22
PART II	OTHER INFORMATION
Item 6	Exhibits	24
Signature		25
Exhibit Index		26

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PART I – FINANCIAL INFORMATION

Item 1 – FINANCIAL STATEMENTS

Dyax Corp. and Subsidiaries

Consolidated Balance Sheets (Unaudited)

	March 31,  2008			December 31,  2007
	(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	27,686		$	29,356
Short-term investments	28,155			34,055
Accounts receivable, net of allowances for doubtful accounts of $189 at March 31, 2008 and $55 at December 31, 2007	1,535			4,118
Prepaid research and development	1,269			1,271
Other current assets	1,709			1,292
Total current assets	60,354			70,092
Fixed assets, net	8,168			7,884
Intangibles, net	805			931
Restricted cash	2,907			4,483
Long-term investments	6,214			—
Other assets	219			225
Total assets	$	78,667		$	83,615
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	9,429		$	10,537
Current portion of deferred revenue	20,079			3,832
Current portion of long-term obligations	1,347			1,482
Other current liabilities	1,252			1,126
Total current liabilities	32,107			16,977
Deferred revenue	7,525			5,675
Long-term obligations	28,342			30,016
Deferred rent	1,156			1,257
Other long-term liabilities	193			194
Total liabilities	69,323			54,119
Commitments and Contingencies (Note 6, 8 and 9)
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized at March 31, 2008 and December 31, 2007; 0 shares issued and outstanding at March 31, 2008 and December 31, 2007	—			—
Common stock, $0.01 par value; 125,000,000 shares authorized at March 31, 2008 and December 31, 2007; 60,522,258 and 60,427,178 shares issued and outstanding at March 31, 2008 and December 31, 2007, respectively	605			604
Additional paid-in capital	318,512			317,296
Accumulated deficit	(310,267		)	(288,932		)
Accumulated other comprehensive income	494			528
Total stockholders’ equity	9,344			29,496
Total liabilities and stockholders’ equity	$	78,667		$	83,615

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Dyax Corp. and Subsidiaries Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

	Three Months Ended March 31,
	2008			2007
	(In thousands, except share and per share data)
Product development and license fee revenues	$	2,643		$	2,630
Research and development:
Research and development expenses	17,147			20,314
Less research and development expenses reimbursed by joint venture (Dyax-Genzyme LLC)	—			(7,000		)
Net research and development expenses	17,147			13,314
Equity loss in joint venture (Dyax-Genzyme LLC)	—			3,831
General and administrative expenses	5,520			4,088
Total operating expenses	22,667			21,233
Loss from operations	(20,024		)	(18,603		)
Other income (expense):
Interest income	554			835
Interest expense	(1,865		)	(2,249		)
Total other expense, net	(1,311		)	(1,414		)
Net loss	(21,335		)	(20,017		)
Other comprehensive loss:
Foreign currency translation adjustments	(92		)	(15		)
Unrealized gain (loss) on investments	58			(8		)
Comprehensive loss	$	(21,369	)	$	(20,040	)
Basic and diluted net loss per share	$	(0.35	)	$	(0.44	)
Shares used in computing basic and diluted net loss per share	60,504,620			45,523,025

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Dyax Corp. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
	2008			2007
	(In thousands)
Cash flows from operating activities:
Net loss	$	(21,335	)	$	(20,017	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of purchased premium/discount	(62		)	(326		)
Depreciation and amortization of fixed assets	743			906
Amortization of intangibles	132			131
Amortization of deferred rent	(101		)	(73		)
Interest expense on Paul Royalty agreement	1,761			1,949
Compensation expense associated with stock-based compensation plans	950			605
Equity loss in joint venture (Dyax-Genzyme LLC)	—			3,831
Provision for doubtful accounts	134			—
Other	—			285
Changes in operating assets and liabilities:
Accounts receivable	2,449			1,145
Due from joint venture (Dyax-Genzyme LLC)	—			1,428
Prepaid research and development, and other assets	(399		)	(910		)
Accounts payable and accrued expenses	(1,173		)	1,371
Due to joint venture (Dyax-Genzyme LLC)	—			(967		)
Deferred revenue	18,097			(396		)
Other long-term liabilities	126			12
Net cash provided by (used in) operating activities	1,322			(11,026		)
Cash flows from investing activities:
Purchase of fixed assets	(947		)	(487		)
Purchase of investments	(15,194		)	(6,902		)
Proceeds from maturity of investments	14,999			28,500
Cash received in purchase of joint venture (Dyax-Genzyme LLC)	—			17,000
Restricted cash	1,577			(23		)
Investment in joint venture (Dyax-Genzyme LLC)	—			(3,837		)
Net cash provided by investing activities	435			34,251
Cash flows from financing activities:
Proceeds from the issuance of common stock under employee stock purchase plan and exercise of stock options	267			232
Repayment of long-term obligations	(3,631		)	(1,731		)
Net cash used in financing activities	(3,364		)	(1,499		)
Effect of foreign currency translation on cash balances	(63		)	(10		)
Net increase (decrease) in cash and cash equivalents	(1,670		)	21,716
Cash and cash equivalents at beginning of the period	29,356			11,295
Cash and cash equivalents at end of the period	$	27,686		$	33,011
Supplemental disclosure of non-cash investing and financing activities:
Acquisition of property and equipment under long-term obligations	$	33		$	385
Shares issued to purchase joint venture assets (Dyax-Genzyme LLC)	$	—		$	17,442

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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DYAX CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF BUSINESS AND BASIS OF PRESENTATION

Dyax Corp. (Dyax or the Company) is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel biotherapeutics for unmet medical needs, with an emphasis on oncology and inflammatory indications.  Dyax uses its proprietary drug discovery technology, known as phage display, to identify antibody, small protein and peptide compounds for clinical development. This phage display technology fuels Dyax’s internal pipeline of promising drug candidates and attracts numerous licensees and collaborators, with the potential to generate important revenues in the future.

Dyax’s lead product candidate, DX-88 (ecallantide), is a recombinant small protein currently in late stage clinical trials for its therapeutic potential in two separate indications. Dyax has completed three Phase 2 trials and one Phase 3 trial of DX-88 for the treatment of hereditary angioedema (HAE).  A second Phase 3 trial, known as EDEMA4, is currently being conducted under a Special Protocol Assessment (SPA). DX-88 has orphan drug designation in the United States and European Union, as well as Fast Track designation in the United States for the treatment of acute attacks of HAE.

Additionally, DX-88 is in clinical development for the prevention of blood loss during cardiothoracic surgery (CTS).  Dyax completed a Phase 1/2 trial of DX-88 for the prevention of blood loss during on-pump coronary artery bypass graft (CABG) procedures.  A Phase 2 trial, known as Kalahari 1, is currently ongoing for further development of DX-88 in on-pump CTS, including CABG and heart valve replacement or repair procedures.  On April 23, 2008, Dyax entered into an exclusive license and collaboration agreement with Cubist Pharmaceuticals, Inc. (“Cubist”), for the development and commercialization of the intravenous formulation of DX-88 for the prevention of blood loss during surgery in North America and Europe.  Under this Agreement, Cubist has assumed responsibility for the completion of the ongoing Phase 2 trial as well as all further development costs associated with DX-88 in the licensed indications in the Cubist territory.

Other than the rights licensed to Cubist, Dyax retains all rights to DX-88, including its HAE program, as well as for the manufacturing of DX-88. Dyax also plans to develop DX-88 in other angioedemas.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, risks of preclinical and clinical trials, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with the Food & Drug Administration (FDA) and other governmental regulations and approval requirements.

The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Quarterly Report on Form 10-Q. The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the dates of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.  The results of operations for the three months ended March 31, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.

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It is management’s opinion that the accompanying unaudited interim consolidated financial statements reflect all adjustments (which are normal and recurring) necessary for a fair statement of the results for the interim periods. The financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. The accompanying December 31, 2007 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

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2. STOCK-BASED COMPENSATION

Equity Incentive Plan

The Company’s 1995 Equity Incentive Plan as amended to date (the “Plan”) is an equity plan that is intended to attract and retain employees, provide an incentive for them to assist the Company to achieve long-range performance goals and enable them to participate in the long-term growth of the Company.  The Plan provides that equity awards, including awards of restricted stock and incentive and nonqualified stock options to purchase shares of common stock, may be granted to employees, directors and consultants of the Company by action of the Compensation Committee of the Board of Directors.  The Plan provides that options may only be granted at the current fair market value on the date of grant. The Compensation Committee generally grants options that vest ratably over a 48 month period, and expire within ten years from date of grant unless terminated earlier by death, retirement or other termination.  At March 31, 2008, a total of 2,214,853 shares were reserved and available for the issuance under the Plan.

Employee Stock Purchase Plan

The Company’s 1998 Employee Stock Purchase Plan as amended to date (the “Purchase Plan”) allows employees to purchase shares of the Company’s common stock at a discount from fair market value.  Under this plan, eligible employees may purchase shares during six-month offering periods commencing on January 1 and July 1 of each year at a price per share of 85% of the lower of the fair market value price per share on the first or last day of each six-month offering period. Participating employees may elect to have up to 10% of their base pay withheld and applied toward the purchase of such shares. The rights of participating employees under this plan terminate upon voluntary withdrawal from the plan at any time or upon termination of employment. There were 49,971 shares purchased under the employee stock purchase plan during each of the three months ended March 31, 2008 and 2007.  At March 31, 2008, a total of 213,921 shares were reserved and available for issuance under this plan.

Compensation Expense

The following table reflects stock compensation expense recorded during the three months ended March 31, 2008 and 2007 in accordance with Statement of Financial Accounting Standards No. 123 (Revised 2004) “Share-Based Payments” (SFAS 123R):

	Three Months Ended March 31,
	2008			2007
	(In thousands)
Compensation expense related to:
Equity incentive plan	$	926		$	578
Employee stock purchase plan	24			27
	$		950	$	605
Amount included in research and development expenses in the consolidated statements of operations and comprehensive loss	$	546		$	334
Amount included in general and administrative expenses in the consolidated statements of operations and comprehensive loss	$	404		$	271

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3. INVESTMENTS

The Company considers its investment portfolio of short-term and long-term investments available-for-sale as defined in SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

As of March 31, 2008, the Company’s short-term investments consisted of U.S. Treasury notes and bills with an amortized cost of $28.0 million, and an estimated fair value of $28.2 million, and had an unrealized gain of $144,000.  All short-term investments mature in one year or less.  As of March 31, 2008, the Company’s long-term investments consisted of U.S. Treasury notes and bills with an amortized cost and estimated fair value of $6.2 million, and had an unrealized gain of $21,000.  As of December 31, 2007, the Company’s short-term investments consisted of U.S. Treasury notes and bills with an amortized cost of $33.9 million and an estimated fair value of $34.1 million, and had an unrealized gain of $107,000, which is recorded in other comprehensive income on the accompanying consolidated balance sheets.  As of December 31, 2007, the Company had no long-term investments.

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

	March 31, 2008		December 31, 2007
	(In thousands)
Accounts payable	$	1,849	$	3,288
Accrued employee compensation and related taxes	3,000		3,892
Accrued external research and development and contract manufacturing	1,467		1,815
Accrued legal expenses	570		348
Other accrued liabilities	2,543		1,194
	$	9,429	$	10,537

5. FAIR VALUE MEASUREMENTS

Effective January 1, 2008, the Company implemented Statement of Financial Accounting Standard No. 157, “Fair Value Measurement” (SFAS 157), for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.  In accordance with the provisions of FSP No. FAS 157-2, Effective Date of FASB Statement No. 157, the Company elected to defer implementation of SFAS 157 as it relates to its non-financial assets and non-financial liabilities that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis until January 1, 2009. The Company is evaluating the impact, if any, this Standard will have on its non-financial assets and liabilities.

The adoption of SFAS 157 with respect to financial assets and liabilities and non-financial assets and liabilities that are re-measured and reported at fair value at least annually did not have an impact on the financial results of the Company in the first quarter of 2008.  The Company will continue to evaluate the impact, if any, that the implementation of this standard will have on its financial statements as it relates to its non-financial assets and liabilities.

The following table presents information about the Company’s financial assets that have been measured at fair value as of March 31, 2008 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value.  In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.  Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices, for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.  Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability (in millions):

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Description	March 31, 2008		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	24.1	$	24.1	$	—	$	—
Marketable debt securities	34.4		34.4		—		—
Total	$	58.5	$	58.5	$	—	$	—

As of March 31, 2008, the Company’s short-term and long-term investments consisted of U.S. Treasury notes and bills which are categorized as Level 1 in accordance with SFAS 157.  The fair values of our cash equivalents and marketable debt securities are determined through market, observable and corroborated sources.  The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities.

6.NET LOSS PER SHARE

Net loss per share is computed under SFAS No. 128, “Earnings Per Share.”  Basic net loss per share is computed using the weighted average number of shares of common stock outstanding.  Diluted net loss per share does not differ from basic net loss per share since potential common shares from the exercise of stock options are antidilutive for all periods presented and, therefore, are excluded from the calculation of diluted net loss per share.  Stock options totaling 8,620,205 and 5,917,121 were outstanding at March 31, 2008 and 2007, respectively.

7. INVESTMENT IN JOINT VENTURE (DYAX-GENZYME LLC) AND OTHER RELATED PARTY TRANSACTIONS

Prior to February 20, 2007, the Company had a collaboration agreement with Genzyme for the development and commercialization of DX-88 for hereditary angioedema (HAE). Under this collaboration, the Company and Genzyme formed a joint venture, known as Dyax–Genzyme LLC, through which they jointly owned the rights to DX-88 for the treatment of HAE. Dyax and Genzyme were each responsible for approximately 50% of ongoing costs incurred in connection with the development and commercialization of DX-88 for HAE and each was entitled to receive approximately 50% of any profits realized during the term of the collaboration. In addition, the Company was entitled to receive potential milestone payments from Genzyme in connection with the development of DX-88.

On February 20, 2007, the Company and Genzyme reached a mutual agreement to terminate this collaboration.  Pursuant to the termination agreement, Genzyme made a $17.0 million cash payment to the Dyax-Genzyme LLC. Furthermore, Genzyme assigned to Dyax all of its interests in the LLC, thereby transferring all the rights to the LLC’s assets to Dyax, including the $17.0 million cash payment.  In exchange, Dyax issued 4.4 million shares of its common stock to Genzyme.  As a result of the termination, the rights to DX-88, previously held by the joint venture, were returned to Dyax. Dyax’s acquisition of Genzyme’s 49.99% portion of the LLC was accounted for as a purchase of assets in exchange for 4.4 million shares of the Company’s common stock.  Genzyme also provided transition services to Dyax for a period following the termination of our agreements.  For the three months ended March 31, 2007 the transitional serve fee totaled $543,000.  The LLC has been dissolved and no transitional service fees are expected to be incurred in 2008 or in the future.

Before termination of the collaboration, HAE research and development expenses incurred by each party were billed to and reimbursed by Dyax–Genzyme LLC. The Company and Genzyme were each then required to fund 50% of the monthly expenses of Dyax–Genzyme LLC. The Company accounted for its interest in Dyax–Genzyme LLC using the equity method of accounting. Under this method, the reimbursement of expenses to Dyax was recorded as a reduction to research and development expenses

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because it included funding that the Company provided to Dyax–Genzyme LLC. Dyax’s 50.01% share of Dyax–Genzyme LLC loss was recorded as an Equity Loss in Joint Venture (Dyax–Genzyme LLC) in the consolidated statements of operations and comprehensive loss.  At March 31, 2008 and December 31, 2007, the Company’s LLC investment and related accounts have been consolidated in the Company’s financial statements.

Prior to August 29, 2007, Genzyme held a senior secured promissory note in the principal amount of $7.0 million issued by Dyax in May 2002.  Dyax’s obligations under this note were secured by a collateralized $7.2 million letter of credit, the cash collateral for which was classified as restricted cash on the Company’s consolidated balance sheet.  On August 29, 2007, Dyax paid all the principal under this note plus accrued interest at the prime rate plus 2%.  The $7.2 million letter of credit that secured the loan was released and the cash collateral was reclassified from restricted cash included in cash and cash equivalents on the Company’s balance sheets as of March 31, 2008 and December 31, 2007.

The Company’s Chairman, President and Chief Executive Officer was an outside director of Genzyme Corporation until May 2007 and was a consultant to Genzyme until 2001. Two of the Company’s other directors are former directors of Genzyme and another was an officer of Genzyme and then senior advisor to Genzyme’s Chief Executive Officer.

At both March 31, 2008 and December 31, 2007, Genzyme owned approximately 8.2% of the Company’s common stock outstanding.

8. BUSINESS SEGMENTS

The Company discloses business segments under SFAS 131, “Disclosures about Segments of an Enterprise and Related Information,” which establishes standards for reporting information about operating segments in annual financial statements of public business enterprises. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has evaluated its business activities that are regularly reviewed by the Chief Executive Officer and that have discrete financial information available. As a result of this evaluation, the Company determined that it has one segment with operations in two geographic locations.  As of March 31, 2008 and December 31, 2007, the Company had approximately $695,000 and $738,000, respectively, of long-lived assets located in Europe, with the remainder held in the United States. For the three months ended March 31, 2008 and 2007, the Company did not have any external revenue outside the United States.

9. INCOME TAXES

We adopted the provisions of Financial Standards Accounting Board Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”) an interpretation of FASB Statement No. 109 (“SFAS 109”) on January 1, 2007.  As a result of the implementation of FIN 48, we recorded no adjustment for unrecognized income tax benefits.  At the January 1, 2007 adoption date of FIN 48, and also at December 31, 2007 and March 31, 2008, we had no unrecognized tax benefits.

We recognize interest and penalties related to uncertain tax positions in income tax expense.  As of December 31, 2007 and March 31, 2008, we had no accrued interest or penalties related to uncertain tax positions.

The tax years 1989 through 2007 remain open to examination by the major taxing jurisdictions to which we are subject.

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At December 31, 2007, the Company had federal and state net operating loss (“NOL”) carryforwards of $212.7 million and $140.3 million expiring at various dates through 2027, and federal and state research and experimentation credit carryforwards (“tax credits”) of $26.8 million and $4.4 million expiring at various dates through 2027. Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation pursuant to Section 382 of the Internal Revenue Code of 1986, as well as similar state and foreign provisions, due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. Since the Company’s formation, the Company has raised capital through the issuance of capital stock on several occasions which, combined with the purchasing shareholders’ subsequent disposition of those shares, may have resulted in a change of control, as defined by Section 382, or could result in a change of control in the future upon subsequent disposition. The Company will need to perform a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the Company’s formation.  Due to the significant complexity and cost associated with such a study and the potential for additional changes in control in the future, the Company has not currently completed any such study. If we have experienced a change of control at any time since Company formation, utilization of our NOL or tax credit carryforwards would be subject to an annual limitation under Section 382. Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax position under FIN 48.

In addition to uncertainties surrounding the use of NOL carryforwards in a change of control, the Company has identified orphan drug and research and development credits as material components of our deferred tax asset.  The uncertainties in these components arise from judgments in the allocation of costs utilized to calculate these credits.  The Company has not conducted a study to analyze these credits to substantiate the amounts due to the significant complexity and cost associated with such study.  Any limitation may result in expiration of a portion of the NOL or tax credits before utilization. Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax position under FIN 48.

10. LONG-TERM OBLIGATIONS

In August 2006, we entered into a Royalty Interest Assignment Agreement with Paul Royalty Fund Holdings II, LP, an affiliate of Paul Capital Partners, under which we received an upfront payment of $30 million.  In exchange for this payment, we assigned Paul Royalty a portion of milestones, royalties and other license fees to be received by us under the Licensing and Funded Research Program (LFRP) through 2017. The agreement will extend for an additional two years if the LFRP does not meet certain financial thresholds.  We also have an option to receive an additional $5 million payment from Paul Royalty in the event that the LFRP receipts achieve specified levels by the end of 2008, which would result in a pro rata increase in our payments to them.

Under the terms of the agreement, Paul Royalty was assigned a portion of the annual net LFRP receipts.  The portion assigned to Paul Royalty is tiered as follows:  70% of the first $15 million in annual receipts, 20% of the next $5 million, and 1% of any receipts above $20 million.  These percentages will increase on a pro rata basis if we are eligible to and elect to exercise our option for the additional $5 million payment.  The agreement also provides for annual guaranteed minimum payments to Paul Royalty, which start at $1.75 million through 2007 and increase to $3.5 million in 2008 and 2009, $6 million for years 2010 through 2013 and $7 million for years 2014 through 2017.  Paul Royalty’s rights to receive a portion of LFRP receipts will continue for up to 12 years, depending upon the performance of the LFRP.  Upon termination of the agreement, all rights to LFRP receipts will revert to the Company.

The upfront cash payment of $30.0 million, less the $500,000 in cost reimbursements paid to Paul Royalty was recorded as a debt instrument in long-term obligations on the Company’s consolidated balance sheet.  Based upon estimated future payments expected under this agreement, the Company determined the

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interest expense by using the effective interest method.  The best estimate of future payments was based upon returning to Paul Royalty an internal rate of return of 25% through net LFRP receipts, which approximates $82.1 million in total payments to Paul Royalty.  During the three months ended March 31, 2008 and 2007, the Company made payments totaling $3.2 million and $1.2 million, respectively, related to this obligation to Paul Royalty.  Due to the application of the effective interest method and the total expected payments, the Company recorded interest expense of $1.8 million and $1.9 million for the three months ended March 31, 2008 and 2007, respectively, of which $1.4 million was allocated to the principle amount in 2008 and no amount was allocated to the principal amount in 2007.  The debt balance was $26.6 million at March 31, 2008 and $28.1 million at December 31, 2007 and is included in long-term obligations on the Company’s consolidated balance sheet.

The Company capitalized $257,000 of debt issuance costs related to the agreement which are being amortized over the term of the related debt using the effective interest method.  At March 31, 2008 and December 31, 2007, the unamortized debt issuance costs were $219,000 and $225,000, respectively, and are included in other assets on the Company’s consolidated balance sheet.

11. SUBSEQUENT EVENTS

On April 23, 2008 Dyax Corp. and Cubist Pharmaceuticals, Inc. entered into an exclusive license and collaboration agreement for the development and commercialization of the intravenous formulation of DX-88 for the prevention of blood loss during surgery in North America and Europe.  Dyax retains exclusive rights to DX-88 in all other indications, including its hereditary angioedema program, as well as for the manufacturing of DX-88.

Under the terms of the agreement, Dyax received a $15.0 million upfront payment and will receive an additional $2.5 million milestone payment in 2008, and will be eligible to receive up to an additional $214 million in clinical, regulatory and sales-based milestone payments. Dyax is also entitled to receive tiered, double-digit royalties based on sales of DX-88 by Cubist. The agreement provides an option for Dyax to retain certain US co-promotion rights. Going forward, Cubist will be responsible for costs associated with the ongoing DX-88 on-pump cardiothoracic surgery (CTS) Phase 2 trial, known as Kalahari 1, as well as all further development costs associated with DX-88 in the licensed indications in the Cubist territory.

Dyax retains exclusive rights to DX-88 in all other indications, including its hereditary angioedema program, currently in its second Phase 3 trial, as well as for the manufacturing of DX-88. Dyax also plans to develop DX-88 in other angioedemas.

On April 28, 2008, Dyax announced that the Board of Directors of its Belgian subsidiary, Dyax SA, has initiated discussions with its 24 employees as it considers a possible closure of the Liege-based research facility. The closure option would allow for reduction in operating expenses and corresponds with Dyax’s strategic plan to direct its resources toward the commercialization of DX-88 in hereditary angioedema.  Additionally, the closure option would help optimize Dyax’s research and development capabilities by consolidating its discovery and preclinical programs at its headquarters in Cambridge, MA.  If completed, Dyax expects the closure would result in a charge upon the finalization of discussions with Liege employees and additional incremental charges will be recorded as they are incurred in the remaining quarters of 2008.  In accordance with Belgian law, however, no final decision has been reached and none is expected until some time in June 2008.

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

The discussion in this item and elsewhere in this report contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.  These risks and uncertainties include those described under “Important Factors That May Affect Future Operations and Results” below.

OVERVIEW

We are a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel biotherapeutics for unmet medical needs, with an emphasis on oncology and inflammatory indications.  We use our proprietary drug discovery technology, known as phage display, to identify antibody, small protein and peptide compounds for clinical development.  This phage display technology fuels our internal pipeline of promising drug candidates and attracts numerous licensees and collaborators, with the potential to generate important revenues in the future.

Our lead product candidate, DX-88 (ecallantide), is in late stage clinical trial development in two separate indications. The more advanced indication involves treatment of hereditary angioedema (HAE), a potentially life-threatening inflammatory condition. We have completed three Phase 2 trials and one Phase 3 trial of DX-88 in this indication. A second Phase 3 trial, known as EDEMA4, is currently being conducted under a Special Protocol Assessment (SPA). DX-88 has orphan drug designation in the United States and European Union, as well as Fast Track designation in the United States for the treatment of acute attacks of HAE.

Additionally, DX-88 is in clinical development for the prevention of blood loss during cardiothoracic surgery (CTS).  We completed a Phase 1/2 trial of DX-88 for the prevention of blood loss during on-pump coronary artery bypass graft (CABG) procedures.  A Phase 2 trial, known as Kalahari 1, is currently ongoing for further development of DX-88 in on-pump CTS, including CABG and heart valve replacement or repair procedures.  On April 23, 2008, we entered into an exclusive license and collaboration agreement with Cubist Pharmaceuticals, Inc. (“Cubist”), for the development and commercialization of the intravenous formulation of DX-88 for the prevention of blood loss during surgery in North America and Europe.  Under this Agreement, Cubist has assumed responsibility for the completion of the ongoing Phase 2 trial as well as all further development costs associated with DX-88 in the licensed indications in the Cubist territory.

Other than the rights licensed to Cubist, we retain all rights to DX-88, including its HAE program, as well as for the manufacturing of DX-88. We also plan to develop DX-88 in other angioedemas.

In addition to DX-88, our phage display technology and expertise has allowed us to develop a substantial pipeline of drug candidates. Our goal is to maintain over ten ongoing therapeutic programs in our pipeline at all times. Of our existing pipeline candidates, the furthest developed are DX-2240 and DX-2400, two fully human monoclonal antibodies with unique mechanisms of action in attacking cancerous tumors. In February 2008, we entered into an exclusive license agreement with sanofi-aventis under which sanofi-aventis will be responsible for the continued development of DX-2240.

All of the compounds in our pipeline were discovered using our proprietary phage display technology, which allows us to rapidly identify product candidates that bind with high affinity and specificity to therapeutic targets. Although we use this technology primarily to advance our own internal development activities, we also leverage it through licenses and collaborations designed to generate revenues and provide us access to co-develop and/or co-promote drug candidates identified by other biopharmaceutical and pharmaceutical companies. Through this program, which we refer to as our Licensing and Funded Research Program, or LFRP, we have agreements with more than 70 licensees and collaborators, which have resulted in 12 product candidates that licensed third parties have advanced into

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clinical trials and one product with market approval from the U.S. Food and Drug Administration (FDA). We have assigned a portion of the current and future revenues generated through the LFRP to Paul Royalty Holdings II, LP in connection with a financing in 2006.

We incurred losses in the three months ended March 31, 2008 and expect to continue to incur significant operating losses over at least the next several years.  We do not expect to generate profits until the therapeutic product candidates from our development portfolio reach the market, which can only occur after they are subjected to the uncertainties of the regulatory approval process.

Clinical Development Programs

DX-88 for HAE.    We are developing DX-88 as a treatment for HAE.

The clinical development of DX-88 for HAE completed to date is summarized as follows:

·In March 2003, we completed a 9-patient, multi-center, open-label, single dose, dose-escalating Phase 2 study, known as EDEMA0.

·In May 2004, we completed a 48-patient, multi-center, placebo-controlled, single dose, dose-escalating Phase 2 study, known as EDEMA1.

·In January 2006, we completed a 240 attack (77-patient), multi-center, open-label, repeat dosing Phase 2 study, known as EDEMA2.

·In November 2006, we completed a 72-patient, multi-center, Phase 3 study, known as EDEMA3, which was conducted at 34 sites in the United States, Europe, Canada and Israel. The primary objective of the EDEMA3 trial was to determine the efficacy and safety of our fixed 30 mg subcutaneous (SC) dose of DX-88 for patients suffering from moderate to severe acute HAE attacks. The EDEMA3 trial was comprised of two phases: a double-blind, placebo-controlled phase and a repeat dosing phase. In the first phase, HAE patients received either a single dose of DX-88 or placebo. After patients received one treatment in the placebo-controlled portion of the study, they were eligible for the second phase where they received repeat dosing with DX-88 for any subsequent acute attacks.

·In April 2007 we treated the first patient in a second Phase 3 study, known as EDEMA4. The EDEMA4 trial is a 96-patient, multi-center study being conducted at approximately 40 sites in the United States. The trial is being conducted as a double-blind, placebo-controlled study in which HAE patients will receive a single 30 mg SC dose of DX-88 or placebo. This trial, which is being conducted under an S.P.A., is intended to further support the validity of the patient reported outcome methodology used in the EDEMA3 trial and further assess the efficacy and safety of DX-88.

·An on-going, open-label continuation study is also being conducted to augment our clinical data with respect to
DX-88.

In light of the data generated by the trials we have completed to date and assuming the successful completion of the EDEMA4 trial, we now estimate regulatory approval of DX-88 for HAE in the United States at the end of 2008 based on an expedited six month review, followed by approval in the European Union.

Given our familiarity with the HAE market and its relatively small number of treating allergists, we believe the optimal commercialization strategy for the HAE indication is to build an internal sales team to promote DX-88 in the United States and to establish regional partnerships for distribution in other major markets.  However, because regulatory approvals for new pharmaceutical products can be and often are

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significantly delayed or refused for numerous reasons, including those described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007, DX-88 may not be approved on the timeline we expect, or at all.

Through February 20, 2007, all development activities related to DX-88 for HAE were conducted in collaboration with Genzyme Corporation and managed through Dyax–Genzyme LLC, a jointly owned limited liability company. On February 20, 2007, we reached a mutual agreement with Genzyme to terminate our collaboration.  See Footnote 7 “Investment in Joint Venture (Dyax-Genzyme LLC) and Other Related Party Transactions” for additional information regarding this agreement.  Dyax–Genzyme LLC was responsible for the reimbursement of all development expenses related to the HAE program in the first quarter of 2007 until the termination of the collaboration.  This reimbursement was recorded as research and development expenses reimbursed by joint venture (Dyax–Genzyme LLC) in our consolidated statements of operations and comprehensive loss.  In the three months ended March 31, 2007 (the “2007 Quarter”), Dyax–Genzyme LLC reimbursed us $7.0 million for our expenses relating to the program.  Our portion of the LLC losses were separately classified as equity loss in joint venture on our consolidated statements of operations and comprehensive loss and were proportional to our 50.01% financial interest in the program.  Our portion of the losses was $3.8 million for the 2007 Quarter.

Under the terms of the termination agreement, we received all of the assets of Dyax-Genzyme LLC, including fixed assets, the rights to DX-88 worldwide, and a $17.0 million cash payment made by Genzyme to the LLC in connection with the termination, which is being used to fund the development of DX-88 for HAE.  We estimate the total remaining costs to approval of DX-88 for HAE in the United States to be in the range of $35 million to $45 million.

The following table illustrates the activity associated with DX-88 for HAE included in our consolidated statements of operations and comprehensive loss:

	Three Months Ended March 31,
	2008		2007
	(In thousands)
DX-88 for HAE costs included within research and development expenses in the consolidated statements of operations and comprehensive loss	$	7,126	$	9,647
Less research and development expenses reimbursed by joint venture (Dyax-Genzyme LLC) per the consolidated statements of operations and comprehensive loss	—		(7,000		)
Net research and development expenses for DX-88 for HAE	7,126		2,647
Equity loss in joint venture (Dyax-Genzyme LLC) separately classified within the consolidated statements of operations and comprehensive loss	—		3,831
Net loss on DX-88 for HAE program	$	7,126	$	6,478

During the three months ended March 31, 2008 (the “2008 Quarter”), the research and development expenses on the HAE program totaled $7.1 million compared with $9.6 million in the 2007 Quarter. The decrease in spending from 2007 to 2008 is attributable to decreased costs related to the manufacture of DX-88 material and associated licensure studies as well as the completion of preclinical studies.  These decreases were offset by increases in clinical costs for our on-going Phase 3 studies as well as an increase in personnel expenses required to support the advancement of the HAE program.

DX-88 for on-pump CTS.     DX-88 is also being developed as an alternate treatment for the prevention of blood loss in patients undergoing on-pump cardiothoracic surgery (on-pump CTS), specifically CABG and heart valve replacement or repair procedures.

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In May 2007, we initiated a Phase 2, 160-patient, randomized, placebo-controlled study that will be conducted at 13 or more major U.S. cardiac surgery centers.  During the 2008 Quarter, research and development expenses on this program totaled $1.2 million, compared to $970,000 for the 2007 Quarter.  The increase in spending from 2007 to 2008 is attributable to clinical trial costs related to our Phase 2 study.

As a result of the agreement between Dyax and Cubist, entered into on April 23, 2008, further development of DX-88 in on-pump CTS will be conducted by Cubist and Dyax will have no further financial obligation with respect to the development and commercialization of DX-88 in the licensed indications in the Cubist territory.

Goals for Clinical Development Programs.  Our goal for both of our ongoing clinical development programs for DX-88 is to obtain marketing approval from the FDA and analogous international regulatory agencies. Material cash inflows from either of these programs, other than upfront and milestone payments from any collaboration we may enter into, will not commence until after marketing approvals are obtained, and then only if the product candidate finds acceptance in the marketplace as a treatment for its disease indication. Because of the many risks and uncertainties related to the completion of clinical trials, receipt of marketing approvals and acceptance in the marketplace, we cannot predict when material cash inflows from these programs will commence, if ever.

Other Biopharmaceutical Discovery and Development Programs.

In addition to our drug candidates in clinical trials, our phage display technology and expertise has allowed us to develop a substantial pipeline of drug candidates. Our goal is to maintain over ten ongoing therapeutic programs in our pipeline at all times. Of our existing pipeline candidates, the furthest developed are DX-2240 and DX-2400, two fully human monoclonal antibodies with therapeutic potential in oncology indications.

Our DX-2240 antibody has a novel mechanism of action that targets the Tie-1 receptor on tumor blood vessels. In preclinical animal models, DX-2240 has demonstrated activity against a broad range of solid tumor types. Data also indicates increased activity when combined with other antiangiogenic therapies, such as Genentech’s Avastin® and Bayer’s Nexavar®, and other chemotherapeutic agents. In February 2008, we entered into a license agreement with sanofi-aventis, under which we granted sanofi-aventis exclusive worldwide rights to develop and commercialize DX-2240 as a therapeutic product. As a result of this agreement, we received approximately $15 million of cash in the 2008 Quarter.  Of this $15 million, approximately $5 million is for the upfront product license fee and approximately $10 million is a transfer fee for DX-2240 inventory and know-how.  An additional $8.5 million is anticipated upon the delivery of additional specified deliverables.  Under the terms of this agreement we are eligible to receive up to $233 million in milestone payments.  We are also entitled to receive tiered royalties based on sales of DX-2240 by sanofi-aventis.  We do not expect to incur any further costs in the development of DX-2240.

Our DX-2400 antibody is a novel protease inhibitor that specifically inhibits matrix metalloproteinase 14 (MMP-14) on tumor cells and tumor blood vessels. DX-2400 offers a potential treatment for a broad range of solid tumors. It has been shown to significantly inhibit tumor growth, metastasis and angiogenesis in multiple preclinical models in a dose-responsive manner.

In total, these programs represented approximately $8.8 million of our research and development expenses during the 2008 Quarter.

Given the uncertainties of the research and development process, it is not possible to predict with confidence if we will be able to enter into additional partnerships or otherwise internally develop any of these other preclinical drug candidates into marketable pharmaceutical products. We monitor the results of our discovery research and our nonclinical and clinical trials and frequently evaluate our pre-clinical pipeline in light of new data and scientific, business and commercial insights with the objective of balancing risk and potential. This process can result in relatively abrupt changes in focus and priority as new information becomes available and we gain additional insights into ongoing programs and potential new programs.

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Our Business Strategy

Our business strategy is to build a broad portfolio of biotherapeutic products identified using our proprietary phage display technology. We intend to accomplish this through the following activities:

·Focus our efforts on completing the clinical development of DX-88 for the treatment of HAE;

·Continue to optimize the value of the DX-88 franchise through one or more strategic collaborations;

·Position ourselves to advance additional product candidates into the clinic;

·Continue to use our technology and expertise to discover, develop and commercialize new therapeutic product candidates either alone or in collaboration with partners; and

·Continue to license our technology broadly under the LFRP.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2008 AND 2007

Revenue.   Substantially all our revenue has come from licensing, funded research and development activities, including milestone payments from our licensees and collaborators. This revenue fluctuates from quarter-to-quarter due to the timing of the clinical activities of our collaborators and licensees. Revenue was constant at $2.6 million in the 2008 Quarter compared to the 2007 Quarter. Patent and library licensing revenue increased $893,000 due to milestone and product license revenue which was offset by a $881,000 decrease in funded research revenue.  During the 2008 Quarter, we received $14.7 million in cash from our exclusive license agreement for DX-2240 with sanofi-aventis.  The revenue associated with the DX-2240 exclusive license has been deferred and will be recorded when all revenue recognition criteria have been met, which is expected in 2008.  An additional cash receipt of $8.5 million is anticipated upon the delivery of specified deliverables to sanofi-aventis.

Research and Development.   Our research and development expenses for the 2008 and 2007 Quarters are summarized as follows:

	Three Months Ended March 31,
	2008		2007
	(In thousands)
Research and development expenses per consolidated statements of operations and comprehensive loss	$	17,147	$	20,314
Less research and development expenses reimbursed by joint venture (Dyax-Genzyme LLC) per consolidated statements of operations and comprehensive loss	—		(7,000		)
Net research and development expenses per consolidated statements of operations and comprehensive loss	17,147		13,314
Equity loss in joint venture (Dyax-Genzyme LLC) separately classified within the consolidated statements of operations and comprehensive loss	—		3,831
Research and development expenses adjusted to include equity loss in joint venture	$	17,147	$	17,145

Our research and development expenses arise primarily from compensation and other related costs for our personnel dedicated to research and development activities and for the fees paid and costs

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reimbursed to outside parties to conduct research and clinical trials and to manufacture drug material prior to FDA approval. In the 2008 Quarter, all expenses incurred on the DX-88 program for HAE are included in our overall research and development expenses.  In the 2007 Quarter, a portion of expenses incurred on the program were reimbursed by Dyax–Genzyme LLC joint venture and excluded from net research and development expenses. However, we jointly funded the losses of that program with Genzyme, so our line item for equity loss in joint venture represents our share of all expenses for the development of DX-88 for HAE through February 20, 2007, including any incurred by Genzyme. Since termination of the collaboration in the 2007 Quarter, there has been and will be no further reimbursement from the joint venture with Genzyme or any equity loss in the joint venture.

Of the $3.2 million decrease in research and development expenses, $6.4 million is primarily attributable to decreased manufacturing expenses for DX-88.  This decrease was offset by an increase of $1.6 million in internal expenses to support the advancement of DX-88 for HAE and a $2.0 million sub-license expense incurred as a result of the licensure of DX-2240 to sanofi-aventis.

Combining our net research and development expenses and our equity loss in joint venture to show our total expenses for research and development, our adjusted net research and development expenses increased $2,000 from 2007 to 2008 due primarily to the termination of the collaboration with Genzyme, which caused a decrease in reimbursement by the Dyax-Genzyme LLC joint venture, and an offsetting decrease in our equity loss in joint venture.

Our management believes that the above presentation of adjusted net research and development expenses, although a non-GAAP measure, provides investors a better understanding of how total research and development efforts affect our consolidated statements of operations and comprehensive loss in prior periods. Our presentation of this measure, however, may not be comparable to similarly titled measures used by other companies.

General and Administrative.   Our general and administrative expenses consist primarily of the costs of our management and administrative staff, as well as expenses related to business development, protecting our intellectual property, administrative occupancy, professional fees, market research and promotion activities and the reporting requirements of a public company. General and administrative expenses were $5.5 million for the 2008 Quarter compared to $4.1 million for the 2007 Quarter.  This increase is due to increased personnel costs and increased pre-commercialization costs for DX-88 for HAE.

Interest Expense.Interest expense decreased $384,000, from $2.3 million in the 2007 Quarter to $1.9 million in the 2008 Quarter.  This decrease is due to a decrease in interest expense from the loan with Genzyme that was fully paid in the third quarter of 2007, and a decrease in non-cash interest from our revenue assignment agreement with Paul Royalty.

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LIQUIDITY AND CAPITAL RESOURCES

Condensed Consolidated Statements of Cash Flows:

	Three Months Ended March 31,
	2008			2007
	(In thousands)
Net loss	$	(21,335	)	$	(20,017	)
Depreciation and amortization	875			1,037
Interest expense on Paul Royalty agreement	1,761			1,949
Compensation expenses associated with stock-based compensation plans	950			605
Equity loss in joint venture (Dyax-Genzyme LLC)	—			3,831
Other changes in operating activities	(29		)	(114		)
Changes in operating assets and liabilities	19,100			1,683
Net cash provided by (used in) operating activities	1,322			(11,026		)
Change in marketable securities	(195		)	21,598
Cash received in purchase of joint venture (Dyax-Genzyme LLC)	—			17,000
Other changes in investing activities	630			(4,347		)
Net cash provided by investing activities	435			34,251
Repayment of long-term obligations	(3,631		)	(1,731		)
Other changes in financing activities	267			232
Net cash provided by financing activities	(3,364		)	(1,499		)
Effect of foreign currency translation on cash balances	(63		)	(10		)
Net (decrease) increase in cash and cash equivalents	$	(1,670	)	$	21,716

We require cash to fund our operating expenses, to make capital expenditures, acquisitions and investments, and to pay debt service. Through March 31, 2008, we have funded our operations principally through the sale of equity securities, which have provided aggregate net cash proceeds since inception of approximately $285 million, including net proceeds of $41.3 million from our July 2007 underwritten offering. We also generate funds from biopharmaceutical product development and license fee revenue, long-term obligations and other sources such as the August 2006 transaction with Paul Capital. As of March 31, 2008, we had cash and cash equivalents, short-term and long-term investments aggregating $62.1 million. Our excess funds are currently invested in short-term and long-term investments primarily consisting of U.S. Treasury notes and bills and money market funds backed by U.S. Treasury obligations.

Our operating activities provided cash of $1.3 million in the 2008 Quarter and used cash of $11.0 million in the 2007 Quarter.  Our cash provided by operating activities for the 2008 Quarter consisted primarily of adjustments for non-cash items including changes in operating assets and liabilities of $19.1 million, interest expense related to the Paul Royalty agreement of $1.8 million and depreciation and amortization of fixed assets and intangibles totaling $875,000.  This was significantly offset by our net loss of $21.3 million.  The change in operating assets and liabilities includes an increase in deferred revenue of $18.1 primarily due to the license agreement with sanofi-aventis, a decrease in accounts receivable of $2.5 million and a decrease in accounts payable of $1.2 million.  Our cash used in operating activities for the 2007 Quarter consisted primarily of our net loss of $20.0 million offset by adjustments for non-cash items, including equity loss in joint venture (Dyax-Genzyme LLC) of $3.8 million, interest expense related to the Paul Royalty agreement of $1.9 million, depreciation and amortization of fixed assets and intangibles totaling $1.0 million, compensation expense associated with stock-based compensation plans totaling $605,000 and a $1.7 million change in operating assets and liabilities.  The change in operating assets and

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liabilities included an increase in accounts payable and accrued expenses of $1.4 million, a decrease in accounts receivable of $1.1 million, a decrease in amount due from the joint venture (Dyax-Genzyme LLC) totaling $1.4 million, and a decrease in amount due to the joint venture (Dyax-Genzyme LLC) totaling $967,000.

Our investing activities provided cash of $435,000 in the 2008 Quarter, compared with $34.3 million in the 2007 Quarter.  Our investing activities for the 2007 Quarter are primarily due to a $1.6 million decrease in restricted cash from a contractual reduction of our letter of credit that serves as our security deposit for the lease of our facility in Cambridge, Massachusetts.  This is offset by $947,000 purchase of fixed assets, and the timing of the maturity of our investments.  Our investing activities for the 2007 Quarter included $17.0 million received in the purchase of the joint venture (Dyax-Genzyme LLC), contributions to Dyax-Genzyme LLC of $3.8 million and the timing of the maturity of our short-term investments.

 Our financing activities used cash of $3.4 million in the 2008 Quarter, compared with $1.5 million in the 2007 Quarter.  Our financing activities for the 2008 Quarter primarily consisted of the repayment of long-term obligations of $3.6 million, which includes payments to Paul Royalty, partially offset by proceeds from the issuance of common stock under the employee stock purchase plan and the exercise of stock options.  Our financing activities for the 2007 Quarter included repayment of long-term obligations of $1.7 million, which includes payments to Paul Royalty, partially offset by proceeds from the issuance of common stock under the employee stock purchase plan and the exercise of stock options.

We have financed fixed asset acquisitions through capital leases. These obligations are collateralized by the assets under lease.

We believe that our net 2008 cash consumption will not exceed our 2007 amount of $38.3 million, as a result of the completion of our recent deals with sanofi-aventis and Cubist Pharmaceuticals.  Currently, we believe we have sufficient cash reserves to fund operations well into 2009.  For the foreseeable future, we expect to continue to fund any deficit from our operations through new collaborations and the sale of additional equity or debt securities. The sale of any equity or debt securities may result in additional dilution to our stockholders, and we cannot be certain that additional financing will be available in amounts or on terms acceptable to us, if at all. If we are unable to obtain any required additional financing and additional collaborations, we may be required to reduce the scope of our planned research, development and commercialization activities, which could harm our financial condition and operating results.

OFF BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements with the exception of operating leases.

COMMITMENTS AND CONTINGENCIES

In our Annual Report on Form 10-K for the year ended December 31, 2007 under the heading “Contractual Obligations,” we outlined our commitments and contingencies. For the quarter ended March 31, 2008, there have been no material changes in our commitments and contingencies.

CRITICAL ACCOUNTING ESTIMATES

In our Annual Report on Form 10-K for the year ended December 31, 2007, our most critical accounting policies and estimates were identified as those relating to revenue recognition, allowance for doubtful accounts, royalty interest obligations, share-based compensation and valuation of long-lived and intangible assets. We reviewed our policies and determined that those policies remain our most critical

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accounting policies for the quarter ended March 31, 2008.  In the first quarter of 2008, there have been no changes to our critical accounting policies.

IMPORTANT FACTORS THAT MAY AFFECT FUTURE OPERATIONS AND RESULTS

This Quarterly Report on Form 10-Q contains forward-looking statements, including statements regarding our results of operations, financial resources, research and development programs, pre-clinical studies, clinical trials and collaborations.  Statements that are not historical facts are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections for our business and the industry and markets in which we compete.  The statements contained in this report are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict.  Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements.  Important factors which may affect future operating results, research and development programs, pre-clinical studies, clinical trials, and collaborations include, without limitation, those set forth in Item 1A entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007.  You should carefully review the risks described herein and in other documents we file from time to time with the Securities and Exchange Commission.

Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk consists primarily of our cash and cash equivalents and short-term and long-term investments. We place our investments in high-quality financial instruments, primarily U.S. Treasury notes and bills, and obligations of U.S. government agencies, which we believe are subject to limited credit risk. We currently do not hedge interest rate exposure. As of March 31, 2008, we had cash, cash equivalents, and short-term and long-term investments of approximately $62.1 million.  Our short-term and long-term investments will decline by an immaterial amount if market interest rates increase, and therefore, our exposure to interest rate changes is immaterial. Declines of interest rates over time will, however, reduce our interest income from our investments.

As of March 31, 2008, we had $29.7 million outstanding under long-term obligations.  Interest rates on $3.1 million of these obligations are fixed and therefore are not subject to interest rate fluctuations.  The assumed interest rate on the $26.6 million outstanding to Paul Royalty under our Royalty Interest Assignment Agreement is calculated using the effective interest method based upon estimated future royalty interest obligation payments and therefore is not subject to interest rate fluctuations.  Therefore our exposure to interest rate changes is immaterial.

Most of our transactions are conducted in U.S. dollars. We have collaboration and technology license agreements with parties located outside of the United States. We also have a research facility located in Europe. Transactions under certain of the agreements between us and parties located outside of the United States, as well as transactions conducted by our foreign facility, are conducted in local foreign currencies. If exchange rates undergo a change of up to 10%, we do not believe that it would have a material impact on our results of operations or cash flows.

Item 4 - CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934). Based on this evaluation, our principal executive officer and principal financial officer concluded

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that these disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control that occurred during our fiscal quarter ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Item 6 – EXHIBITS

EXHIBIT NO.	DESCRIPTION
3.1	Amended and Restated Certificate of Incorporation of the Company.  Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 000-24537) for the quarter ended June 30, 2004 and incorporated herein by reference.
3.2(a)	Amended and Restated By-laws of the Company. Filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q (File No. 000-24537) for the quarter ended September 30, 2000 and incorporated herein by reference.
3.2(b)	Amendment to Article IV of the By-laws of the Company. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed December 7, 2007 and incorporated herein by reference.
3.3	Certificate of Designations Designating the Series A Junior Participating Preferred Stock of the Company. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on June 27, 2001 and incorporated herein by reference.
10.1[†]	Product License Agreement between sanofi-aventis and the Company dated as of February 11, 2008. Filed herewith.
31.1	Certification of Chief Executive Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.
31.2	Certification of Chief Financial Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.
32	Certification pursuant to 18 U.S.C. Section 1350. Filed herewith.

†This Exhibit has been filed separately with the Commission pursuant to an application for confidential treatment.  The confidential portions of this Exhibit have been omitted and are marked by an asterisk.

24

DYAX CORP.

SIGNATURE

Pursuant to the requirements 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.

	DYAX CORP.
Date:  May 5, 2008
	/s/  Stephen S. Galliker
	Executive Vice President, Chief
	Financial Officer (Principal Financial and
	Accounting Officer)

25

DYAX CORP.

EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
3.1	Amended and Restated Certificate of Incorporation of the Company.  Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 000-24537) for the quarter ended June 30, 2004 and incorporated herein by reference.
3.2(a)	Amended and Restated By-laws of the Company. Filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q (File No. 000-24537) for the quarter ended September 30, 2000 and incorporated herein by reference.
3.2(b)	Amendment to Article IV of the By-laws of the Company. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed December 7, 2007 and incorporated herein by reference.
3.3	Certificate of Designations Designating the Series A Junior Participating Preferred Stock of the Company. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-24537) filed on June 27, 2001 and incorporated herein by reference.
10.1[†]	Product License Agreement between sanofi-aventis and the Company dated as of February 11, 2008. Filed herewith.
31.1	Certification of Chief Executive Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.
31.2	Certification of Chief Financial Officer Pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended. Filed herewith.
32	Certification pursuant to 18 U.S.C. Section 1350. Filed herewith.

†This Exhibit has been filed separately with the Commission pursuant to an application for confidential treatment.  The confidential portions of this Exhibit have been omitted and are marked by an asterisk.

26

EX-10.1

Exhibit 10.1

PRODUCT LICENSE AGREEMENT

This PRODUCT LICENSE AGREEMENT (this “Agreement”) is entered into effective as of February 11, 2008 (the “Effective Date”), is between DYAX CORP., a Delaware, United States corporation, with offices at 300 Technology Square, Cambridge, Massachusetts 02139, U.S.A. (“Dyax”), and SANOFI-AVENTIS, a French corporation with its principal registered headquarters  at 174, avenue de France, 75013 Paris, France  (“Licensee”).

WHEREAS, Dyax has identified an antibody with binding affinity to the Tie-1 protein, known as DX-2240, which is more specifically described in Appendix A attached hereto;

WHEREAS, Dyax has also developed and licensed certain know-how and intellectual property relating to DX-2240;

WHEREAS, Licensee and its Affiliates are engaged in the development, manufacture and commercialization of products for human diseases and disorders;

WHEREAS, Licensee desires to obtain a license for it and its Affiliates, under the know-how and intellectual property owned and controlled by Dyax, to use, research, develop, manufacture and commercialize DX-2240 under the terms and conditions hereof; and

WHEREAS, Dyax is willing to grant such a license to Licensee and its Affiliates on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1.1“Affiliate” shall mean, with respect to either Party, a corporation or other legal entity that controls, is controlled by, or is under common control with such Party.  For purposes of this definition, “control” means the ownership, directly or indirectly, of more than fifty percent (50%) of the outstanding equity securities of a corporation which are entitled to vote in the election of directors or a more than fifty percent (50%) interest in the net assets or profits of an entity which is not a corporation.

1.2“CAT” shall mean the business entity formerly known as Cambridge Antibody Technologies, Limited and now known as MedImmune Limited.

1.3“CAT Patent Rights” shall mean the “Antibody Phage Display Patents” as that term is defined in Clause 1.1 of the CAT Product License.

1.4“CAT Product License” shall mean that certain Product License to Tie-1, dated as of April 3, 2006, between Dyax and CAT as amended from time to time under which CAT has granted Dyax a license, under the CAT Patent Rights, to develop and commercialize antibodies directed to the Target.  A redacted form of the CAT Product License as of the Effective Date is attached hereto as Appendix C.

1.5“CAT Sublicense” has the meaning set forth in Section 2.1(b) hereof.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

1.6“CAT Valid Claim” shall mean a claim of an issued and unexpired patent included within the CAT Patent Rights and that has been licensed to CAT by the Medical Research Council, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

1.7“Cell Lines” shall mean all cell lines developed as of the Effective Date that express DX-2240, as specifically described in Appendix D attached hereto.

1.8“Combination Product” shall mean commercial product that includes a Licensed Product and one or more other products or active ingredients, devices or components that are themselves not the Licensed Product.

1.9“Commercially Reasonable and Diligent Efforts” shall mean the level of effort and resources normally used by a company engaged in the development of products for human diseases and disorders for a product or compound owned or controlled by it, which is of similar market potential and at a similar stage in its development or product life, taking into account with respect to a product issues of safety and efficacy, product profile, the proprietary position of the product, the then current competitive environment for the product and the likely timing of the product’s entry into the market, the regulatory environment of the product, and other relevant scientific, technical and commercial factors.

1.10“Confidential Information” has the meaning set forth in Section 7.1 hereof.

1.11“Control” shall mean, with respect to a Party, the ownership or, or possession of the ability to assign, grant access to or license or sublicense intellectual property, in any case without violating the terms of any agreement binding on such Party.

1.12“DX-2240” shall mean that certain antibody identified by Dyax with binding affinity to Tie-1, as specifically described in Appendix A attached hereto.

1.13“DX-2240 Inventory” shall mean all existing GMP supplies of expressed and purified DX-2240 owned by Dyax as of the Effective Date, as specifically described in Appendix D attached hereto.

1.14“DX-2240 IP” shall mean the DX-2240 Patent Rights and the DX-2240 Know-How.

1.15“DX-2240 Know-How” shall mean any Know-How that is (a) Controlled by Dyax on the Effective Date, and (b) used in or otherwise necessary or useful for the research, development, manufacture and/or commercialization of DX-2240.

1.16“DX-2240 Patent Rights” shall mean (a) the Patent Rights listed in Appendix E hereto and any patents issuing from such applications, together with any reissues, reexaminations, renewals, and extensions thereof, and all continuations, continuations-in-part and divisionals of the patents and patent applications throughout the world.

1.17“EMEA” shall mean the European Medicines Agency or any successor agency thereto.

1.18“FDA” shall mean the United States Food and Drug Administration or any successor agency thereto.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

2

1.19“Field of Use” shall mean all human therapeutic uses, specifically excluding Research Products and Separations Applications.

1.20“First Commercial Sale” shall mean the first commercial sale of any Licensed Product by Licensee or its Related Parties in any country after grant of a Marketing Authorization in that country.

1.21“FTE” shall mean a full-time equivalent person year (consisting of a total of 1,760 hours) of work.

1.22“GMP” shall mean current Good Manufacturing Practices as defined under the US Federal Food Drug and Cosmetic Act as of the Effective Date.

1.23“IND” shall mean an Investigational New Drug Application filed with FDA, or a similar application to conduct clinical studies filed with an applicable Regulatory Authority outside of the United States.

1.24“Indication” shall mean a new and distinct disease category (for example, cancer versus inflammation) and does not mean a different type or subpopulation within the same primary disease (for example, colon cancer versus breast cancer).

1.25“Know-How” shall mean any information and materials, whether proprietary or not and whether patentable or not, including without limitation ideas, concepts, formulas, methods, protocols, procedures, knowledge, know-how, trade secrets, processes, assays, skills, experience, techniques, designs, compositions, plans, documents, results of experimentation and testing, including without limitation, pharmacological, toxicological, and pre-clinical and clinical test data and analytical and quality control data, improvements, discoveries, works of authorship, compounds and biological materials.

1.26“Licentia Agreement” shall mean that certain Collaboration and License Agreement, dated October 31, 2001, by and among Dyax, Licentia Limited (“Licentia”) and Kari Alitalo, as amended from time to time.  The Licentia Agreement as of the Effective Date is attached hereto as Appendix F.

1.27“Licentia IP” shall mean the Licentia Patent Rights and any Know-How or other intellectual property rights to which Dyax has been granted rights under the Licentia Agreement.

1.28“Licentia Patent Rights” shall mean the “Licensed Patents” as that term is defined in Section 1.8 of the Licentia Agreement.

1.29“Licensed Product” shall mean any product intended for commercial sale in the in Field of Use which comprises or incorporates DX-2240.  For the avoidance of doubt, a Licensed Product that is developed or commercialized in additional Indications shall be considered a single Licensed Product; provided however, that if a Licensed Product for any such additional Indication has a different Stock Keeping Unit (SKU) or is otherwise traceable uniquely through IMS, it shall be considered to be a separate Licensed Product.

1.30“Licensed Product IP” shall mean all Patent Rights, Know-How and other intellectual property rights  (but specifically excluding the DX-2240 IP, CAT Patent Rights, Licentia IP and XOMA IP) conceived, reduced to practice or otherwise made by Licensee or its Related Parties (or by any person or business entity acting on Licensee’s or its Related Parties’ behalf who is obligated by law or contract to assign such intellectual property to Licensee or its Related Parties) on or after the Effective Date arising in connection with the use, research, development, manufacture and/or commercialization of DX-2240 or Licensed Products.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

3

1.31“Licensed Product Patent Rights” shall mean any Patent Rights that claim or cover product or technology, or the use thereof, included in the Licensed Product IP.

1.32“Licensee” shall mean sanofi-aventis, as identified above, and its Affiliates.

1.33“Lonza Agreement” shall mean that certain Agreement, dated March 10, 2005, by and among Dyax and Lonza Biologics PLC (“Lonza”), as amended to date.  The Lonza Agreement is attached hereto as Appendix G.

1.34“Marketing Authorization” shall mean any approval (including all applicable pricing and governmental reimbursement approvals) required from the relevant Regulatory Authority to market and sell a Licensed Product in a particular country.

1.35“Net Sales” shall mean, with respect to any Licensed Product sold by Licensee or its Related Parties, the price invoiced by that party to the relevant purchaser (or in the case of a sale or other disposal otherwise than at arm’s length, the price which would have been invoiced in a bona fide arm’s length contract or sale) but deducting the costs of packing, transport and insurance, customs duties, any credits actually given for returned or defective Licensed Products, normal trade discounts actually given, price concessions either mandated or negotiated with both commercial and/or government payers, and sales taxes, VAT or other similar tax charged on and included in the invoice price to the purchaser.  In the event the Licensed Product is sold in the form of a Combination Product, Net Sales will be determined by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B), where A is the invoice price of the Licensed Product, if sold separately, and B is the invoice price of any other active component or components in the combination, if sold separately, in each case in the same country and similar class, purity and dosage as in the Combination Product.  If, on a country-by-country basis, the Licensed Product or the other active component or components in the Combination Product is / are not sold separately in such country, Net Sales shall be determined by multiplying actual Net Sales of such Combination Product by the fraction C/(C+D), where C is the fair market value of the Licensed Product portion of such combination and D is the fair market value of the other a active component or components (such fair market values to be determined by mutual agreement of the parties or, in the absence of such mutual agreement, by a neutral Third Party mutually designated by the parties and whose decision shall be binding on the parties).

1.36“Patent Rights” shall mean, with respect to any technology or product, (a) all patent applications heretofore or hereafter filed or having legal force in any country to the extent and only to the extent they claim or cover such technology or product or the use thereof, (b) all patents that have issued or in the future issue from such applications, including without limitation utility, model and design patents and certificates of invention, and (c) all divisionals, continuations, continuations-in-part, reissues, reexaminations, renewals, extensions or additions to any such patent applications and patents.

1.37“Party” shall mean Dyax or Licensee, and “Parties” means Dyax and Licensee.

1.38“Phase I Clinical Trial” shall mean a human clinical trial in any country that is intended to initially evaluate the safety of an investigational product in volunteer subjects or patients that would satisfy the requirements of 21 CFR 312.21(a), or other comparable regulation imposed by the FDA, the EMEA or their foreign counterparts.

1.39“Phase II Clinical Trials” shall mean the controlled human clinical trials conducted to evaluate the effectiveness of the drug for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term side effects and risks associated with the drug that would satisfy the

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

4

requirements of 21 CFR 312.21(b) or other comparable regulation imposed by the U.S. Food and Drug Administration, the EMEA  or their foreign counterparts.

1.40“Phase III Clinical Trial” shall mean a pivotal human clinical trial in any country the results of which could be used to establish safety and efficacy of a product as a basis for a Marketing Authorization application that would satisfy the requirements of 21 CFR 312.21(c) or other comparable regulation imposed by the FDA, the EMEA or their foreign counterparts.

1.41“Quarter” shall mean each period of three (3) months ending on March 31, June 30, September 30, or December 31 and “Quarterly” shall be construed accordingly.

1.42“Regulatory Authority” shall mean the FDA, the EMEA or any national or local agency, authority, department, inspectorate, minister, ministry official, parliament or public or statutory person (whether autonomous or not) of any government of any country having jurisdiction over any of the activities contemplated by this Agreement or the Parties, or any successor bodies thereto.

1.43“Related Party” shall mean a Party’s Affiliates and Sublicensees, which term includes those distributors whose obligations to such Party or Affiliate include responsibility for sales and/or marketing efforts in a country of the Territory or sharing of costs and expenses with respect to sales and/or marketing on behalf of a Party or its Affiliates, and which, for clarity, does not include wholesale distributors of such Party or its Affiliates who purchase Licensed Products from such party or its Affiliates in an arm’s length transaction and who have no sales, marketing or reporting obligation to such Party or its Affiliates.

1.44“Research and Development” shall mean, solely for the purposes of the XOMA Covenant (as described in Section 2.1(d), the identification, selection, isolation, purification, characterization, study and/or testing of DX-2240 for any purpose, including, without limitation, the discovery and development of human therapeutics.  Included within the definition of “Research and Development” shall be all in vitro screening or assays customarily performed in pre-clinical and clinical research and uses associated with obtaining FDA or EMEA or equivalent foreign counterpart Marketing Authorization.

1.45“Research Products” shall mean (a) any kit, vial or array (protein chip) containing one or more antibodies intended for sale to an end user solely for research purposes and (b) any antibodies sold to a Third Party for incorporation into any kit, vial or array (protein chip) that are intended for sale to an end user for research purposes.

1.46“Separations Applications” shall mean the use of antibodies for the development and manufacture of affinity chromatography purification media for use in the separation and purification of pharmaceuticals.

1.47“Sublicensee” shall mean an entity to which Licensee grants a sublicense pursuant to Section 2.2.

1.48“Target” shall mean Tie-1, as specifically described in Appendix B attached hereto.

1.49“Third Party” shall mean any entity other than Dyax or Licensee or their respective Affiliates.

1.50“Valid Claim” shall mean, with respect to the Patent Rights to which Licensee has been granted rights under Section 2.1, a claim of (a) an issued and unexpired patent, which has not been held invalid in a final decision of a court or administrative authority of competent jurisdiction from which no appeal may be taken, and

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

5

which has not been disclaimed or admitted to be invalid or unenforceable through reissue or otherwise, or (b) a pending patent application.

1.51“XOMA Agreement” shall mean that certain Amended and Restated License Agreement, dated October 27, 2006, by and between XOMA Ireland Limited (“XOMA”) and Dyax, as amended from time to time.  The XOMA Agreement as of the Effective Date is attached hereto as Appendix H.

1.52“XOMA Covenant” has the meaning set forth in Section 2.1(d) hereof.

1.53“XOMA IP” shall mean the XOMA Patent Rights and the XOMA Know-How.

1.54“XOMA Know-How” shall mean the “XOMA Know-How” as that term is defined in Section 1.23 of the XOMA Agreement.

1.55“XOMA Patent Rights” shall mean the “XOMA Patent Rights” as that term is defined in Section 1.24 of the XOMA Agreement.

ARTICLE 2

GRANT OF LICENSE AND OTHER RIGHTS

2.1Dyax Grants.  During the term of this Agreement, and subject to the terms and conditions of this Agreement, Dyax hereby grants to Licensee the following (for the avoidance of doubt, it is understood that “exclusive” means that the license is also exclusive vis a vis Dyax) :

(a)License to DX-2240 IP.  Dyax hereby grants to Licensee an exclusive worldwide license under the DX-2240 IP to use, research, develop,  offer for sale, sell, have sold, import and export and have imported and exported, Licensed Products, and to make or have made Licensed Products for such purposes.

(b)Sublicense under CAT Product License.  Subject specifically to the terms and conditions set forth in Section 2.3, Dyax hereby grants to Licensee a worldwide, non-exclusive sublicense of the rights granted to Dyax under Clause 2.1 of the CAT Product License (the “CAT Sublicense”) to use, research, develop, offer for sale, sell, have sold, import and export and have imported and exported, Licensed Products, and to make or have made Licensed Products for such purposes.

(c)Sublicense under Licentia Agreement.  Subject specifically to the terms and conditions set forth in Section 2.4, Dyax hereby grants to Licensee an exclusive worldwide sublicense of the rights granted to Dyax under Article 2 of the Licentia Agreement (the “Licentia Sublicense”) to use, research, develop, offer for sale, sell, have sold, import and export and have imported and exported, Licensed Products, and to make or have made Licensed Products for such purposes.  In case the Licentia Sublicense is terminated by Licentia as a result of a Dyax breach, Dyax shall be deemed to have breached the covenant made under Section 8.7(i) and Licensee shall be entitled to all legal remedies provided hereunder.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

6

(d)XOMA Covenant.  Subject specifically to the restrictions set forth in Section 2.5, Dyax represents to Licensee that, pursuant to a covenant running from XOMA to Dyax contained in the XOMA Agreement (the “XOMA Covenant”), XOMA has agreed that it shall not initiate or permit any Third Party over whom it has control to initiate or assist in any way in the initiation or prosecution of any action asserting a claim of infringement under the XOMA Patent Rights or misappropriation of the XOMA Know-How to the extent reasonably necessary to allow the Licensee to conduct the Research and Development activities that are contemplated under the terms of this Agreement.

2.2Sublicensing.  Subject to the restrictions set forth in Sections 2.3, 2.4 and 2.5 and the terms of this Agreement, Licensee may sublicense the rights granted to it under Section 2.1 to any Affiliate of Licensee or to any Third Party; provided, however, that such sublicense is in writing and:

(a)Licensee shall be responsible for the operations and activities of any Sublicensee as if such operations and activities were carried out by Licensee itself, including without limitation the payment of milestones, royalties, or other payments due to Dyax hereunder, regardless of whether the terms of any such sublicense provide for such amounts to be paid by the Sublicensee directly to Dyax;

(b)any such sublicense shall bind the Sublicensee in writing to all the applicable terms and conditions of this Agreement for the benefit of Dyax, including, without limitation Sections 2.3, 2.4 and 2.5 and shall require that the Sublicensee shall make reports and keep and maintain records of sales to at least the same extent required under this Agreement, allowing Dyax the same access and audit rights permitted under this Agreement;

(c)Licensee agrees to deliver to Dyax, subject to the terms of confidentiality set forth in Article 7, a copy of the written agreement evidencing such sublicense within thirty (30) days following its execution (Licensee being entitled to provide a redacted copy, the sole purpose of such copy being to allow Dyax to ensure that the sublicense meets the obligations set forth in  Section 2.2 (b) above); and

(d)in the event that Licensee’s rights under this Agreement are terminated in accordance with Article 11, such sublicense shall also terminate.

2.3Terms and Conditions Applicable to CAT Sublicense.

(a)Licensee hereby agrees:

(i)to abide by all of the terms and conditions applicable to Dyax and/or Dyax’s sublicensees  under the CAT Product License, subject to Section 2.3(a)(iii) hereafter;

(ii)that all rights of CAT under the CAT Product License shall remain in full force and effect; and

(iii)that all obligations of Dyax to CAT under the CAT Product License shall also be obligations of Licensee to Dyax, except for (i) any obligations of Dyax contained

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

7

in Clause 6 (Consideration) and Clause 7 (Provisions Relating to the Payment of Consideration) of the CAT Product License and (ii) any obligations set forth in any portion of the CAT Product License that has been redacted by Dyax.

(b)Notwithstanding anything to the contrary contained in the CAT Product License, the CAT Sublicense shall be subject to only the milestone and royalty payments set forth in Article 5 below and Licensee shall have no milestone or royalty payment obligations under the CAT Product License, for which Dyax shall remain solely responsible.

(c)Licensee shall indemnify and hold Dyax and its Affiliates, officers, directors, employees and agents harmless from and against any liability, damage, loss or expense (including reasonable attorney fees and expenses of litigation) incurred by any such party to CAT under or arising out of the CAT Product License, to the extent that such liability, damage, loss or expense was incurred by any such party as a result of a breach of any of the terms of this Agreement or of the CAT Product License by Licensee, subject to Section 2.3(a)(iii) above.

(d)CAT shall be a third party beneficiary of the CAT Sublicense and shall have the right to enforce the terms of this Section 2.3 (and claim damages as a result of any breach) directly against Licensee.

2.4Terms and Conditions Applicable to Licentia Sublicense.

(a)Licensee hereby agrees:

(i)to abide by all of the terms and conditions applicable to Dyax and/or Dyax’s sublicensees) under the Licentia Agreement;

(ii)that all rights of Licentia and/or Kari Alitalo under the Licentia Agreement shall remain in full force and effect; and

(iii)to abide by all obligations of Dyax to Licentia and/or Kari Alitalo under the Licentia Agreement, except for (A) any payment obligations of Dyax contained in Article 4 (Payment and Royalties) and (B) any obligations set forth in any portion of the Licentia Agreement that has been redacted by Dyax.

(b)Notwithstanding anything to the contrary contained in the Licentia Agreement, the Licentia Sublicense shall be subject to only the milestone and royalty payments set forth in Article 5 below and Licensee shall have no payment obligations under the Licentia Agreement, for which Dyax shall remain solely responsible.

(c)Licensee shall indemnify and hold Dyax and its Affiliates, officers, directors, employees and agents harmless from and against any liability, damage, loss or expense (including reasonable attorney fees and expenses of litigation) incurred by any such party to Licentia and/or Kari Alitalo under or arising out of the Licentia Agreement, to the extent that such liability, damage, loss or expense was incurred by any such party as a result of a breach of any of the terms of this Agreement or the Licentia Agreement by Licensee.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

8

(d)Licentia and Kari Alitalo shall each be a third party beneficiary of the Licentia Sublicense and shall have the right to enforce the terms of this Section 2.4 (and claim damages as a result of any breach) directly against Licensee.

2.5Restrictions Applicable to the XOMA Covenant.  Licensee acknowledges and agrees that:

(a)Licensee has received from Dyax a copy of the XOMA Agreement;

(b)Licensee’s rights under the XOMA Covenant are subject to all of the limitations, restrictions and other obligations contained in the XOMA Agreement that are applicable to a Dyax Collaborator who has received Licensed Immunoglobulin (as such terms are defined in the XOMA Agreement), including those provisions set forth in Section 2.5(a)(i)-(viii) thereof;

(c)the XOMA Covenant, as extended to Licensee, shall not apply to use of the XOMA Expression Technology (as such term is defined in the XOMA Agreement) and Dyax has not provided to Licensee any know-how or materials relating to the XOMA Expression Technology; and

(d)Dyax shall have the right to deliver to XOMA a written report which shall specify the name, address and contact person for Licensee as required by Section 2.6(a) of the XOMA Agreement.

2.6Reservation of Rights. No right or license under any intellectual property right Controlled by either Party is granted or implied except as expressly granted in this Agreement. Except for the rights specifically granted in this Agreement, each Party expressly reserves all rights Controlled by it or its Affiliates to all its products and intellectual property, and reserves the right to utilize or allow its Affiliates or Third Parties to utilize such products and intellectual property rights in any manner not conflicting with the terms of this Agreement, including without limitation, to perform any applicable obligations under this Agreement.

ARTICLE 3

TRANSFER OF MANUFACTURING TECHNOLOGY

AND LICENSED ANTIBODY MATERIALS

3.1Transfer of Manufacturing Technology.  As soon as practicable but in any case no later than [*****] after the Effective Date, Dyax shall deliver and assign to Licensee the technology Controlled by Dyax necessary for the manufacture of Licensed Products. This technology transfer shall comprise, inter alia:

(a)the assignment of the Lonza Agreement to Licensee; and

(b)the transfer and assignment to Licensee of the Cell Lines together with all Know-How, other intellectual property, scientific data and other material documents relating to the Cell Lines, that are Controlled by Dyax.

3.2Transfer of DX-2240 Inventory and DX-2240 Know How.  As soon as practicable but in any case no later than [*****] after the Effective Date, Dyax shall deliver and assign to Licensee the DX-2240 Inventory, and

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

9

shall deliver all DX-2240 Know-How. In consideration for the transfer of the DX-2240 Inventory, Licensee shall pay to Dyax the DX-2240 Inventory fee set forth in Section 5.2.

3.3Delivery. The technology, materials and associated data and documents that are to be transferred to Licensee under Sections 3.1 and 3.2 shall be deemed delivered hereunder upon Dyax’s tender to a carrier reasonably designated by Licensee.

3.4Additional Efforts.  Dyax further agrees to cause to be performed such other lawful acts and to be executed such further assignments and other lawful documents as Licensee may reasonably require in order to complete and fully document the transfers and assignments required under Sections 3.1 and 3.2.  Furthermore, subject to reasonable availability, Dyax will make its employees and relevant consultants reasonably available to Licensee for [*****] following receipt by Licensee of the Know-How controlled by Dyax  to consult with qualified personnel of Licensee on issues and questions related to technology, materials and associated data and documents that are to be transferred and assigned to Licensee under Sections 3.1 and 3.2, provided that in no event shall Dyax be obligated to provide free of charge  more than three (3) FTE hours per week of assistance to Licensee hereunder. If Licensee requests additional assistance, the corresponding FTE’s hours shall be invoiced by Dyax to Licensee at a rate of [*****] per FTE hour.  In no case such additional assistance will represent more than ten (10) FTE hours per week, unless the Parties have previously agreed that more assistance will be required and provided.

ARTICLE 4

LICENSEE’S DILIGENCE OBLIGATIONS

4.1Diligence Requirements.  As between Dyax and Licensee, Licensee shall be solely responsible, at its sole expense, for the research, development, manufacture and commercialization of Licensed Products  Licensee shall use Commercially Reasonable and Diligent Efforts to research, develop, manufacture and commercialize Licensed Products .  Once an IND has been filed for DX-2240, Commercially Reasonable and Diligent Efforts will be deemed satisfied if, during any given calendar year, Licensee:

(a)is manufacturing a Licensed Product for a clinical trial under an approved IND;

(b)is actively conducting a Phase I, II or III Clinical Trial with respect to a Licensed Product (which may consist of any activity such as  recruiting patients or analyzing data) ;

(c)has filed for Marketing Authorization for a Licensed Product in any Major Market Country;

(d)is pursuing a filed application for Marketing Authorization for a Licensed Product in any Major Market Country;

(e)has received approval for Marketing Authorization for a Licensed Product in any Major Market Country; or

(f)has launched or is selling a Licensed Product in a Major Market Country.

4.2Annual Report.  Within [*****] after the end of each calendar year following the Effective Date until the first filing for Marketing Authorization of a Licensed Product, Licensee shall provide Dyax with a written report to keep Dyax informed about the progress of Licensee’s activities in connection with the Licensee development

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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activities for the Licensed Product, and such report shall specifically identify how Licensee complied with its diligence obligations under Section 4.1; provided that such reports shall not be required to include any non-public technical or scientific information.

4.3Remedy for Failing to Meet Obligations; Procedure.  In the event that Dyax believes that Licensee has failed to comply with its due diligence obligations under Section 4.1, Dyax shall notify Licensee in writing.  Such notification will constitute a notice of termination under Section 11.2 and this Agreement will be terminated upon the expiration of the [*****] period provided within Section 11.2, unless Licensee (a) pays Dyax a diligence extension fee of [*****], or (b) by written notice, reasonably disputes that it has failed to comply with its due diligence obligations and provides Dyax with specific documents evidencing how Licensee complied with its due diligence obligations under Section 4.1.  If Dyax receives notice that Licensee reasonably disputes that it has failed to comply with its due diligence obligations under Section 4.1, Dyax shall have the right to request arbitration (in accordance with Article 10.2), and if Dyax requests such arbitration, this Agreement shall be terminated pursuant to Section 4.3 if and when, in such arbitration, there is a final determination that Licensee has failed to comply with its diligence obligations under Section 4.1.

ARTICLE 5

FINANCIAL TERMS

5.1License Fees.  Within [*****] following the Effective Date, Licensee shall pay to Dyax an upfront license fee in the amount of [*****].

5.2Inventory Supply Fee.  Within [*****] following Dyax’s delivery to Licensee of Dyax’s DX-2240 Inventory in accordance with Section 3.2 and an applicable invoice, Licensee shall pay to Dyax an inventory supply fee as consideration for Dyax having manufactured the DX-2240 Inventory, which the Parties have agreed to be [*****].

5.3IND Pharmacology Report Milestone.  Within [*****] following Licensee receipt from Dyax of the reports outlined in Appendix I, Licensee shall pay Dyax a milestone payment of  [*****].

5.4Development Milestones.  Within [*****] of the first occurrence of each of the following events with respect to the first  Licensed Product, Licensee shall make the following payments to Dyax:

Milestone Event		Payment
(a)	Upon dosing of first patient in a Phase I (or equivalent) Clinical Trial	[*****]
(b)	Upon dosing of first patient in a Phase II (or equivalent) Clinical Trial	[*****]
(c)	Upon dosing of first patient in a Phase III (or equivalent) Clinical Trial	[*****]
(d)	Upon first filing for Marketing Authorization with FDA	[*****]
(e)	Upon first filing for Marketing Authorization with EMEA	[*****]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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(f)	Upon first filing for Marketing Authorization in Japan	[*****]
(g)	Upon approval for Marketing Authorization from FDA	[*****]
(h)	Upon approval for Marketing Authorization from EMEA	[*****]
(i)	Upon approval for Marketing Authorization in Japan	[*****]

Upon the second occurrence of the foregoing events by Licensee or its Related Parties with respect to a Licensed Product (as a result of development in second Indication), the development milestone payments in the above chart shall be reduced by [*****]. Upon the third occurrence of the foregoing events by Licensee or its Related Parties with respect to a Licensed Product (as a result of development in a third Indication), the development milestone payments in the above chart shall be reduced by [*****].   No development milestone payments shall be due (i) beyond the third occurrence of the forgoing events with respect to the fist Licensed Product and (ii) upon the occurrence of any events  with respect to any other Licensed Product than the first Licensed Product.

5.5Sales Milestones.  Within [*****] of the first occurrence of each of the following events with respect to all Licensed Products, Licensee shall make the following payments to Dyax, it being expressly understood and agreed that each of the following sales milestones shall be due one time only:

Milestone Event		Payment
(a)	Total Annual Net Sales for all Licensed Products exceeds [*****]	[*****]
(b)	Total Annual Net Sales for all Licensed Products exceeds [*****]	[*****]

5.6Royalties.  Licensee shall pay to Dyax the following royalties on Net Sales of Licensed Products:

Annual Net Sales Worldwide for all Licensed Products		Royalty Rate
(a)	Portion < [*****] in a calendar year	[*****]
(b)	Portion > [*****] but < [*****] in a calendar year	[*****]
(c)	Portion > [*****] in a calendar year	[*****]

5.7Duration of Royalty Payments.  The royalties payable by Licensee to Dyax pursuant to Section 5.6 hereof shall be payable on a country-by-country and Licensed Product-by-Licensed Product basis for a period commencing with the First Commercial Sale in the relevant country and ending on the later of:

(a)ten (10) years after First Commercial Sale; or

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(b)the expiration of the last Valid Claim to expire under the DX-2240 Patent Rights, CAT Patents and Licentia Patents in such country.

At the expiration of the aforesaid period, Licensee shall have a fully-paid up license.

5.8Product Patent Expiration; Generic Competition.

(a)On a Product-by-Product and country-by-country basis, if at any time during  the royalty period outlined in Section 5.7 above, one or more biogeneric products containing DX-2240 are commercialized by a Third Party in such country and represent during a consecutive  three month period [*****] or more of the total market in such country, measured by the number of units sold (or in the absence of such data in any country or countries, any other mean of measurement which the parties will agree on in good faith,  but excluding sales) (such date, the “Generic Competition Date”), the royalty rates set forth in Section 5.6 above  shall be substituted, with respect to Net Sales occurring in such country, by reduced royalty rates  as set forth in Section (b) below.

(b)From and after the Generic Competition Date, and as long as Generic Competition continues, and until expiration of the royalty duration set forth in Section 5.7, Licensee shall pay the following royalties to Dyax with respect to Net Sales of Licensed Product(s)

(i)The royalty due under Section 5.6(a) above [*****] shall be [*****];

(ii)The royalty due under Section 5.6(b) above [*****] shall be [*****]; and

(iii)The royalty due under Section 5.6(c) above [*****] shall be [*****].

5.9           Deductions.

(a)In the event that Licensee must obtain a license to any intellectual property that [*****], then Licensee shall be entitled to deduct [*****] of the royalties paid to such Third Parties from the royalty due to Dyax under Section 5.6.

(b)Furthermore, in the event that Licensee must obtain a license to any intellectual property that [*****], then Licensee shall be entitled to deduct [*****] of the royalties paid to such Third Parties from the royalty due to Dyax under Section 5.6; provided however, that such deduction may not operate to reduce any royalty due to Dyax under any royalty tier set forth in Section 5.6 above by more than [*****] in any calendar year.

(c)Except as set forth above, Licensee shall not be entitled to deduct any royalties that may be due to any Third Party in connection with the development, manufacture, use or sale of any Licensed Product against any royalties due to Dyax under this Agreement.  Licensee shall be responsible for any and all fees, royalties and other payments that may be due to any Third Party for any Licensed Product, provided that Dyax shall be responsible for the payment of all fees, royalties and other payments due under the CAT Product License, the Licentia Agreement and the XOMA Agreement (which, for clarity, the

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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Parties acknowledge and agree may not be deducted by Licensee under the terms of Section 5.9(a) or (b)).

(d)All fees payable by Licensee under this Article 5 are non-refundable and, unless otherwise expressly provided, may not be credited against any other sums which may be payable by Licensee under this Agreement.

5.10         Reports, Payments, Records and Audits.

(a)Licensee shall make the payments due to Dyax under this Article 5 in United States Dollars.  Where the payments due to Dyax under this Article 5 are being converted from a currency other than United States Dollars, Licensee will use the conversion rate reported in The Wall Street Journal  two (2) business days before the day on which Licensee pays Dyax.  Such payment will be made without deduction of exchange, collection or other charges.

(b)All royalty payments will be made at Quarterly intervals.  Within [*****] of the end of each Quarter after the First Commercial Sale of each Licensed Product in any country, Licensee shall prepare a statement which shall show on a country-by-country basis for the previous Quarter Net Sales of each Licensed Product by Licensee or its Related Parties and all monies due to Dyax based on such Net Sales.  That statement shall include details of Net Sales broken down to show the country of the sales and the total Net Sales by Licensee or its Related Parties in such country and shall be submitted to Dyax within such [*****] period together with remittance of the monies due.

(c)All payments shall be made free and clear of and without deduction or deferment in respect of any disputes or claims whatsoever and/or as far as is legally possible in respect of any taxes imposed by or under the authority of any government or public authority.  Any tax (other than VAT) which Licensee is required to pay or withhold with respect of the payments to be made to Dyax hereunder shall be deducted from the amount otherwise due provided that, in regard to any such deduction, Licensee shall give Dyax such assistance, which shall include the provision of such documentation as may be required by any revenue authority and other revenue services, as may reasonably be necessary to enable Dyax to claim exemption therefrom or obtain a repayment thereof or a reduction thereof and shall upon request provide such additional documentation from time to time as is needed to confirm the payment of tax.  If by law, regulation or fiscal policy of a particular country, a remittance of royalties in the currency stipulated in Section 5.9(a) above is restricted or forbidden, notice thereof will be promptly given to Dyax, and payment of the royalty shall be made by the deposit thereof in local currency to the credit of Dyax in a recognized banking institution designated by Dyax or its Affiliates.  When in any country a law or regulation that prohibits both the transmittal and deposit of such payments ceases to be in effect, all royalties or other sums that Licensee would have been under obligation to transmit or deposit but for the prohibition, shall forthwith be deposited or transmitted promptly to the extent allowable.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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(d)Licensee shall keep and shall procure that its Related Parties keep true and accurate records and books of account containing all data necessary for the calculation of the amounts payable by it to Dyax pursuant to this Agreement.  Those records and books of account shall be kept for [*****] following the end of the calendar year to which they relate.  Upon Dyax’s written request, a firm of accountants appointed by agreement between the Parties or, failing such agreement within [*****] of the initiation of discussions between them on this point Dyax shall have the right to cause an international firm of independent certified public accountants that has not performed auditing or other services for either Party or their Affiliates and is acceptable to Licensee, such acceptance not to be unreasonably withheld, to inspect such records and books of account.  In particular such firm:

(i)shall be given access to and shall be permitted to examine and copy such books and records of Licensee and its Related Parties upon [*****] notice having been given by Dyax and at all reasonable times on business days for the purpose of certifying that the Net Sales or other relevant sums calculated by Licensee and its Related Parties during any calendar year were reasonably calculated, true and accurate or, if this is not their opinion, certify the Net Sales figure or other relevant sums for such period which in their judgment is true and correct;

(ii)prior to any such examination taking place, such firm of accountants shall undertake to Licensee that they shall keep all information and data contained in such books and records, strictly confidential and shall not disclose such information or copies of such books and records to any third person including Dyax, but shall only use the same for the purpose of calculations which they need to perform in order to issue the certificate to which this Section envisages;

(iii)any such access examination and certification shall occur no more than once per calendar year;

(iv)Licensee and its Related Parties shall make available personnel to answer queries on all books and records required for the purpose of that certification; and

(v)the cost of the accountant shall be the responsibility of Licensee if the certification shows it to have underpaid monies to Dyax by more than [*****] and the responsibility of Dyax otherwise.

(e)All payments due to Dyax under the terms of this Agreement are expressed to be exclusive of value added tax (VAT) howsoever arising.  If Dyax is required to charge VAT on any such payment, Dyax will notify Licensee.  Licensee will then use all commercially reasonable endeavors to obtain a VAT registration as soon as reasonably possible in order to allow it to reclaim any VAT so chargeable.  If Licensee does obtain a VAT registration then VAT will be added to any relevant payment at the applicable rate.  If having used all commercially reasonable endeavors Licensee is not able to reclaim the VAT (in whole or in part) the Parties agree that the amount of any VAT payable will be shared between them equally.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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5.11Payments Made by Wire Transfer.  All payments made to Dyax under this Agreement shall be made by wire transfer to the following bank account of Dyax, or such other bank account as notified by Dyax to Licensee from time to time:

[*****]

5.12Late Payments.  If Licensee fails to make any payment to Dyax hereunder on the due date for payment, without prejudice to any other right or remedy available to Dyax it shall be entitled to charge Licensee interest (both before and after judgment) of the amount unpaid at the annual rate of LIBOR (London Interbank Offering Rate) plus [*****] calculated on a daily basis until payment in full is made without prejudice to Dyax’s right to receive payment on the due date.

ARTICLE 6

INTELLECTUAL PROPERTY

6.1Ownership.   As between the Parties, and subject to the licenses granted in Section 2.1, ownership of certain intellectual property shall be determined as follows:

(a)DX-2240 IP. Dyax shall own the DX-2240 IP, whether or not conceived, reduced to practice or otherwise made by personnel of Licensee or its Related Parties, either solely or jointly with Dyax personnel; and

(b)Licensed Product IP.  Licensee shall own the Licensed Product IP.

Licensee shall, and shall cause its Related Parties to, assign all DX-2240 IP to Dyax and shall take all steps necessary to effect such assignment.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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6.2Patent Filing, Prosecution and Maintenance.

(a)DX-2240 Patent Rights.  Licensee shall have the first right at its sole expense, using counsel selected at Licensee’s sole discretion, to prepare, file, prosecute, maintain and obtain extensions of the DX-2240 Patent Rights in countries of Licensee’s choice in Dyax’s name.  Licensee shall provide Dyax with an annual report on or before each December 1 during the term of this Agreement summarizing the patent filings, prosecutions or other proceedings and will provide Dyax with copies of all material communications, search reports and Third Party observations submitted to or received from applicable patent offices.  Licensee shall consider in good faith Dyax’s reasonable comments related thereto, if any, provided that final decisions will be made solely by Licensee. If Licensee elects not to prosecute or maintain any patent or patent application within the DX-2240 Patent Rights for any reason, Licensee shall give Dyax notice thereof at least [*****] prior to allowing such patent or patent application to lapse or become abandoned or unenforceable, and Dyax shall thereafter have the right, at its sole expense, to prosecute and maintain such patent or patent application. Except in case of willful misconduct, Licensee shall in no case incur any liability to Dyax in relation to its activities under this Section 6.2(a).

(b)Third Party Patent Rights.  The preparation, filing, prosecution and maintenance of the CAT Patent Rights, Licentia Patent Rights and XOMA Patent Rights shall be addressed in accordance with the terms of the CAT Product License, Licentia Agreement and XOMA Agreement, as applicable.

(c)Licensed Product Patent Rights.  Licensee shall be solely responsible, at its sole discretion and expense, for the prosecution, defense and maintenance of the Licensed Product Patent Rights.

(d)Cooperation. Each Party agrees to cooperate with, and perform such lawful acts and execute such documents in order to reasonably assist, the other with respect to the preparation, filing, prosecution, defense and maintenance of patents and patent applications pursuant to this Section 6.2.  Furthermore, the Parties shall cooperate with each other in gaining patent term extensions wherever applicable to the DX-2240 Patent Rights.

6.3           Third Party Infringement.

(a)Notice.  Each Party shall promptly report in writing to the other Party if (i) such Party becomes aware of any alleged or threatened infringement of any Patent Rights or Know-How licensed hereunder that could affect the development of any Licensed Product of which such Party becomes aware, or (ii) either Party shall be individually named as a defendant in a legal proceeding by a Third Party for infringement of a patent because of the manufacture, use or sale of any Licensed Product, or because of attempts to invalidate any patents or patent applications for which it is responsible pursuant to this Article 6.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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(b)Initial Right to Enforce.  Subject to Section 6.3(c) below and the applicable provisions of the CAT Product License, Licentia Agreement and the XOMA Agreement, (i) Licensee shall have the first right to initiate a suit or take other appropriate action that it believes is reasonably required to protect (i.e., prevent or abate actual or threatened infringement or misappropriation of) or otherwise enforce the Patent Rights, Know-How and other intellectual property licensed to Licensee under this Agreement.

(c)Step-In Right.  Subject to the applicable provisions of the CAT Product License, Licentia Agreement and the XOMA Agreement, if the Licensee fails to initiate a suit or take other appropriate action that it has the initial right to initiate or take pursuant to Section 6.3(b) above within [*****] after becoming aware of the basis for such suit or action, then Dyax may, in its discretion, provide the Licensee with written notice of such its intent to initiate a suit or take other appropriate action to protect or otherwise enforce the Patent Rights, Know-How and other intellectual property licensed to Licensee under this Agreement.  If Dyax provides such notice and the Licensee fails to initiate a suit or take such other appropriate action within [*****] after receipt of such notice from Dyax, then Dyax shall have the right to initiate a suit or take other appropriate action that it believes is reasonably required to protect or otherwise enforce the Patent Rights, Know-How and other intellectual property licensed to Licensee under this Agreement. Notwithstanding the foregoing, if in any country the law requires that any suit or other action be initiated and prosecuted by the patentee, and consequently Licensee cannot be the initiating and prosecuting party, Dyax shall, if Licensee so requests, initiate and prosecute such suit or other action that Licensee believes appropriate. In that case, Licensee would reimburse Dyax’ reasonable out-of-pocket expenses incurred in initiating and prosecuting such suit or other action, as if Licensee was the initiating party, as described in Section 6.3 (d) below.

(d)Conduct of Certain Actions; Costs.  The Party initiating suit shall have the sole and exclusive right to select counsel for any suit initiated by it pursuant to Section 6.3(b) or 6.3(c).  If required under applicable law in order for the initiating Party to initiate and/or maintain such suit, the other Party shall join as a party to the suit.  Such other Party shall offer reasonable assistance to the initiating Party in connection therewith at no charge to the initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred in rendering such assistance.  The initiating Party shall assume and pay all of its own out-of-pocket costs incurred in connection with any litigation or proceedings initiated by it pursuant to Sections 6.3(b) and 6.3(c), including without limitation the fees and expenses of the counsel selected by it.  The other Party shall have the right to participate and be represented in any such suit by its own counsel at its own expense.

(e)Recoveries.  With respect to any suit or action referred to in Sections 6.3(b), any recovery obtained as a result of any such proceeding, by settlement or otherwise, shall be applied in the following order of priority:

(i)first, the Parties shall be reimbursed for all costs incurred in connection with such proceeding paid by the Parties and not otherwise recovered; and

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(ii)second, any remainder shall be treated as if it were Net Sales of the applicable Licensed Product, subject to the sales milestone and royalty provisions of Section 5.5 and 5.6.

ARTICLE 7

CONFIDENTIALITY  AND PUBLICITY

7.1Confidential Information.  During the term of this Agreement and for a period of [*****] after any termination or expiration thereof, each Party agrees to keep in confidence and not to disclose to any Third Party, or use for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement, any Confidential Information of the other Party.  As used herein, “Confidential Information” shall mean all trade secrets or confidential or proprietary information designated as such in writing by the disclosing Party, whether by letter or by the use of an appropriate stamp or legend, prior to or at the time any such trade secret or confidential or proprietary information is disclosed by the disclosing Party to the receiving Party.  Notwithstanding the foregoing, information which is orally or visually disclosed to the receiving Party by the disclosing Party, or is disclosed in writing without an appropriate letter, stamp or legend, shall constitute Confidential Information if (i) it would be apparent to a reasonable person, familiar with the disclosing Party’s business and the industry in which it operates, that such information is of a confidential or proprietary nature, the maintenance of which is important to the disclosing Party, or if (ii) the disclosing Party, within [*****] after such disclosure, delivers to the receiving Party a written document or documents describing such information and referencing the place and date of such oral, visual or written disclosure and the names of the employees or officers of the receiving Party to whom such disclosure was made.  The restrictions on the disclosure and use of Confidential Information set forth in the first sentence of this Section 7.1 shall not apply to any Confidential Information that:

(a)was known by the receiving Party prior to disclosure by the disclosing Party hereunder (as evidenced by the receiving Party’s written records);

(b)is or becomes part of the public domain through no fault of the receiving Party;

(c)is disclosed to the receiving Party by a Third Party having a legal right to make such a disclosure without violating any confidentiality or non-use obligation that such Third Party has to the disclosing Party; or

(d)is independently developed by the receiving Party (as evidenced by the receiving Party’s written records).

Notwithstanding the obligations of confidentiality and non-use set forth above, a receiving Party may provide Confidential Information disclosed to it to (x) governmental or other Regulatory Authorities in order to obtain, maintain or defend patents or to gain or maintain approval to conduct clinical studies or to otherwise develop, manufacture or commercialize a Licensed Product; provided, that such disclosure shall be subject to the prior written consent of the Party whose Confidential Information is intended to be disclosed (which consent shall not be unreasonably withheld or delayed), and such Confidential Information shall be disclosed only to the extent reasonably necessary to obtain, maintain or defend  patents or authorizations, (y) the extent required by applicable law, including without limitation by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity, (z)

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any bona fide actual or prospective underwriters, investors, lenders or other financing sources or bona fide actual or prospective collaborators or strategic partners who are obligated to keep such information confidential, to the extent reasonably necessary to enable such actual or prospective underwriters, investors, lenders or other financing sources or collaborators to determine their interest in underwriting or making an investment in, or otherwise providing financing to, or collaborating with the receiving Party.  In addition, if either Party is required to disclose Confidential Information of the other Party by regulation, law or legal process, including without limitation by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity, such Party shall provide prior notice of such intended disclosure to such other Party if practicable under the circumstances and shall disclose only such Confidential Information of such other Party as is required to be disclosed. Licensee acknowledges and agrees that Dyax shall also be permitted to disclose this Agreement in confidence to the extent reasonably necessary to comply with Dyax’s obligations pursuant to the CAT Product License, Licentia Agreement and XOMA Agreement.

7.2Related Party, Employee, Consultant and Advisor Obligations.  Each Party agrees that it and its Affiliates shall provide or permit access to Confidential Information received from the other Party only to the receiving Party’s employees, consultants, advisors and permitted subcontractors who have a need to know such Confidential Information to assist the receiving Party with the development, manufacturing and commercialization of a Licensed Product and the activities contemplated by this Agreement and who are subject to obligations of confidentiality and non-use with respect to such Confidential Information similar to the obligations of confidentiality and non-use of the receiving Party pursuant to Section 7.1; provided, that Dyax and Licensee shall each remain responsible for any failure by its Affiliates, and its Affiliates’ respective employees, consultants, advisors and permitted subcontractors, sublicensees and sub-distributors, to treat such Confidential Information as required under Section 7.1 (as if such Affiliates, employees, consultants, advisors and permitted subcontractors, sublicensees and sub-distributors were Parties directly bound to the requirements of Section 7.1).

7.3Injunctive Relief.  The Parties acknowledge that money damages alone would not adequately compensate the disclosing Party in the event of a breach by the receiving Party of this Article 7, and that, in addition to all other remedies available to the disclosing Party at law or in equity, it shall be entitled to seek injunctive relief for the enforcement of its rights under this Article 7.

7.4Liability.  A Party shall be liable for a breach of the obligations of this Article 7 by an Affiliate, sublicensee, director, officer, employee, consultant or agent of such party.

7.5Return of Confidential Information.  Upon termination of this Agreement, upon the request of the disclosing Party, the receiving Party shall promptly return to the disclosing Party or destroy the disclosing Party’s Confidential Information, including all copies thereof, except to the extent that retention of such Confidential Information is reasonably necessary for the receiving Party to exploit any continuing rights it may have and/or to fulfill its obligations contemplated hereby, including its obligations of non-disclosure and non-use hereunder.  Any such destruction requested by the disclosing Party shall be certified in writing to the disclosing Party by an authorized officer of the receiving Party.  The return and/or destruction of such Confidential Information as provided above shall not relieve the receiving Party of its other obligations under this Agreement.

7.6Publicity.  No public announcement or other disclosures concerning the terms of this Agreement shall be made to a Third Party, whether directly or indirectly, by either Party (except confidential disclosures to those parties described in Section 7.1(b)) without first obtaining the approval of the other Party and agreement upon the nature and text of such announcement or disclosure except that: (a) a Party may disclose those terms which it is

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required by regulation or law to disclose, provided that it takes advantage of all provisions to keep confidential as many terms as possible; and (b) a Party desiring to make such public announcement or other public disclosure shall obtain the consent of the other Party to the proposed announcement or public disclosure prior to public release.  Each Party agrees that it shall cooperate fully with the other with respect to all disclosures regarding this Agreement as required under the regulations of the U.S.  Securities and Exchange Commission, applicable stock exchanges, NASDAQ and any other comparable foreign body including requests for confidential information or proprietary information of either Party included in any such disclosure. Licensee agrees that Dyax may include Licensee on a list of Dyax licensees.  Dyax agrees that Licensee, and its Sublicensees may state that they are licensed under the rights hereunder.  The Parties agree to release a mutually agreeable press release within two (2) days of executing this Agreement.

7.7Publication.  In the event that either Party (the “Publishing Party”) wishes to publish, in oral or written form, any Confidential Information of the other Party (the “Non-Publishing Party”), such Party will promptly notify the Non-Publishing Party and provide the Non-Publishing Party with a written copy of the proposed publication prior to its submission for publication. At the Non-Publishing Party’s request, the Publishing Party will delay publication in order to permit the Non-Publishing Party to take the steps necessary to secure rights to any intellectual property arising from the Publishing Party’s use of Confidential Information, including the filing of one or more patent applications.  In no event will such delay exceed ninety (90) days from the date the Non-Publishing Party receives a written copy of the proposed publication.  If the Non-Publishing Party makes such a request, the Publishing Party agrees to cooperate with the Non-Publishing Party in securing such intellectual property rights using the Non-Publishing Party’s choice of counsel and the Non-Publishing Party will bear all costs of such filing.   No patent application describing an invention resulting from the Publishing Party’s use of Confidential Information will be filed or caused to be filed by the Publishing Party without first notifying the Non-Publishing Party as described above for proposed publications. Any publication or patent application will acknowledge the Non-Publishing Party’s contribution.  No publication or patent application will disclose any Confidential Information of a Party without the prior written permission of that Party.

ARTICLE 8

REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS

8.1Exclusivity Covenant. During the term of this Agreement, Licensee shall refrain from engaging in clinical development or commercialization of [*****].

8.2Representations of Authority.  Dyax and Licensee each represents and warrants to the other Party that, as of the Effective Date, it has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement.

8.3Consents.  Dyax and Licensee each represents and warrants to the other Party that, except for any regulatory approvals, pricing and/or reimbursement approvals, manufacturing approvals and/or similar approvals necessary for the development, manufacture or commercialization of any Licensed Product, all necessary consents, approvals and authorizations of all government authorities and other persons required to be obtained by it as of the Effective Date in connection with the execution, delivery and performance of this Agreement have been obtained.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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8.4No Conflict.  Dyax and Licensee each represents and warrants to the other Party that, notwithstanding anything to the contrary in this Agreement, the execution and delivery of this Agreement by such Party, the performance of such Party’s obligations hereunder and the licenses and sublicenses to be granted by such Party pursuant to this Agreement (a) do not conflict with or violate any requirement of any laws, rules or regulations existing as of the Effective Date and applicable to such Party and (b) do not conflict with, violate, breach or constitute a default under any contractual obligations of such Party or any of its Affiliates existing as of the Effective Date.

8.5Enforceability.  Dyax and Licensee each represents and warrants to the other Party that, as of the Effective Date, this Agreement is a legal and valid obligation binding upon it and is enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other applicable laws affecting creditors’ rights generally or by the availability of equitable remedies.

8.6[*****]

8.7[*****]

8.8No Warranties.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY, AND EACH PARTY HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO THE COMPOUND AND THE PRODUCT.  EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THE PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL.

8.9Limitation of Liability.  Neither Party shall have a right to or shall claim special, indirect or consequential damages, including lost profits, for breach of this Agreement against the other Party.  Except for breaches by Dyax of the representations, warranties and covenants set forth in Section 8.6 and 8.7, remedies for breach of this Agreement shall be limited to claims for amounts due hereunder or as otherwise provided in this Agreement, including claims for indemnification as provided in Article 12 hereof.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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ARTICLE 9

INDEMNIFICATION

9.1Indemnification.

(a)By Licensee. Licensee will defend, indemnify and hold harmless Dyax, its Affiliates and their respective directors, officers, employees and agents (the “Dyax Indemnified Parties”) from and against all claims, demands, liabilities, damages, penalties, fines, costs and expenses, including reasonable attorneys’ and expert fees and costs, and costs or amounts paid to settle (collectively, “Losses”), arising from or occurring as a result of a Third Party’s claim (including any Third Party product liability or infringement claim), action, suit, judgment or settlement to the extent such Losses are due to or based upon:

(i)the gross negligence, recklessness, bad faith, intentional wrongful acts or omissions or violations of applicable law or regulation by or of Licensee, its Related Parties, wholesale distributors, contractors or their respective directors, officers, employees or agents, including, without limitation, in connection with the development, manufacture or commercialization of any Licensed Product by Licensee, its Related Parties, wholesale distributors or contractors; or

(ii)the material breach by Licensee of the terms of, or the material inaccuracy of any representation or warranty made by it in, this Agreement; or

(iii)the development, manufacture or commercialization of any Licensed Product by Licensee or its Related Parties, wholesale distributors or contractors, except to the extent that such Losses arise out of, and are allocable to, the gross negligence, recklessness, bad faith, intentional wrongful acts, omissions or violations of law or breach of this Agreement committed by the Dyax Indemnified Parties.

(b)By Dyax. Dyax will defend, indemnify and hold harmless Licensee, its Related Parties and their respective directors, officers, employees and agents (the “Licensee Indemnified Parties”) from and against all Losses arising from or occurring as a result of a Third Party’s claim (including any Third Party product liability or infringement claim), action, suit, judgment or settlement that is due to or based upon the material breach by Dyax of the terms of, or the material inaccuracy of any representation or warranty made by it in, this Agreement.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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(c)Claims for Indemnification.

(i)A person entitled to indemnification under this Section 9.1 (an “Indemnified Party”) shall give prompt written notification to the person from whom indemnification is sought (the “Indemnifying Party”) of the commencement of any action, suit or proceeding relating to a Third Party claim for which indemnification may be sought or, if earlier, upon the assertion of any such claim by a Third Party (it being understood and agreed, that the failure by an Indemnified Party to give notice of a Third Party claim as provided in this Section 9.1 shall relieve the Indemnifying Party of its indemnification obligation under this Agreement unless the Indemnified Party can demonstrate that such failure to give notice has not resulted in any prejudice to the Indemnifying party. ).

(ii)Within [*****] after receipt of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such action, suit, proceeding or claim with counsel of its choice.  If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense.

(iii)The Party not controlling such defense may participate therein at its own expense; provided, that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith; provided further, however, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel in any one jurisdiction for all Indemnified Parties.

(iv)The Party controlling such defense shall keep the other Party advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider reasonable recommendations made by the other Party with respect thereto.

(v)The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld.  The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that imposes any liability or obligation on the Indemnified Party without the prior written consent of the Indemnified Party.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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ARTICLE 10

DISPUTE RESOLUTION

10.1Resolution by Executives.  Any dispute, controversy or claim initiated by either Party arising out of, or resulting from the breach or alleged breach by either Party of its obligations under this Agreement (other than bona fide Third Party actions or proceedings filed or instituted in an action or proceeding by a Third Party against a Party to this Agreement), whether before or after termination of this Agreement, shall be in the first instance referred to the respective chief executive officers of the Parties.

10.2Arbitration.  If chief executive officers (or their representatives, it being agreed that the chief executive officer of either Party may designate a representative, provided such representative is empowered with decision making in the dispute)  of the Parties fail to resolve any dispute as provided in Section 10.1 within [*****], then such dispute shall be finally resolved by binding arbitration as follows:

(a)A Party may submit such dispute to arbitration by notifying the other Party, in writing, of such dispute.  Within [*****] after receipt of such notice, the Parties shall designate in writing a single arbitrator to resolve the dispute; provided, however, that if the Parties cannot agree on an arbitrator within such [*****] period, the arbitrator shall be selected by the [*****] of the American Arbitration Association (the “AAA”).  The arbitrator shall be a lawyer or any other expert knowledgeable and experienced in the subject matter of the dispute, and shall not be an Affiliate, employee, consultant, officer, director or stockholder of either Party or of an Affiliate of either Party.

(b)Within [*****] after the designation of the arbitrator, the arbitrator and the Parties shall meet, at which time the Parties shall be required to set forth in writing all disputed issues and a proposed ruling on the merits of each such issue.

(c)The arbitrator shall set a date for a hearing, which shall be no later than [*****] after the submission of written proposals pursuant to Section 10.2(b), to discuss each of the issues identified by the Parties.  The Parties shall have the right to be represented by counsel.  Except as provided herein, the arbitration shall be governed by the Commercial Arbitration Rules of the AAA; provided, however, that the Federal Rules of Evidence shall apply with regard to the admissibility of evidence and the arbitration shall be conducted by a single arbitrator.

(d)The arbitrator shall use his or her best efforts to rule on each disputed issue within [*****] after the completion of the hearings described in this Section 10.2.  The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all Parties.  All rulings of the arbitrator shall be in writing and shall be delivered to the Parties.

(e)The (i) attorneys’ fees of the Parties in any arbitration, (ii) fees of the arbitrator and (iii) costs and expenses of the arbitration shall be borne by the Parties as determined by the arbitrator.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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(f)Any arbitration pursuant to this Section 10.2 shall be conducted in [*****].  Any arbitration award may be entered in and enforced by a court in accordance with Section 12.2.

(g)Nothing in this Section 10.2 shall be construed as limiting in any way the right of a Party to seek injunctive relief with respect to any actual or threatened breach of this Agreement from, or to bring an action in aid of arbitration in, a court in accordance with Section 12.2.  Should any Party seek injunctive relief, then for purposes of determining whether to grant such injunctive relief, the dispute underlying the request for such injunctive relief may be heard by a court in accordance with Section 12.2.

(h)The arbitrator shall not award damages excluded pursuant to Section 8.8.

ARTICLE 11

TERM AND TERMINATION

11.1Term.  This Agreement shall commence on the Effective Date and, unless earlier terminated as provided in this Article 11, shall remain in effect until the expiration of the last royalty obligation to Dyax pursuant to Section 5.7.  Upon expiration of the Agreement, Licensee shall have a fully-paid up license.

11.2Termination Rights.

(a)Termination for Convenience.  Licensee shall have the right to terminate this Agreement at any time after the Effective Date on [*****] prior written notice to Dyax without any liability to Dyax in that respect (other than to perform obligations which survive such termination in accordance with this Agreement)

(b)Termination For Material Breach.  Upon any material breach of this Agreement by a Party (the “Breaching Party”), the other Party (the “Non-Breaching Party”) may terminate this Agreement by providing [*****] prior written notice to the Breaching Party in the case of a breach of a payment obligation and [*****] prior written notice to the Breaching Party in the case of any other material breach.  The termination shall become effective at the end of the notice period unless the Breaching Party cures such breach during such notice period.  Notwithstanding the foregoing, if such breach, by its nature, is incurable, the Non-Breaching Party may terminate this Agreement immediately upon written notice to the Breaching Party.

(c)Termination for Bankruptcy.  A Party may terminate this Agreement should the other Party commit an act of bankruptcy, be declared bankrupt, voluntarily file or have filed against it a petition for bankruptcy or reorganization unless such petition is dismissed within [*****] of filing, enter into a procedure of winding up to dissolution, or should a trustee or receiver be appointed for its business assets or operations. All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for the purposes of Section 365(n) of Title 11, U.S. Code (“Bankruptcy Code”) license rights to “intellectual property” as defined under Section 101(60) of the Bankruptcy Code. The Parties agree that any Party, as a licensee hereunder, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code or any relevant foreign equivalent thereof.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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(d)Challenges of Patent Rights.  In the event that Licensee or its Related Parties (i) commence or participate in any action or proceeding (including, without limitation, any patent opposition or re-examination proceeding), or otherwise assert in writing any claim, challenging or denying the validity of any of the Patent Rights licensed to the Licensee hereunder, or any claim thereof or (ii) actively assist any other Person in bringing or prosecuting any action or proceeding (including, without limitation, any patent opposition or re-examination proceeding) challenging or denying the validity of any of such Patent Rights or any claim thereof, Dyax will have the right to give notice to the Licensee (which notice must be given, if at all, within sixty (60) days after Dyax first learns of the foregoing) that the rights granted to Licensee under such Patent Rights will terminate in [*****] following such notice, and, unless the Licensee or its sublicense (as applicable) withdraws or causes to be withdrawn all such challenge(s) within such [*****] period, such licenses will so terminate.

11.3Consequences of Termination.

(a)Termination by Dyax for Cause.   Without limiting any other legal or equitable remedies that Dyax may have, if Dyax terminates this Agreement in accordance with Sections 11.2(b) or (c), then:

(i)if such termination occurs before Licensee’s first filing with any Regulatory Authority of a protocol for a Phase II Clinical Trial, then Licensee’s obligations under Section 8.1 shall survive for a period of [*****] following such termination;

(ii)Licensee shall as promptly as practicable transfer to Dyax or Dyax’s designee (A) possession and ownership of all governmental or regulatory correspondence, conversation logs, filings and approvals (including all Regulatory Approvals and pricing and reimbursement approvals) relating to the development, manufacture or commercialization of all Licensed Products, (B) copies of all data, reports, records and materials in Licensee’s possession or control relating to the development, manufacture or commercialization of all Licensed Products, including all non-clinical and clinical data relating to any Licensed Products, and (C) all records and materials in Licensee’s possession or control containing Confidential Information of Dyax;

(iii)Licensee shall appoint Dyax as Licensee’s agent for all Licensed Product-related matters involving Regulatory Authorities until all Regulatory Approvals and other regulatory filings have been transferred to Dyax or its designee;

(iv)if the effective date of termination is after First Commercial Sale, then Licensee shall appoint Dyax as its exclusive distributor of the Licensed Product and grant Dyax the right to appoint sub-distributors, until such time as all Regulatory Approvals have been transferred to Dyax or its designee;

(v)if Licensee or its Related Parties are manufacturing Licensed Products, at Dyax’s option, supply the Licensed Products to Dyax at cost plus [*****] or, if termination occurs after the First Commercial Sale, on terms no less favorable than those on which Licensee supplied the Licensed Products prior to such

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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termination to its distributors, until such time as all Regulatory Approvals have been transferred to Dyax or its designee, and Dyax has procured or developed its own source of Licensed Product supply, provided that Dyax can demonstrate is has been diligently seeking an alternative manufacturer and provided further that in any case Licensee’s manufacture and supply obligation shall not continue for more than [*****] from the date of termination of the Agreement;

(vi)if Dyax so requests, Licensee shall transfer to Dyax any Third Party agreement relating to the development, manufacture or commercialization of the Licensed Products to which Licensee is a party, provided that such Third Party agreement permit such a transfer (and Licensee hereby covenants to use commercially reasonable best efforts to ensure that such Third Party Agreements do permit such a transfer); and

(vii)Licensee shall (A) assign ownership of all Licensed Product IP that relates solely to the Licensed Product to Dyax, free and clear of any liens or encumbrances and (B) grant Dyax a non-exclusive right and license, with the right to grant sublicenses, under all other Licensed Product IP for the sole purpose of o developing, manufacturing and commercializing products containing DX-2240 throughout the world. The license granted pursuant to this Section 11.3(a) shall be royalty-free, fully-paid and perpetual, provided however that if Licensee decides to no longer maintain any patent that is part of the Licensed Product IP, Licensee shall notify Dyax thereof and Dyax shall have  [*****] to notify Licensee whether it is interested to have the concerned patent(s) assigned to Dyax or not and if Dyax fails to notify its interest Licensee shall not be obligated to maintain the concerned patent and the license to Dyax shall be terminated as regards such patent(s) . Licensee shall execute all documents and take all such further actions as may be reasonably requested by Dyax in order to give effect to the terms of this Section 11.3(a).

(b)Termination by Licensee for Convenience. If Licensee terminates this Agreement in accordance with Section 11.2(a), then the provisions of Section 11.3(a)(i)-(vii) shall apply.  The licenses granted pursuant to this Section 11.3(b) shall be royalty-free, fully-paid and perpetual; provided, that if the effective date of termination occurs at any time after the Regulatory Approval of a Licensed Product has been obtained from the FDA or the EMEA or in Japan, then Dyax will be obligated to pay Licensee [*****] of the sales milestones and royalties with respect to Net Sales specified in Sections 5.5 and 5.6.  Licensee shall execute all documents and take all such further actions as may be reasonably requested by Dyax in order to give effect to the terms of this Section 11.3(b).

(c)Termination by Licensee for Cause.  Without limiting any other legal or equitable remedies that Licensee may have, if Licensee terminates this Agreement in accordance with Sections 11.2(b) or (c), all rights, licenses and sublicenses granted to Licensee hereunder shall terminate and Licensee shall immediately cease any and all activities relating to the development, manufacture or commercialization of the Licensed Products; and shall, as directed by Dyax, return to Dyax or destroy all DX-2240 Know-How and other Confidential

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

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Information of Dyax in Licensee’s possession. Licensee shall execute all documents and take all such further actions as may be reasonably requested by Dyax in order to give effect to the terms of this Section 11.3(c).  Notwithstanding the foregoing, if Licensee terminates this Agreement in accordance with Section 11.2(b) because Dyax has licensed or attempted to license to a Third Party the rights exclusively licensed to Licensee under Section 2.1(a), then, without limiting any other legal or equitable remedies that Licensee may have, all rights granted to Licensee hereunder shall remain valid and unchanged, save that no further milestone and/royalties shall be due to Dyax as from the effective date of termination, the license being deemed to be converted into a fully-paid up perpetual irrevocable license.

11.4Survival.  In the event of any expiration or termination of this Agreement, (a) all financial obligations under Article 5 owed as of the effective date of such expiration or termination shall become immediately due and payable and (b) the provisions contained in this Agreement that by their terms survive expiration or termination of this Agreement, shall survive.  In addition, upon  expiration of this Agreement (but not in the event of any termination of this Agreement pursuant to Section 11.2), the licenses granted to Licensee in Sections 2.1 shall survive as perpetual, fully paid-up, non-royalty-bearing licenses, and any exclusive license in such Sections shall convert to a non exclusive license.

ARTICLE 12

MISCELLANEOUS

12.1Choice of Law.  This Agreement shall be governed by and interpreted under, and any court action in accordance with Section 12.2 shall apply, the laws of the [*****] excluding: (a) its conflicts of laws principles; (b) the United Nations Conventions on Contracts for the International Sale of Goods; (c) the 1974 Convention on the Limitation Period in the International Sale of Goods (the “1974 Convention”); and (d) the Protocol amending the 1974 Convention, done at Vienna April 11, 1980.

12.2Submission to Jurisdiction.  Each Party (a) submits to the exclusive jurisdiction of the state and federal courts sitting in [*****], with respect to actions or proceedings arising out of or relating to this Agreement in which a Party brings an action in aid of arbitration, (b) agrees that all claims in respect of such action or proceeding may be heard and determined only in any such court, and (c) agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court, other than an action or proceeding seeking injunctive relief or brought to enforce an arbitration ruling issued pursuant to Section 10.2 or an action related to intellectual property.  Each Party waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought.  Each Party may make service on the other Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 12.5.  Nothing in this Section 12.2, however, shall affect the right of any Party to serve legal process in any other manner permitted by law.

12.3Relationship of Parties.  Nothing in this Agreement or in the course of business between Dyax and Licensee shall make or constitute either Party a partner, employee, joint venturer or agent of the other.  Neither Party shall have any right or authority to commit or legally obligate or bind the other in any way whatsoever including, without limitation, the making of any agreement, representation or warranty.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

29

12.4Severability.  Each Party hereby agrees that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries.  Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions.  In case such valid provisions cannot be agreed upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid provisions.

12.5Notices.  All notices, requests, demands and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given upon the date of receipt if delivered by hand, recognized international overnight courier, confirmed facsimile transmission, or registered or certified mail, return receipt requested, postage prepaid to the following addresses or facsimile numbers:

If to Dyax:	Dyax Corp.
	300 Technology Square
	Cambridge, MA 02139
	USA
	Attention:  Vice President, Business Development
	Attention:  Corporate Counsel, Legal Department
	Facsimile:  (617) 225-7708
If to Licensee:	sanofi-aventis
	174 avenue de France
	75013 Paris
	France
	Attention:	Legal Operations
	Copy to:	License Administration
	Facsimile:	33 1 53 77 46 43

Either Party may change its designated address, contact person and facsimile number by notice to the other Party in the manner provided in this Section.

12.6Captions.  All captions herein are for convenience only and shall not be interpreted as having any substantive meaning.

12.7Assignment; Successors.  This Agreement may be assigned by Dyax without the prior written consent of Licensee.  The performance of Licensee hereunder is of a personal nature and, therefore, neither this Agreement nor the rights granted to licensee under Section 2.1 may be assigned, sublicensed (except as expressly provided under Section 2.2), or otherwise transferred, whether voluntarily or by operation of law, by the Licensee without the prior written consent of Dyax; provided, however, that Licensee may, without such consent, assign its rights and obligations under this Agreement (a) to any Affiliate, or (b) in connection with a merger, consolidation or sale of substantially all of Licensee’s assets to an unrelated Third Party; provided, however, that Licensee’s rights and obligations under this Agreement shall be assumed by its successor in interest in any such transaction and shall not

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

30

be transferred separate from all or substantially all of its other business assets, including without limitation those business assets that are the subject of this Agreement.  Any permitted assignee shall assume all obligations of its assignor under this Agreement.   Any purported assignment in violation of this Section 12.7 shall be void.  Nothing herein is intended to prevent either Party from sublicensing any of its rights in accordance with the terms of this Agreement.

12.8Execution in Counterparts; Facsimile Signatures.  This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument even if both Parties have not executed the same counterpart.  Signatures provided by facsimile transmission shall be deemed to be original signatures.  Notwithstanding the foregoing, promptly following the signature of this agreement by facsimile transmission, the Parties shall arrange for original signatures to be exchanged.

12.9Waiver.  The waiver by either Party hereto of any right hereunder, or of the failure of the other Party to perform, or of a breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise

12.10Performance by Affiliates.  To the extent that this Agreement imposes obligations on Affiliates of Dyax or Licensee, such Party agrees to cause its Affiliates to perform such obligations.  Furthermore, if and to the extent that any Affiliate of Dyax or Licensee seeks to derive benefit from any rights under this Agreement that have been extended through Dyax or Licensee to such Affiliate, such Affiliate shall be subject to all the terms and conditions set forth in this Agreement that are applicable to the Party through which such rights are derived.

12.11Force Majeure.  Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached the Agreement for failure or delay in performing any obligation under this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party including, but not limited to, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party.  The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts to remove or remedy the force majeure condition.

12.12Entire Agreement.  This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof.  All express or implied agreements and understandings, either oral or written, heretofore made are superseded by this Agreement.   This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties hereto.  Each of the Parties hereby acknowledges that this Agreement is the result of mutual negotiation and therefore any ambiguity in their respective terms shall not be construed against the drafting Party.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

31

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as a sealed instrument effective as of the date first above written.

DYAX CORP.	LICENSEE:
	SANOFI-AVENTIS
By:	By:
Title:	Title:
Date:	Date:
	By:	:
	Title :
	Date :

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

32

APPENDIX A

LICENSED ANTIBODY DESCRIPTION

[*****]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX B

TARGET DESCRIPTION

Tie-1

Human Tyrosine Protein Kinase Receptor Tie1 Precursor

Swiss-Prot Number: P35590

References describing the Nominated Target:

Mol Cell Biol. 1992 Apr;12(4):1698-707, A novel endothelial cell surface receptor tyrosine kinase with extracellular epidermal growth factor homology domains, Partanen J, Armstrong E, Makela TP, Korhonen J, Sandberg M, Renkonen R, Knuutila S, Huebner K, Alitalo K.

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX C

CAT PRODUCT LICENSE

[As previously filed with the Commission]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX D

TRANSFERRED MATERIALS

[*****]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX E

DX-2240 PATENTS

[*****]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX F

LICENTIA AGREEMENT

[Collaboration and License Agreement, dated October 31, 2001 by and among Dyax, Licentia Limited and Kari Alitalo, as amended from time to time.]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX G

LONZA AGREEMENT

[Agreement, dated March 10, 2005, by and between Dyax and Lonza Biologics PLC, as amended to date.]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX H

XOMA AGREEMENT

[As previously filed with the Commission.]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

APPENDIX I

LIST OF REPORTS TO BE PROVIDED UNDER SECTION 5.1

[*****]

Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 240.13a-14 or 240.15d-14
of the Securities Exchange Act of 1934, as amended

I,   Henry E. Blair, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Dyax Corp.;

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.
Date:		May 5, 2008
			/s/ Henry E. Blair
			Henry E. Blair
			Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 240.13a-14 or 240.15d-14
of the Securities Exchange Act of 1934, as amended

I,Stephen S. Galliker, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Dyax Corp.;

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.

Date:	May 5, 2008	/s/ Stephen S. Galliker
			Stephen S. Galliker
			Chief Financial Officer

EX-32

Exhibit 32

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Each of the undersigned officers of Dyax Corp. (the “Company”) certifies, under the standards set forth in and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2008 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	May 5, 2008	/s/ Henry E. Blair
		Henry E. Blair
		Chief Executive Officer
Dated:	May 5, 2008	/s/ Stephen S. Galliker
		Stephen S. Galliker
		Chief Financial Officer