1.	Nature of the Business

Synageva BioPharma Corp. (Synageva or the Company) is a biopharmaceutical company focused on the discovery, development, and commercialization of therapeutic products for patients with rare diseases. The Company’s most advanced pipeline programs are enzyme replacement therapies for lysosomal storage diseases (LSDs). The Company’s lead program, sebelipase alfa, is in global Phase 3 clinical trials for the treatment of infants, children and adults with lysosomal acid lipase deficiency (LAL Deficiency), a rare and devastating disease that causes significant morbidity and early mortality. In addition to sebelipase alfa, the Company has multiple other ongoing research programs at different stages of preclinical development, including SBC-103, another enzyme replacement therapy for an LSD known as mucopolysaccharidosis type IIIB (MPS IIIB) or Sanfilippo B. The Company’s pipeline programs target rare diseases that are characterized by significant morbidity and mortality and are selected based on scientific rationale, high unmet medical need, the potential to impact disease course and strategic alignment with our corporate focus. The Company has not yet received approval to market or commercialize sebelipase alfa or any other products.

The Company’s business is subject to risks including those common to companies in the biopharmaceutical industry, such as the successful development of products, patient enrollment, clinical trial uncertainty, regulatory approval, fluctuations in operating results and financial risks, potential need for additional funding, protection of proprietary technology and patent risks, compliance with government regulations, dependence on key personnel, competition, technological and medical risks and management of growth.

The Company has incurred losses since inception and at March 31, 2014, had an accumulated deficit of $290.7 million. The Company expects to incur losses over the next several years as it continues to expand its drug discovery, development efforts and commercial activities. As a result of continuing losses, the Company may seek additional funding through a combination of public or private financing, collaborative relationships, licensing or other arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into new collaboration or license agreements. If the Company is unable to obtain additional funding on a timely basis, it may be required to curtail or terminate some or all of its development programs, including some or all of its drug candidates.

Through March 31, 2014, the Company has funded its operations primarily from proceeds of the sale of stock, royalty income and collaboration agreements. On March 5, 2013, the Company announced the closing of a $211.5 million underwritten public offering of 2.0 million shares of common stock at a price per share of $105.75. The Company received net proceeds of approximately $200.9 million from this offering. In addition to this financing, the Company received aggregate net proceeds of approximately $473.9 million from public equity offerings in fiscal 2013 and 2012.

The Company currently intends to use its cash, cash equivalents and investments for general corporate purposes, which may include expanding its infrastructure, including commercial and manufacturing, to benefit sebelipase alfa and the rest of its pipeline, supporting its clinical studies, supporting the advancement of SBC-103, accelerating its early-stage programs, and acquiring technologies or businesses that are complementary to its current technologies and business focus. The Company expects that it will have sufficient cash and cash equivalents to sustain operations to at least the second half of 2016.