Portola Pharmaceuticals Annual Report 2014

FY2014 Annual Report · Portola Pharmaceuticals

Loading PDF…

P o r t o lA 2 0 1 4

ThE Ar T oF SCIEnCE F or ThE bEnEFIT oF PATIEnTS

CrEATInG Innov ATIon. brEAk ThrouGh mEdICInES . vALuE.

Art by C. Michael Gibson, MS, MD

CrEATInG A GrowTh C omPAny — 100+ STronG
Portola Pharmaceuticals is a biopharmaceutical company developing unique medicines that could significantly

advance the fields of thrombosis and hematologic cancers. Since our founding in 2003, we have made substantial

progress toward our goal of bringing to the market multiple groundbreaking products that benefit patients.

our science-driven team is dedicated to advancing our programs through the use of biomarker and genetic

approaches to define novel clinical endpoints and to identify patients most likely to benefit from our therapies. we

believe this approach increases the probability of success of our programs. now over 100 employees strong, we are

preparing for the potential commercialization of our products that we are developing to address serious unmet

patient needs. our objective remains to build a significant growth company through our commitment to excellence in

science and discovery.

100creating breakthroughs — andexanet alfa
andexanet alfa, an FDa-designated breakthrough therapy, is designed to
rapidly and precisely reverse the anticoagulant effect of oral and injectable
Factor Xa inhibitor anticoagulants to address their side effect of bleeding.
andexanet alfa has the potential to become the first universal antidote for
anticoagulated patients who suffer a major bleeding episode or require
emergency surgery. in multiple clinical studies with four different Factor
Xa inhibitors, andexanet alfa significantly reversed the anticoagulant activity
of these agents and was shown to be well tolerated. andexanet alfa has
been granted an accelerated approval pathway by the FDa, and our goal is
to quickly bring this therapy to the market for the hundreds of thousands of
patients annually who may benefit from an antidote to their anticoagulant.

0 antidotes available

to reverse new
anticoagulant class

0creating Firsts — b etrixaban
betrixaban is an oral, once-daily Factor Xa inhibitor anticoagulant. it has the
potential to be the first and only anticoagulant approved for extended
prevention of venous thromboembolism (blood clots), or Vte, in acute
medically ill patients. these patients are hospitalized for conditions such
as heart failure, stroke, infection, rheumatic disorders and pulmonary disease
and are at high risk for developing blood clots. We believe betrixaban has the
potential to succeed due to its validated mechanism of action, its properties
that differentiate it from other oral anticoagulants, and our innovative biomarker-
based pivotal study. if approved, betrixaban has the potential to change the
treatment paradigm for the over 22 million acute medically ill patients who are
hospitalized each year.

1st

potential
hospital-
to-home
anticoagulant
for medically ill

1creating noVel meDicines — c erdulatinib
cerdulatinib is an oral, dual syk/Jak kinase inhibitor that we are developing
to treat patients with hematologic cancers, specifically those who have
shown limited or no response to other therapies. in a single pill, cerdulatinib
uniquely inhibits two key signaling pathways known to promote cancer cell
growth. With its dual pathway mechanism, cerdulatinib may be more effective
in certain patients than a single pathway agent. We have demonstrated
proof-of-concept showing that cerdulatinib is active and well tolerated.
With these initial promising results, we are advancing this agent into clinical
expansion cohorts in patients with chronic lymphocytic leukemia and non-
hodgkin lymphoma.

2 cancer survival pathways inhibited

2creating innoVation
We are pioneering the development of new medicines for blood clots, blood cancers and other hematologic

disorders. With BETRIXABAN, we are aiming to change the treatment paradigm in the acute medically ill patient

population and reduce the occurrence of potentially fatal blood clots in these patients. With ANDEXANET ALFA,

our goal is to address the significant need for a universal antidote for patients on Factor Xa inhibitors experiencing

a major bleed or requiring emergency surgery. With CERDULATINIB, we have an agent that uniquely targets

both syk and Jak tumor survival pathways, which may result in greater clinical benefit in patients with hematologic

cancers than that seen with single pathway agents.

3 innovative product

candidates being
advanced

creating Value

in pursuit
oF liFe-saVing
meDicines

acute medically ill patients are those who are hospitalized
for serious non-surgical conditions, such as stroke, heart failure,
serious infection, rheumatic and pulmonary disorders.

2014 marked another year of extraordinary achievement
for portola. We continue to build on our success as a leader in
the discovery and development of breakthrough medicines
in the fields of thrombosis and blood cancers. throughout the
year, we reported positive clinical data and the achievement
of regulatory milestones for each of our wholly-owned and
potentially ground-breaking products.

We are now in the final stages of development with the goal of
bringing two life-saving thrombosis medicines to market, our
first in 2016 and our second in 2017. in addition, we continue to
advance a third clinical-stage product – a drug with a unique
mechanism of action that is intended to treat blood cancer
patients who do not respond to current therapies.

We are building a significant growth company with a culture
grounded in science and a focus on advancing our late-stage
pipeline. We are deeply committed to bringing to the market
medicines with the potential to save lives and deliver
stockholder value.

PARADIGM-CHANGING NOVEL ANTICOAGULANT
betrixaban, our once-daily oral Factor Xa inhibitor, has the
potential to be the first product in its class to be approved for
use in acute medically ill patients and the first anticoagulant
approved for extended duration prevention of venous
thromboembolism (Vte), or blood clots, in these patients.

each year, over 22 million acute medically ill patients are
hospitalized in the g7 countries with an indication for an
anticoagulant to prevent Vte. Despite standard hospital-
based therapies, such as injectable enoxaparin, an estimated
1 million of these patients will suffer a serious Vte and over
150,000 will die from a fatal Vte every year. Data have shown
that more than 50 percent of life-threatening blood clots occur
following hospital discharge and after the standard 10 days
of therapy – a period for which there is no approved therapy.

We believe that betrixaban has the potential to change the
treatment paradigm by addressing the limitations of injectable
hospital-based therapies and by being the first anticoagulant

1 million
Will suFFer
potentially Fatal
blooD clot

betrixaban needapproved for extended duration Vte prevention in these
patients following hospital discharge.

our goal is to bring this much-needed therapy to patients as
quickly as possible under an FDa accelerated approval pathway.

We expect to complete enrollment in our global pivotal phase
3 apeX (acute medically ill Vte prevention with extended
Duration betrixaban) study in 2015 and submit an nDa for
this product in 2016. the apeX study has an advantage of
using a biomarker (D-dimer) to identify patients who are at
risk of Vte and are most likely to benefit from betrixaban.
recently, a pre-specified futility analysis of the apeX study
was successfully completed, and we continue to observe that
the blinded aggregate Vte event rates in the study to date are
on track. therefore, we are optimistic about betrixaban’s
potential to achieve commercial approval for Vte prevention
in this patient population.

breakthrough therapy
With unpreceDenteD
clinical results

ADDREssING AN URGENT UNMET NEED
an additional promising compound in our thrombosis franchise
is andexanet alfa, which has been designated by the u.s. Food
and Drug administration (FDa) as both a breakthrough therapy
and an orphan drug. in 2014, we made significant progress on
this program and expect to bring it to market in 2016 as our first
commercially approved product. andexanet has the potential
to be the first antidote approved to reverse the anticoagulation
activity in Factor Xa inhibitor treated patients who suffer a
major bleeding episode or who may require emergency surgery.
the morbidity and mortality associated with bleeding on Factor
Xa inhibitors remains unaddressed. With the expected increase
in adoption of Factor Xa inhibitors, we project that by the year
2020 over 500,000 patients annually in the united states, Japan
and the five largest eu countries may benefit from an antidote.

We are evaluating andexanet alfa in two randomized, placebo-
controlled phase 3 anneXa™ (andexanet alfa a novel antidote
to the anticoagulant effects of FXa inhibitors) registration
studies. initial results from these studies have demonstrated
that andexanet alfa rapidly and significantly reversed apixaban
and rivaroxaban and was well tolerated. andexanet alfa is the
only Factor Xa inhibitor antidote in development that has been
shown to reverse definitive markers of anticoagulant activity,
such as anti-Factor Xa levels, in clinical studies.

in 2014 we also initiated anneXa-4, a phase 4 single-arm
confirmatory study in bleeding patients receiving apixaban,
rivaroxaban, edoxaban or enoxaparin who present with an
acute major bleed.

DEVELOPING A UNIQUE DUAL PATHWAY
ONCOLOGY AGENT
our third clinical-stage product, cerdulatinib, is an oral kinase
inhibitor with a unique mechanism of action – it targets both syk
and Jak tumor survival pathways. the inhibition of syk has
been shown to directly impact a tumor’s internal survival
signaling pathway, while the inhibition of Jak can block
supportive survival signals a tumor receives from its
micro-environment. With its dual pathway mechanism,
cerdulatinib may be more effective in specific patients –
such as those resistant to current therapies or those with
known heterogeneous cellular mutations – than a single
pathway agent.

this past year, we reported preliminary data from our
ongoing phase 1/2a study demonstrating clinical responses
with cerdulatinib. based on these data, we are advancing the
program to study larger expansion cohorts in patients with
chronic lymphocytic leukemia, follicular lymphoma and other
hematologic cancers, including those whose cancer has
progressed following treatment with multiple agents. our goal
is to pursue patient populations with significant unmet need
in whom the inhibition of both syk and Jak by cerdulatinib
may provide clinical benefit. if cerdulatinib is successful in
the next stage of development, we will seek an accelerated
development path.

BUILDING A sIGNIFICANT GROWTH COMPANY
FOR THE BENEFIT OF PATIENTs
We are leading the way in developing novel medicines for
patients with life-threatening thrombotic conditions and
hematologic cancers. our growth is built on a foundation of
exceptional science and extensive experience in discovering,
developing and commercializing successful medicines. our
drive is born out of a commitment to help patients who have
limited to no treatment options.

i would like to recognize and thank our patients, employees
and academic collaborators. they have inspired the innovative
science being advanced at portola and our success to date.
importantly, i also want to thank our stockholders for their
continued support. We look forward to keeping you apprised
of our progress during the exciting year ahead.

sincerely,

William lis
chief executive officer
april 2, 2015

AndexAnet AlfA
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2014

(cid:133) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-35935

PORTOLA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

2834
(Primary Standard Industrial
Classification Code Number)

20-0216859
(I.R.S. Employer
Identification No.)

270 E. Grand Avenue
South San Francisco, California 94080
(Address of Principal Executive Offices) (Zip Code)

(650) 246-7000
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:
Common Stock, par value $0.001 per share

Name of Each Exchange on which Registered
The NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No (cid:133)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:133) No ⌧
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 ⌧ No (cid:133)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File

required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes ⌧ No (cid:133)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ⌧

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 “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ⌧

Accelerated filer (cid:133)

Non-accelerated filer (cid:133)
(Do not check if a
smaller reporting company)

Smaller reporting company (cid:133)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:133) No ⌧
The aggregate market value of the voting and non-voting common equity held by non-affiliates was $857.6 million computed by reference to the last
sales price of $29.18 as reported by the NASDAQ Global Select Market, as of the last business day of the registrant’s most recently completed second fiscal
quarter, June 30, 2014. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.
As of February 27, 2015, the number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 48,952,668.

DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates information by reference to the definitive proxy statement for the registrant’s Annual Meeting of Stockholders to be held on or

about June 16, 2015, to be filed within 120 days of the registrant’s fiscal year ended December 31, 2014.

TABLE OF CONTENTS

Portola Pharmaceuticals, Inc.
Form 10-K
Index

Part I
Item 1. Business .............................................................................................................................................................................
Item 1A. Risk Factors .......................................................................................................................................................................
Item 1B. Unresolved Staff Comments ..............................................................................................................................................
Properties ...........................................................................................................................................................................
Item 2.
Item 3.
Legal Proceedings ..............................................................................................................................................................
Item 4. Mine Safety Disclosures ....................................................................................................................................................

Page

3
34
59
59
59
59

Part II
60
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .........
63
Item 6.
Selected Financial Data ......................................................................................................................................................
64
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .............................................
79
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ...........................................................................................
Item 8.
80
Financial Statements and Supplementary Data ..................................................................................................................
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ............................................ 108
Item 9A. Controls and Procedures .................................................................................................................................................... 108
Item 9B. Other Information .............................................................................................................................................................. 108

Part III
Item 10. Directors, Executive Officers and Corporate Governance ................................................................................................. 110
Item 11. Executive Compensation ................................................................................................................................................... 110
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .......................... 110
Item 13. Certain Relationships and Related Transactions, and Director Independence ................................................................... 110
Item 14. Principal Accountant Fees and Services ............................................................................................................................ 110

Part IV
Item 15. Exhibits and Financial Statement Schedules ...................................................................................................................... 111
Signatures ............................................................................................................................................................................................ 112
Exhibit Index ....................................................................................................................................................................................... 113

“Portola Pharmaceuticals,” our logo and other trade names, trademarks and service marks of Portola appearing in this report are the
property of Portola. Other trade names, trademarks and service marks appearing in this report are the property of their respective
holders.

[THIS PAGE INTENTIONALLY LEFT BLANK]

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, including the sections titled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. In some cases you can identify these statements by forward-looking words, such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “potential,” “seek,” “expect,” “goal” or the
negative or plural of these words or similar expressions. These forward-looking statements include, but are not limited to, statements
concerning the following:

(cid:121) our ability to enroll patients in our clinical studies at the pace that we project;

(cid:121) our ability to scale up manufacturing of our product candidates to commercial scale;

(cid:121)

the timing and the success of the design of our Phase 3 clinical study of Betrixaban, or APEX;

the timing and the success of our Phase 3 registration study and Phase 4 confirmatory study of Andexanet alfa;

the timing and the success of our anticipated additional Phase 2 proof-of-concept studies of Andexanet alfa;

(cid:121) potential indications for Andexanet alfa;

(cid:121) our ability to submit a Biologics License Application, or BLA, for Andexanet alfa in the time frame we project;

(cid:121) whether the results of our APEX study will be sufficient to support global regulatory approvals for Betrixaban;

(cid:121) our ability to obtain and maintain regulatory approval of our product candidates;

(cid:121) our ability to conduct a proof-of-concept study in hematologic cancers for Cerdulatinib;

(cid:121) our expectation that our existing capital resources will be sufficient to enable us to complete our ongoing Phase 3 clinical
study of Betrixaban, advance our Phase 4 Biologics License Application enabling studies and related manufacturing of
Andexanet alfa and our Phase 1/2a proof-of-concept studies of Cerdulatinib in hematologic cancers;

(cid:121)

the projected number of acute medically ill patients who would benefit from the use of Betrixaban;

the projected dollar amounts of future sales of established and novel anticoagulants;

(cid:121) our ability to successfully commercialize our products;

(cid:121)

the rate and degree of market acceptance of our products;

(cid:121) our ability to successfully build a hospital-based sales force and commercial infrastructure;

(cid:121) our ability to compete with branded and generic Factor Xa inhibitors;

(cid:121) our reliance on third parties to conduct our clinical studies;

(cid:121) our reliance on third-party contract manufacturers to manufacture and supply our product candidates for us;

(cid:121) our reliance on our collaboration partners’ performance over which we do not have control;

(cid:121) our ability to retain and recruit key personnel;

(cid:121) our ability to obtain and maintain intellectual property protection for our products;

(cid:121)

the actual receipt and timing of any milestone payments or royalties from our collaborators;

(cid:121) our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain

additional financing;

(cid:121) our ability to identify, develop, acquire and in-license new products and product candidates;

(cid:121) our ability to successfully establish and successfully maintain appropriate collaborations and derive significant revenue

from those collaborations;

(cid:121) our financial performance; and

(cid:121) developments and projections relating to our competitors or our industry.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk
factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not
possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements
we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this
report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking
statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance
or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by
law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We
undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these
statements to actual results or to changes in our expectations.

You should read this report and the documents that we reference in this report and have filed with the Securities and Exchange
Commission as exhibits to this report with the understanding that our actual future results, levels of activity, performance and events
and circumstances may be materially different from what we expect.

ITEM 1. BUSINESS

Overview

PART I

Our two lead programs address significant unmet medical needs in the area of thrombosis, or blood clots. Our first lead compound
Betrixaban is a novel oral once-daily inhibitor of Factor Xa in Phase 3 clinical trials for extended duration prophylaxis, or preventive
treatment, of a form of thrombosis known as venous thromboembolism, or VTE, in acute medically ill patients for 35 days of in-
hospital and post-discharge use. Currently, there is no anticoagulant approved for extended duration VTE prophylaxis in the acute
medically ill population. Our second lead compound Andexanet alfa, an FDA-designated breakthrough therapy, is a recombinant
protein designed to reverse anticoagulant activity in patients treated with a Factor Xa inhibitor. Andexanet alfa has potential
indications to treat patients who are taking a direct or indirect Factor Xa inhibitor and who suffer a major bleeding episode or require
emergency surgery. We are currently evaluating Andexanet alfa in Phase 3 clinical trials and a Phase 4 confirmatory trial. Our third
product candidate, Cerdulatinib, is an orally available kinase inhibitor that inhibits spleen tyrosine kinase, or Syk, and janus kinases, or
JAK, enzymes that regulate important signaling pathways. Cerdulatinib is being developed for hematologic, or blood, cancers and
inflammatory disorders. We are currently conducting a Phase 1/2a proof-of-concept study for Cerdulatinib in patients with non-
Hodgkin’s lymphoma, or NHL, or chronic lymphocytic leukemia, or CLL, who have failed or relapsed on existing marketed therapies
or products in development, including patients with identified mutations. In the Phase 1 dose escalation portion of the study, we have
yet to reach the maximum tolerated dose and enrollment continues. Based on interim Phase 1 data, we are advancing Cerdulatinib to
the Phase 2a portion of the study which includes expansion cohorts. We have another program of highly selective Syk inhibitors
which is partnered with Biogen Idec Inc.

We have full worldwide commercial rights to Betrixaban, Andexanet alfa, and Cerdulatinib. We believe we can maximize the value of
our company by retaining substantial commercialization rights to these three product candidates and, where appropriate, entering into
partnerships to develop and commercialize these product candidates. We plan on building a successful enterprise to commercialize
Betrixaban and Andexanet alfa, using a hospital-based sales team in the United States and possibly other major markets and with
partners in other territories.

Betrixaban

Betrixaban is a novel oral once-daily inhibitor of Factor Xa in development for extended duration VTE prophylaxis in acute medically
ill patients for 35 days of in-hospital and post-discharge use. Acute medically ill patients are those who are hospitalized for serious
non-surgical conditions, such as heart failure, stroke, infection, rheumatic disorders and pulmonary disorders. We estimate that in the
G7 countries in 2014 there were 22.5 million acute medically ill patients for whom VTE prophylaxis was recommended by medical
treatment guidelines. The current standard of care for VTE prophylaxis in this population is enoxaparin, an injectable low molecular
weight heparin that is approved for a usual administration period of 6 to 11 days and up to 14 days and is not approved for use outside
of the hospital. According to IMS Health Incorporated, or IMS, a healthcare industry information provider, worldwide sales of
enoxaparin for the twelve months through March 2014 were in excess of $4.1 billion. We believe that use of enoxaparin in acute
medically ill patients accounted for at least $2.0 billion of these sales.

Multiple large, global trials have demonstrated that there is substantial risk of VTE in acute medically ill patients with restricted
mobility and other risk factors beyond the standard course of enoxaparin. Our Phase 3 APEX study is designed to use biomarkers to
identify and enroll patients most likely to benefit from therapy with Betrixaban. Specifically, these patients have elevated blood levels
of D-dimer or are over age 75. There have been numerous publications highlighting the role of these two prognostic markers in
identifying patients at extended risk of VTE. The MAGELLAN trial sponsored by Bayer Pharma AG, or Bayer, and Janssen
Pharmaceuticals, Inc., or Janssen, which evaluated administration of rivaroxaban for an extended period, demonstrated that the
incidence of VTE-related death rose four-fold over several weeks after hospital discharge and the discontinuation of treatment.
However, there are no therapies approved for use beyond a typical hospitalization period of 6 to 14 days despite the ongoing risk of
VTE faced by these patients for 35 days or more following hospital admission. We are developing Betrixaban to be the first oral
Factor Xa inhibitor approved for use in acute medically ill patients and the first anticoagulant approved for hospital-to-home VTE
prophylaxis in these patients. We believe the addressable market opportunity for Betrixaban could be $3.0 billion to $4.0 billion by
2020.

In 2012, we initiated our pivotal biomarker-based Phase 3 APEX study, a randomized, double-blind, active-controlled, multicenter,
multinational study to evaluate a once-daily dose of Betrixaban for 35 days for superiority as compared to in-hospital administration
of enoxaparin once daily for 6 to 14 days followed by placebo. Our APEX study is over 70% enrolled in 35 countries worldwide. We
believe Betrixaban has the potential to succeed in this patient population, in part due to its validated mechanism of action, but most
importantly, due to its properties that differentiate it from other anticoagulants. First, it has the longest half-life, making it a true,
once-daily therapy allowing for a narrow peak-to-trough concentration ratio that helps maintain a less variable anticoagulant effect
over the course of a day. Second, it has the lowest renal clearance of all of the Factor Xa inhibitors, which may result in a lower rate
of bleeding. And finally, it is not metabolized in the liver by an enzyme called CYP 3A4, which may result in reduced potential for
drug-on-drug interactions. These properties are critically important for acute medically ill patients who are often renally compromised
and on multiple concomitant medications.

In February 2015, the Independent Data Monitoring Committee (IDMC) recommended that the Phase 3 APEX Study of Betrixaban
continue as planned without modification based on the successful completion of a pre-specified futility analysis. In making this
recommendation, the IDMC evaluated preliminary efficacy trends and safety reports from the first 50% of the patients enrolled.

In January 2013, we entered into a clinical collaboration agreement with Lee’s Pharmaceutical (HK) Ltd, or Lee’s, to jointly expand
our Phase 3 APEX study of Betrixaban into China with an exclusive option for Lee’s to negotiate for the exclusive commercial rights
to Betrixaban in China.

Andexanet alfa

Andexanet alfa, an FDA-designated breakthrough therapy, is a recombinant protein designed to reverse the anticoagulant activity in
patients treated with a Factor Xa inhibitor. Andexanet alfa has potential indications to treat patients who are taking a direct or indirect
Factor Xa inhibitor and who suffer a major bleeding episode or require emergency surgery. Currently, there is no antidote or reversal
agent approved for use against Factor Xa inhibitors. Leading clinicians have identified, and the United States Food and Drug
Administration, or FDA, has recognized, the lack of an effective reversal agent for Factor Xa inhibitors as a significant unmet clinical
need. Based on industry data, we estimate that in 2020, between 23 million and 36 million patients will be treated with Factor Xa
inhibitors, including low molecular weight heparins, for short-term use or chronic conditions. Clinical trial results suggest that,
depending on their underlying medical condition, annually between 1% and 4% of these patients may experience a major bleeding
event and an additional 1% may require emergency surgery. We believe that Andexanet alfa, if approved, has the long-term potential
to address a total worldwide market in excess of $2.0 billion.

Andexanet alfa is the first therapy to demonstrate reversal of the anticoagulant activity of Factor Xa inhibitors as measured by anti-
Factor Xa levels. We have initiated two Phase 3 ANNEXATM (Andexanet Alfa a Novel Antidote to the Anticoagulant Effects of fXA
Inhibitors) studies – one with Bristol-Myers Squibb Company, or BMS, and Pfizer Inc.’s, or Pfizer’s, Factor Xa inhibitor, apixaban
and one with Bayer Pharma AG, or Bayer, and Janssen Pharmaceuticals, Inc., or Janssen’s, Factor Xa inhibitor, rivaroxaban. Our
Phase 3 studies each consist of two parts. In the first part of each study, the effect of a single bolus of Andexanet alfa was evaluated in
healthy volunteers who had been given apixaban or rivaroxaban. In the second part of each study, the ability of Andexanet alfa to
sustain reversal of the anticoagulant effects of apixaban and rivaroxaban will be evaluated by administering a bolus plus infusion of
Andexanet alfa to healthy volunteers who have been given apixaban or rivaroxaban. The first part of our Phase 3 ANNEXATM studies
of a single bolus of Andexanet alfa with apixaban and with rivaroxaban both met their primary and secondary endpoints with high
statistical significance (p-values of less than 0.0001). The second part of our Phase 3 ANNEXATM studies is ongoing with results
expected in the first half of 2015. In early 2015, we initiated a Phase 4 ANNEXATM confirmatory patient study, as agreed to by the
FDA and EMA as part of an accelerated approval pathway for Andexanet alfa. This open-label, single-arm study is being conducted in
patients receiving apixaban, rivaroxaban or enoxaparin (a low molecular weight heparin) who present with an acute major bleed.
Pursuant to discussions with the FDA, we plan to include data from a small number of patients from this study in our Biologics
License Application, or BLA, which we expect to submit in 2015 for conditional approval.

We completed a series of Phase 2 proof-of-concept studies evaluating the safety and activity of Andexanet alfa in healthy volunteers
who were administered one of several Factor Xa inhibitors. Analysis of anticoagulation markers in blood samples taken from the
subjects in these studies demonstrated that Andexanet alfa produced immediate reversal of anticoagulant activity of the Factor Xa
inhibitors apixaban, rivaroxaban and enoxaparin and that the reversal could be sustained. Additionally, we are conducting a Phase 2
proof-of-concept study evaluating the reversal of edoxaban and we plan to initiate a Phase 2 study evaluating the reversal of
Betrixaban.

We have entered into collaboration agreements with BMS, and Pfizer collaboration agreements with Bayer, and Janssen, and
agreements with Daiichi Sankyo, Inc., or Daiichi Sankyo, to support Phase 2 and Phase 3 clinical studies with apixaban, rivaroxaban
and edoxaban, respectively. Collectively, these clinical collaborations represent over $100 million in upfront, contingent and potential
milestone payments to Portola. We retain full commercial rights with respect to Andexanet alfa.

Cerdulatinib

Cerdulatinib is an orally available, potent dual spleen tyrosine kinase (Syk) and janus kinase (JAK) inhibitor. Scientists have
demonstrated that both Syk and JAK play key roles in various hematologic cancers and inflammatory diseases. We are developing
Cerdulatinib for treatment of certain B-cell hematologic cancers, with a particular focus on patients who have NFkB activating
mutations or acquired mutations to other novel B-cell targeted therapies that cause treatment failure or disease relapse. Cerdulatinib
has completed preclinical testing and has demonstrated in-vitro activity in cancer cell lines with NFkB activating mutations and in
patient tumor samples with acquired mutations to novel B-cell targeted drug candidates. In October 2013, we initiated a Phase 1/2a
proof-of-concept study in NHL, and CLL, patients. In the Phase 1 dose escalation portion of the study, we have yet to reach the
maximum tolerated dose and enrollment continues. We presented interim Phase 1 data at the American Society of Hematology
Meeting in December 2014, and as a result we are advancing Cerdulatinib into the Phase 2a portion of the study which includes
expansion cohorts at the recommended Phase 2 dose.

Syk-selective inhibitors

We have a program of highly selective Syk inhibitors which is partnered with Biogen Idec Inc. Biogen Idec is leading the pre-clinical
study of highly selective Syk inhibitors for allergic asthma and other inflammatory disorders and is responsible for all development-
related expenses. Syk plays a critical role in mast-cell signaling and activation, which are central to immune system over-activation
and resultant airway constrictions in asthma. It is estimated that allergic asthma affects 15 million people in the United States alone.
Despite numerous approved treatments, approximately 25% of all emergency room visits each year are attributed to acute and severe
episodes of this disease.

Our strategy

Our goal is to build an enduring biopharmaceutical company with a foundation of products and product candidates that significantly
advance patient care in the areas of thrombosis, other hematologic disorders and inflammation. We have a clear strategy focused on
biomarker or genetic approaches to clinical development that we believe will increase the probability of clinical, regulatory and
commercial success of our first-in-class therapies. Key elements of our strategy are as follows:

Successfully complete the clinical development of Betrixaban. We expect to complete enrollment in our global pivotal Phase 3
clinical study, APEX by the end of 2015. APEX, is evaluating the efficacy and safety of our lead product candidate Betrixaban for
extended duration VTE prophylaxis during a hospital stay as well as post-discharge for 35 days in acute medically ill patients with
restricted mobility and other risk factors. In February 2015, the Independent Data Monitoring Committee, or IDMC, recommended
that our Phase 3 APEX Study of Betrixaban continue as planned without modification based on the successful completion of a pre-
specified futility analysis. In making this recommendation, the IDMC evaluated preliminary efficacy trends and safety reports from
the first 50% of the patients enrolled. If APEX is successful and we receive regulatory approval, Betrixaban will be the first
anticoagulant approved based on a biomarker approach for the multi-billion dollar market for extended VTE prophylaxis in acute
medically ill patients, both in the hospital and after discharge.

Advance Andexanet alfa through an expedited development and approval process. We are pursuing an Accelerated Approval
pathway for our FDA-designated breakthrough therapy, Andexanet alfa. Based on clinical trial results and discussions with the FDA,
we believe that the FDA supports our pursuit of this approval pathway. Based on our Phase 3 ANNEXA clinical studies in healthy
volunteers, we plan to submit a BLA for conditional approval at the end of 2015, which will include a small amount of patient data
from our Phase 4 ANNEXA-4 confirmatory study, which was initiated in early 2015. Additionally, we are in the process of obtaining
formal scientific advice from the EMA regarding the process for approval in Europe and plan to submit a Marketing Authorization
Application, or MAA, to the EMEA under the same Accelerated Approval pathway following our FDA filing.

Commercialize Betrixaban and Andexanet alfa, if approved, in the United States using a hospital-focused sales force. We plan to
commercialize both of our thrombosis product candidates with a U.S. hospital-based sales force of approximately 100 to 140 sales
representatives. We believe we will be able to address the multi-billion dollar markets for our thrombosis products with a targeted
sales and marketing effort because hospitals represent a concentrated customer base as compared to primary care or specialty
physicians. Outside the U.S., we are evaluating our commercial strategy.

Advance Cerdulatinib for treatment of hematologic cancers. We are currently evaluating Cerdulatinib in a Phase 1/2a proof-of-
concept study in NHL and CLL. In the Phase 1 dose escalation portion of the study, we have yet to reach the maximum tolerated dose
and enrollment continues. Based on interim Phase 1 data, we are advancing Cerdulatinib into the Phase 2a portion of the study which
includes expansion cohorts at the recommended Phase 2 dose. Cerdulatinib targets two key signaling pathways that can promote
cancer cell growth. This product candidate has the potential for broad activity in hematologic cancers because it blocks the B-cell
receptor pathway via Syk and key cytokine receptors via JAK. Our strategy for Cerdulatinib is to focus on patients that have shown
limited response to other therapies or have relapsed or do not respond due to mutations.

Deploy capital strategically to develop our portfolio of product candidates and create value. We expect to continue to deploy most of
our capital resources to develop Betrixaban and Andexanet alfa and to a lesser extent, advance Cerdulatinib into clinical expansion
cohorts. It is our strategy to leverage established clinical trial design principles as well as proactive engagement with relevant
regulatory authorities to advance these candidates towards key value inflection points in a capital-efficient manner. In parallel with
these efforts, we have entered into and anticipate that we will continue to seek and evaluate partnerships that provide support for the
further development of our product candidates while retaining significant economic and commercial rights. We believe that this
combination of independent development and partnering activity may allow us to realize the substantial potential value of our product
candidates while reducing our capital requirements.

Product candidates

Our development pipeline, summarized in the table below, includes three wholly owned compounds and one partnered program.

Development pipeline

Stage

Phase 3

Phase 3 and
Phase 4

Phase 1/2a

Indication

Worldwide commercial rights

Extended duration VTE prophylaxis in
acute medically ill patients in-hospital and
post discharge for 35 days

Reversal of Factor Xa inhibitor
anticoagulation

B-cell hematologic cancers

Portola

Syk inhibitor

Pre-clinical

Allergic asthma and other inflammatory
disorders

Biogen Idec

Product

Description

Betrixaban

Oral Factor Xa
inhibitor

Antidote for Factor
Xa inhibitors
Oral Dual Syk and
JAK inhibitor

Andexanet alfa

Cerdulatinib

Syk-selective
inhibitors

Betrixaban

We are developing Betrixaban to be the first anticoagulant approved for extended duration VTE prophylaxis in acute medically ill
patients both in-hospital and after discharge for 35 days. Acute medically ill patients are patients hospitalized for non-surgical
conditions, such as heart failure, stroke, infection, rheumatic disorders and pulmonary disorders. Acute medically ill patients with
restricted mobility and other risk factors are known to be at increased risk for VTE, both in the hospital and after discharge. Each year,
more than 150,000 acute medically ill patients worldwide die of VTE and not from their underlying medical condition. Pulmonary
embolism is the most common preventable cause of hospital death and a leading cause of increased length of hospital stay. The
average annual direct medical cost of treating VTE in a hospital setting in the United States is between $7,500 and $16,500 per patient
and is even greater for elderly, higher risk patients. Both the National Quality Forum and the Joint Commission on Accreditation of
Healthcare Organizations include the utilization of VTE prevention measures as a leading indicator of quality of patient care.

While there are a number of anticoagulants approved for short-duration VTE prophylaxis in acute medically ill patients during the
typical hospitalization period, there is no anticoagulant approved for extended duration VTE prophylaxis in this population. Acute
medically ill patients at risk for VTE are typically treated with intravenous or injectable heparin or an injectable low molecular weight
heparin, such as enoxaparin, marketed as Lovenox® and also available in generic form, while in the hospital but not after discharge.
Multiple large regional and global studies have demonstrated that there is a substantial risk of VTE after hospital discharge in acute
medically ill patients with restricted mobility and other risk factors. For example, the MAGELLAN trial of 8,101 patients showed that
the rate of VTE-related death for the 10-day period while the patients were in the hospital receiving anticoagulation therapy was 0.2%,
while the rate of VTE-related death for the 25-day post-discharge period when the patient did not receive anticoagulation treatment,
was 0.8%, a four-fold increase. One academic study examined the medical records of approximately 11,000 acute medically ill
patients for a period of 180 days after hospital admission and determined that 56.6% of VTE events in this population occurred after
discharge. These studies highlight the need for more effective extended duration prophylaxis therapies.

We are developing Betrixaban to be the first oral Factor Xa inhibitor approved for use in acute medically ill patients and the first
anticoagulant approved for extended duration VTE prophylaxis in those patients. We are evaluating Betrixaban in APEX, a global
Phase 3 clinical study using a biomarker approach by focusing on patients that are most likely to benefit, specifically those with
elevated D-dimer blood levels or those over the age of 75. In the field of thrombosis, it is well established that the outcomes of Phase
3 trials are significantly influenced by three factors: drug properties, dose selection and selection of the patients who will benefit most
from treatment. Historically, multiple anticoagulant drugs have effectively addressed these factors in their clinical trials and have had
success where competing agents within the same class have not. Applying our knowledge of Betrixaban’s properties, our clinical
experience with Betrixaban and learnings from Factor Xa inhibitor clinical trials conducted by other companies, we believe we have
designed the APEX study to enhance the likelihood of its success, despite the lack of success of other Factor Xa inhibitors in this
indication, based on the following factors:

Drug properties. Betrixaban’s unique pharmacodynamic and pharmacokinetic properties compared to other oral Factor Xa inhibitors
include a long half-life suitable for once-daily dosing, low renal clearance, which reduces the risk of drug accumulation, and low drug-
drug interaction potential due to lack of metabolism by the CYP3A4 pathway, a key metabolic route for many other drugs.

Dosing. The dosing regimen in our APEX study is designed to provide immediate anticoagulation for patients in the hospital and to
maintain a therapeutic level of anticoagulation over 24 hours with each oral once-daily dose for 35 days to reduce variability and
potential for increased bleeding risk from supratherapeutic drug levels or increased VTE risk from subtherapeutic drug levels. We
chose the dosing regimen of Betrixaban administered in APEX based on extensive modeling from our preclinical and clinical
experience with Betrixaban and analysis of efficacy, safety and pharmacokinetic data from clinical trials of other Factor Xa inhibitors.

Patient population. The APEX patient population, which is based on extensive review of epidemiologic studies and data from
multiple large trials in acute medically ill patients, targets the specific patients with certain risk factors who are at an increased risk for
VTE and can potentially benefit from extended duration VTE prophylaxis both during a hospital stay and post-discharge for 35 days,
while excluding those at increased risk of bleeding, the main side effect of all anticoagulants.

Overview of thrombosis

Thrombosis is the leading cause of mortality and morbidity in the western world. Thrombosis arises from an abnormal or excessive
activation of the body’s natural clotting process, resulting in the formation of a clot inside a blood vessel that disrupts normal blood
flow. If the clot detaches from the blood vessel wall and travels through the body, known as thromboembolism, it can damage vital
organs, such as the brain, heart and lungs. Clots that block arteries can lead to myocardial infarctions, more commonly referred to as
heart attacks, or a form of stroke known as ischemic strokes. Our Betrixaban development efforts are currently focused on VTE, with
the two most common conditions being deep vein thrombosis, or DVT, which typically leads to pain and swelling in the leg, and
pulmonary embolism, which occurs when a clot disrupts blood flow to the lungs, leading to lung damage or even death. In the United
States, on an annual basis, 1.2 million people have a new or recurrent heart attack, 700,000 people suffer an ischemic stroke and
350,000 to 600,000 people have a VTE.

Thrombosis is generally prevented or treated using either anticoagulants, commonly known as blood thinners, or another class of
drugs known as antiplatelet agents. The specific drug, dose and dosing frequency and duration of treatment depends on a patient’s
underlying disease and treatment setting, such as during surgery, in the hospital or at home. In some cases, these agents may be used
in sequence or combination.

Prophylaxis against all forms of thrombosis is a major medical need throughout the developed world. For example, in the G7
countries, the United States, Japan, France, Germany, Italy, Spain and the United Kingdom, existing medical guidelines recommend
that a population of approximately 46.4 million patients receive some form of anticoagulation drug therapy to reduce their risk of
thrombosis. The largest category of patients at risk for thrombosis is the acute medically ill, whose risk is increased for those patients
immobilized for more than a few days or with other risk factors. In addition to acute medically ill patients, populations at risk for
thrombosis include patients with atrial fibrillation, acute coronary syndrome, recent VTE and certain genetic mutations, as well as
surgical patients undergoing orthopedic or abdominal procedures.

The table below shows our estimate of the number of patients in the G7 countries, categorized by medical condition or procedure, for
whom a Class I medical guideline recommendation of anticoagulation drug therapy would apply. A Class I medical guideline
recommendation represents the highest level of recommendation that patients receive specified medical treatment based on the
evidence of the relative risks and benefits of such treatment.

Patients with Class I medical guideline recommendation to receive anticoagulation drug therapy

Population

Acute medically ill patients
Moderate to high risk surgery (including orthopedic surgery)
Atrial fibrillation
Acute coronary syndrome
VTE treatment and secondary prophylaxis
Total

Number of G7 patients
(in millions)
22.3
12.3
6.6
3.5
1.7
46.4

The population of acute medically ill patients represents the largest patient segment in the anticoagulant market, accounting for nearly
half of patients in the G7 countries. Despite the short duration of current VTE prophylaxis for the acute medically ill, typically 6 to 14
days, we believe that annual worldwide sales of enoxaparin for use in acute medically ill patients are at least $2.0 billion.

VTE in acute medically ill patients

The standard of care for VTE prophylaxis in acute medically ill patients is to treat those patients who have certain risk factors with an
anticoagulant, such as heparin or enoxaparin, for 6 to 14 days, primarily while the patient is in the hospital. Factors that have been
identified as increasing the risk of VTE include several days of restricted mobility, age, an elevated blood marker known as D-dimer,
previous VTE event, family history of VTE, smoking, hormonal therapy and others. Almost all hospitalized non-surgical patients have
at least one of these risk factors, and approximately two-thirds have two or more risk factors. In-hospital use of anticoagulation has
been shown to reduce the incidence of VTEs by approximately 63% and have a net clinical benefit; however, recent registry studies
and clinical trials have shown that acute medically ill patients remain at a high risk of VTE during the period after discharge.

For example, one academic study examined the medical records of approximately 11,000 acute medically ill patients for a period of
180 days after hospital admission and determined that 56.6% of VTE events in this population occurred after discharge. In the
MAGELLAN trial sponsored by Bayer and Janssen, 5.7% of enoxaparin-treated patients experienced a significant thrombotic event
during the trial period, and, in higher risk sub-populations, such event rate was 7% to 9%. In the ADOPT trial sponsored by BMS, the
combined incidence of symptomatic VTE and VTE-related death was twice as high during the period after cessation of enoxaparin
treatment as it was during the treatment period.

Currently, there are no anticoagulants approved for extended duration VTE prophylaxis in acute medically ill patients for more than a
6- to 14-day period, and most patients receive anticoagulation therapy only while in the hospital. Heparin and enoxaparin are generally
not prescribed for use outside of the hospital due to the difficulty of administering the therapies and lack of data showing a benefit
beyond the currently approved duration of therapy. Warfarin has not been studied in a large randomized trial and is not indicated for
VTE prophylaxis in acute medically ill patients. Both rivaroxaban and apixaban have been evaluated in large Phase 3 trials of VTE
prophylaxis in acute medically ill patients, both in the hospital and after discharge. The MAGELLAN trial, which evaluated
rivaroxaban, demonstrated efficacy but failed to demonstrate an acceptable benefit to risk profile due to increased bleeding, and the
ADOPT trial, which evaluated apixaban, showed a reduction in VTE events, but failed to demonstrate statistically significant efficacy.
Importantly, the results of these trials showed that acute medically ill patients with restricted mobility and other risk factors treated
with standard duration enoxaparin therapy for 6 to 14 days continue to be at increased risk of VTE post-hospital discharge for 35
days.

Leading clinicians have identified the lack of an appropriate therapy to prevent VTE in acute medically ill patients after discharge as a
significant unmet clinical need. Such a therapy should be easy to administer both within and outside of the hospital setting and would
need to show a robust reduction in the incidence of VTE and an acceptable bleeding profile compared to the current standard of care.
The therapy would also need to have other properties appropriate for use in acute medically ill patients. These patients are typically
frail and elderly and often cannot tolerate drugs that are significantly cleared through the kidneys. Moreover, they are often taking
multiple medications for concomitant conditions and need a therapy that has a low potential to interact with other medications and a
simple dosing regimen.

Betrixaban for extended duration VTE prophylaxis in acute medically ill patients

We believe that Betrixaban is well suited for use in extended duration VTE prophylaxis in acute medically ill patients, both in the
hospital and after discharge. Our preclinical and clinical studies suggest that it has antithrombotic activity similar to that of enoxaparin
and certain novel oral Factor Xa inhibitors (dabigatran, an anti-thrombin drug and fXa inhibitors; rivaroxaban, apixaban and
edoxaban). In addition, it has a number of characteristics that differentiate it from these compounds that we believe are particularly
relevant to acute medically ill patients, including:

Orally active with 23 hour half-life

Ideal for once-daily dosing.

•
• Ease of administration compared to therapies which require multiple doses over a

24 hour period or injections.

• Potential for lower peak concentration while still maintaining effective

anticoagulation, which could reduce bleeding and VTE risk.

Lower renal clearance compared to
other Factor Xa inhibitors

• Potentially allows for more predictable dosing concentrations in the blood of

patients with reduced kidney function.

• Potentially decreases the risk of bleeding associated with anticoagulants.

Low potential for drug-drug
interaction

Betrixaban clinical experience

• Unlike all currently approved direct Factor Xa inhibitors, Betrixaban is not
metabolized through the CYP3A4 pathway, a key metabolic route for many
approved drugs for a wide range of conditions.

• Many acute medically ill patients suffer from a significant underlying illness or one
or more chronic conditions and are taking multiple therapies. The concurrent use of
multiple CYP3A4 metabolized drugs can result in unpredictable drug levels and
other undesirable drug-drug interactions.

Betrixaban has been evaluated in 22 Phase 1 and Phase 2 clinical studies involving 1,411 human subjects, 1,200 of whom received
Betrixaban, including more than 100 subjects for six months or more. A series of 19 Phase 1 and clinical pharmacology studies
provided substantial information regarding its safety, dosage and use in specific sub-populations. In three Phase 2 studies, Betrixaban
was evaluated in specific patient populations relative to commonly used anticoagulants. Consistent with the development of other
antithrombotic agents, these studies were not designed to demonstrate a statistically significant difference between groups for the
studied outcomes. The Betrixaban Phase 2 studies were instead designed to demonstrate evidence of an anticoagulant effect and
relative safety compared to an established comparator. In these clinical studies:

(cid:121) Betrixaban was well tolerated in diverse patient populations with comparable or better tolerability as compared to

warfarin and enoxaparin;

(cid:121) Betrixaban achieved clinically relevant anticoagulant activity with comparable or less bleeding risk than existing agents;

and

(cid:121) Betrixaban demonstrated predictable pharmacokinetic and pharmacodynamic activity.

As is typical in the development of anticoagulants, our initial Phase 2 study was conducted in patients undergoing elective total knee
replacement surgery. This patient population has a very high incidence of VTE, making it an excellent population in which to evaluate
the relative effectiveness and safety of different doses as compared to the standard of care. In our 215-patient EXPERT study, two
different doses of Betrixaban, 15 mg and 40 mg each given twice daily, were evaluated against a U.S. standard twice-daily dose of 30
mg of enoxaparin in patients undergoing this surgery. The incidence of VTE in the Betrixaban groups was comparable to that in the
enoxaparin group and lower than the rates historically observed in placebo groups, although these results were not statistically
significant. In addition, the only incidence of major bleeding seen in the study was in the enoxaparin group.

In our 508-patient Phase 2 EXPLORE-Xa study, we evaluated the use of Betrixaban for ischemic stroke prevention in elderly patients
with nonvalvular atrial fibrillation. Three different once-daily doses of Betrixaban, 40 mg, 60 mg and 80 mg, were evaluated against
dose-adjusted warfarin. Patients with a median age of 74 years received treatment for at least 90 days and as long as 12 months. The
incidence of ischemic stroke, as well as major bleeds and clinically relevant non-major bleeds, was comparable across the warfarin
and Betrixaban treatment groups, suggesting similar anticoagulant activity and bleeding risk across all groups. In addition, we
measured D-dimer levels. D-dimer is a byproduct of coagulation, and elevated levels have been shown to be indicative of an increased
risk of thromboembolism. In those patients receiving Betrixaban who had not previously been taking warfarin, we observed a dose-
related decrease in D-dimer levels. We believe the results of the EXPLORE-Xa study, although not statistically significant, provide
evidence of the anticoagulant activity of Betrixaban and indicate that the long-term use of Betrixaban is well tolerated in an elderly
population, including those with moderate to severe kidney disease.

Our Phase 2 DEC study evaluated the utility of adjusting the dose of Betrixaban based on a patient’s weight. The study indicated that
making such adjustments is not necessary and it provided additional evidence of the safety and activity of Betrixaban.

All of our clinical studies to date have indicated that Betrixaban is well tolerated. Subjects taking Betrixaban had an increased rate of
gastrointestinal issues, such as diarrhea, nausea and vomiting, as compared to subjects taking placebo, but these increased rates appear
to be similar to those of patients taking other Factor Xa inhibitors. Patients taking Betrixaban also had an increased incidence of other
side effects such as back pain, dizziness, headaches, rashes and insomnia as compared with patients taking a placebo or an active
comparator. These side effects do not appear to have a substantial impact on patients’ tolerance of Betrixaban. There is no evidence
that Betrixaban has negative effects on heart rhythm or liver function. As discussed earlier, the most significant side effect of all
anticoagulants is major bleeding. While definitive conclusions cannot be drawn from our Phase 2 studies, it does not appear from the
study results that patients taking Betrixaban face a greater risk of major bleeding than patients taking warfarin or enoxaparin.

Betrixaban clinical development

Phase of study

Number of
studies

Subjects
receiving
Betrixaban

Objective

Selected results

Phase 1

459

Safety, tolerability, pharmacokinetic,
pharmacodynamics

Single doses up to 550 mg
well tolerated with predictable
drug properties

Phase 2
(EXPLORE-Xa
and DEC)

Phase 2
(EXPERT)

570

171

Safety/efficacy in atrial
fibrillation patients; safety compared
to warfarin

Prophylaxis and bleeding risk
comparable to warfarin

Safety/efficacy in knee replacement
compared to enoxaparin

Prophylaxis and bleeding risk
comparable to enoxaparin

Clinical experience of Factor Xa inhibitors in acute medically ill patients

Direct Factor Xa inhibitors rivaroxaban and apixaban have been studied in large Phase 3 trials for VTE prophylaxis in acute medically
ill patients. Neither trial was successful in showing a balanced result of VTE reduction relative to major bleeding events, referred to as
net clinical benefit. The MAGELLAN trial, which evaluated rivaroxaban, met its primary efficacy endpoint of decreased VTE in acute
medically ill patients but achieved this result with an unfavorable bleeding risk. By comparison, the ADOPT trial, which evaluated
apixaban, did not demonstrate significant clinical efficacy, although the rates of VTE in its study population were significantly lower
than those observed in MAGELLAN, which we believe reflects the lower risk patient inclusion in ADOPT. Despite the lack of
efficacy observed in ADOPT, the incidence of major bleeding was lower than that observed in MAGELLAN. Although neither
MAGELLAN nor ADOPT was successful, both highlighted the continuing risk of VTE after hospital discharge and illustrated two
major lessons that have informed the clinical development plan for Betrixaban for acute medically ill patients.

Dose selection: In the MAGELLAN trial, rivaroxaban was dosed once daily despite having a half-life of only between 5 to 9 hours.
To achieve adequate therapeutic coverage in a once-daily regimen, MAGELLAN may have studied a rivaroxaban dose that produced
supratherapeutic drug levels for a period after dosing, possibly explaining the unfavorable bleeding risk observed in that trial. In the
ADOPT trial, apixaban with a half-life of 12 hours, was dosed twice daily in order to maintain more consistent drug levels, which may
have been responsible for its relatively lower rate of bleeding than was seen in MAGELLAN.

Patient selection: Multiple studies of the acute medically ill have demonstrated that VTE incidence increases as the number of risk
factors that a patient has increases. In the ADOPT trial, where enrollment was open to a broad set of acute medically ill patients,
including a large number of subjects who were not at high risk of VTE, there were too few VTE events to create a statistically
significant separation between the control and treatment arms. In contrast to ADOPT, MAGELLAN enrolled patients with higher
levels of VTE risk and treatment with rivaroxaban produced a significant reduction in the 35-day incidence of VTE compared to
standard of care treatment with enoxaparin. Neither MAGELLAN nor ADOPT excluded patients whose medical history or concurrent
use of anti-platelet therapy placed them at a substantially higher risk of severe bleeding. In MAGELLAN, this failure to exclude
certain high risk patients combined with the dosing regimen used may have contributed to the relatively high level of bleeding events
observed in the trial and the lack of net clinical benefit.

Phase 3 APEX study

We believe that for an anticoagulant to demonstrate efficacy and safety for extended duration VTE prophylaxis in acute medically ill
patients, it must have the right drug properties, be dosed at appropriate levels and target the right patient population. As discussed
above, we believe that Betrixaban has a number of key pharmacokinetic and pharmacodynamic properties that make it well suited for
use with the frail and elderly patients that comprise a significant portion of the acute medically ill patient population. In addition,
using the data from our extensive clinical and preclinical studies of Betrixaban and learnings from ADOPT and MAGELLAN, we
believe that we have designed APEX with a dosing regimen for a study population focused on patients with certain biomarkers, that
we believe will increase the probability that Apex will demonstrate both safety and efficacy in VTE prophylaxis in acute medically ill
patients both in the hospital and after discharge.

Dose selection. Based on standard pharmacometric modeling that integrated preclinical and clinical studies of Factor Xa inhibitors, we
believe that we have identified a dosing regimen (80 mg oral once-daily dose for 34 days following a 160 mg oral loading dose on day
one that will produce clinically meaningful anticoagulant effects in the APEX trial. In our clinical studies, we measured the
concentration of Betrixaban achieved at different dose levels and showed in Phase 2 studies that at total daily doses of 30 mg and 80
mg Betrixaban had anticoagulant activity, measured by standard imaging tests to detect VTE, comparable to standard of care
enoxaparin. We also observed that bleeding and anticoagulant activity, as measured by a common blood marker D-dimer, of once-
daily 40 mg, 60 mg and 80 mg doses of Betrixaban were comparable to standard doses of warfarin in patients with non-valvular atrial
fibrillation. We correlated those doses with levels of thrombin generation inhibition, a common pharmacodynamic measurement used
to compare anticoagulant activity of different drugs, and compared those levels with those produced by other Factor Xa inhibitors,
including enoxaparin, rivaroxaban and apixaban. For patients with severe renal impairment and those taking agents that are strong
inhibitors of PGP enzymes, the dose of Betrixaban will be reduced to 40 mg daily, which targets a level of anticoagulant activity
consistent with the overall patient population.

The following diagram depicts pharmacometric modeling of thrombin generation inhibition over time for rivaroxaban, apixaban and
Betrixaban, reflecting the dosing regimen used in MAGELLAN, ADOPT and APEX, respectively:

Increased Bleeding Risk

Treatment

Betrixaban (80mg QD with loading dose)
Apixaban (2.5mg BID)

Rivaroxaban (10mg QD)

Increased VTE Risk

n
o
i
t
a
r
e
n
e
G
n
i
b
m
o
r
h
T

f
o
n
o
i
t
i
b
i
h
n
I

100

Hours

Patient selection: efficacy. We used the findings of MAGELLAN, ADOPT and other trials to help define the population of patients to
be included in APEX. APEX is enrolling patients that have a combination of specific medical conditions and risk factors that put them
at an elevated risk of VTE for 35 days after enrollment. The APEX inclusion criteria specify that patients must be admitted to the
hospital with one of five categories of acute medical illness: heart failure, respiratory failure, infection, rheumatic disease or stroke.
The inclusion criteria also require that patients have a high degree of immobilization. Further, a patient must meet one of the following
three additional criteria: have a D-dimer level of at least twice the upper limit of normal, be older than 75 years or have at least one
additional risk factor for VTE, specifically have elevated D-dimer blood levels or be over the age of 75, we are more likely to
demonstrate net clinical benefit from extended duration VTE prophylaxis.

Patient selection: safety. Consistent with our approach to enroll patients into the APEX study that are at an elevated risk for VTE for
35 days or more, we likewise designed the trial to exclude patients at high risk for bleeding. We believe this further increases the
probability that APEX will demonstrate a net clinical benefit for Betrixaban. For example, we exclude patients with a previous history
of major surgery, gastrointestinal bleeding, hemorrhagic stroke or bleeding pulmonary lesions. In addition, patients taking daily doses
of aspirin are limited to low doses and must also take a proton-pump inhibitor to reduce the risk of gastrointestinal bleeding.

Other study design features and operations measures. We have implemented various measures to improve data quality, ensure we
maintain a high degree of statistical power and reduce confounding clinical and statistical issues compared to MAGELLAN and
ADOPT. For example, we are transmitting ultrasound images electronically rather than by mail so that quality can be assessed in real
time. We do not require an ultrasound at day 10, which was required in an earlier study and that we believe led to patients failing to
return for a second ultrasound at day 35. We also instituted patient outreach measures intended to increase patient compliance with
follow-up appointments after hospital discharge. We expect our approach to result in a lower incidence of missing data in the primary
endpoint analysis and therefore increase study power for a given number of patients.

We designed our Phase 3 APEX study to demonstrate the safety and efficacy of Betrixaban for extended duration VTE prophylaxis
during a hospital stay and post-discharge for 35 days in acute medically ill patients with restricted mobility and certain biomarkers and
additional risk factors. If APEX is successful, we expect it to be sufficient to support global regulatory approvals. We can provide no
assurance that APEX will be successful and, if APEX is not successful, our ability to commercialize Betrixaban would be materially
adversely affected. APEX is a randomized, double-blind, active-controlled, multicenter, multinational study comparing a once-daily
dose of 80 mg of Betrixaban for 35 days (including both in the hospital and after discharge) with in-hospital administration of 40 mg
of enoxaparin once daily for 6 to 14 days followed by placebo. It is expected to enroll approximately 6,850 patients at over 450 study
sites throughout the world. The primary study objective is to demonstrate superiority as compared to the current standard of care in the
reduction of VTE-related events at 35 days while maintaining a favorable benefit to risk profile. The APEX study is adequately
powered to show a clinically relevant benefit with a p-value of less than 0.01 on the primary endpoint of total asymptomatic proximal
DVT (as detected by ultrasound), symptomatic DVT (proximal or distal), non-fatal pulmonary embolism and VTE-related death. The
first patient was enrolled in March 2012, and, based on current enrollment, we expect patient enrollment to be completed by the end of
2015. Four preliminary safety data reviews an independent monitoring committee, have been completed and the committee
recommended that the study continue as planned. In February 2015, the Independent Data Monitoring Committee (IDMC)
recommended that the Phase 3 APEX (Acute Medically Ill VTE Prevention with Extended Duration Betrixaban) Study of Betrixaban
continue as planned without modification based on the successful completion of a pre-specified futility analysis. In making this
recommendation, the IDMC evaluated preliminary efficacy trends and safety reports from the first 50% of the patients enrolled.

The following schematic depicts the APEX study design:

Day 10 4+

35 + 7days

65+5days

Hospitalization

Screen

Enoxaparin

Randomize

Betrixaban

Safety
follow-up visits

Ultrasound

Betrixaban (either 80 or 40 mg PO QD) with enoxaparin placebo SQ QD
Enoxaparin(either 40 or 20 mg SQ QD) for 10 4 days with betrixaban placebo
Note: No ultrasound is required at hospital discharge. Only one ultrasound is required at 35 (+7 ) day follow up

We believe that Betrixaban’s unique pharmacological profile combined with APEX’s study design positions Betrixaban to be the first
novel anticoagulant approved for use in acute medically ill patients and the first anticoagulant approved for extended duration VTE
prophylaxis in the acute medically ill patient population. We anticipate that such an approval, if obtained, would be for the use of
Betrixaban in those acute medically ill patients with medical profiles consistent with those of patients enrolled in APEX. Based upon a
review of epidemiological data, we believe that such patients constitute approximately two thirds of the acute medically ill patient
population subject to a medical guideline recommendation to receive pharmacological VTE prophylaxis, or approximately 14 million
patients in the G7 countries.

Betrixaban pharmacoeconomics

Oral drugs are typically less expensive than injectable agents. Currently in thrombosis, based on our research, we estimate that the
average daily wholesale acquisition cost of a 40 mg Lovenox pre-filled syringe in the United States
is $33.08 compared to rivaroxaban at $10.49 per day for both the 10 mg and 20 mg strengths. In addition, the cost to treat a VTE in a
hospital setting in the United States can reach $16,500 per patient in direct medical expenses. Therefore, we believe that, if our APEX
Phase 3 study is successful, Betrixaban could represent a cost-effective preventive therapy against VTE in acute medically ill patients
as compared to the current standard of care. We estimate that by 2016, the total potential market for VTE prophylaxis in the acute
medically ill population, including extended duration VTE prophylaxis, will be $3 billion to $4 billion.

Andexanet alfa

Major bleeding is the most clinically meaningful side effect of oral and injectable Factor Xa inhibitors, including apixaban,
rivaroxaban, edoxaban, Betrixaban and enoxaparin. Andexanet alfa is a recombinant protein designed to reverse anticoagulant activity
in patients treated with a Factor Xa inhibitor. Andexanet alfa has potential indications to treat patients who are taking a direct or
indirect Factor Xa inhibitor and who suffer major bleeding episode or require emergency surgery.

Overview of anticoagulant-related bleeding

In patients using anticoagulation therapy, there is an increased risk of major bleeding, which is common across all anticoagulants
regardless of the reason for anticoagulation therapy, the patient setting or the duration of therapy. For patients at an elevated risk of
thrombosis, the benefits provided by anticoagulation products generally outweigh the related risk of bleeding, however, major
bleeding remains a significant cause of morbidity and mortality in these patients. For example, atrial fibrillation patients taking Factor
Xa inhibitors on a chronic basis had a 1% to 4% annual rate of a major bleed in the Phase 3 ARISTOTLE trial of apixaban, sponsored
by BMS and Pfizer, and the Phase 3 ROCKET trial of rivaroxaban, sponsored by Bayer and Janssen. Based on other clinical trials, we
believe that annually an additional 1% of patients taking Factor Xa inhibitors will require emergency surgery. Patients on
anticoagulation who suffer trauma have a higher risk of death than similar patients not on anticoagulation. The cost of treating a major
bleed may exceed $100,000 in direct medical expenses..

The c
that d
PCCs
partic
PCCs
Vitam
While
poten
myoc

current standard
directly or indir
s; protamine; a
cular anticoagu
s, while low mo
min K alone is
e the existing r
ntially serious s
cardial infarctio

d treatment for
rectly support c
nd recombinan
ulant being take
olecular weigh
administered a
reversal agents
side effects, inc
on.

r patients takin
clotting, such a
nt Factor VIIa,
en. For exampl
ht heparin patie
approximately 4
are effective t
cluding in som

ng established a
as Vitamin K; f
or rFVIIa. Wh
le, common tre
ents needing re
400,000 times
to varying degr
me cases increas

anticoagulants
fresh frozen pl
hich of these ap
eatments for wa
versal are often
each year in th
rees to reverse
sed risk of prot

who experienc
lasma, or FFP;
pproaches is us
arfarin reversa
n managed wit
he United State
the effects of e
thrombotic effe

ce major bleed
prothrombin c
sed for a given
al are Vitamin K
th FFP or prota
es to reverse th
established ant
fects such as isc

ing is to admin
complex conce
n patient depend
K, FFP and, m
amine. We esti
he effects of an
ticoagulants, th
chemic stroke

nister products
entrates, or
ds on the
more recently,
imate that
nticoagulants.
hey can have
and

There
for es
prelim
mostl
cause
large
proth
taking
revers

e are, however,
stablished antic
minary data sug
ly in the early s
ed by establishe
quantities wou
hrombotic effec
g those therapi
sal agent for F

, no approved a
coagulants hav
ggest that they
steps of the coa
ed anticoagulan
uld need to be g
cts. As there ar
ies face a risk o
actor Xa inhib

antidotes or rev
ve not been exte
may not be ef
agulation casca
nts. For the rev
given to overw
e no currently
of major bleedi
itors as a signi

versal agents fo
ensively studie
ffective to treat
ade prior to the
versal agents to
whelm the inhib
approved thera
ing. Leading cl
ficant unmet c

for the new ora
ed in clinical tr
t major bleedin
e involvement
o affect bleedin
bitor, an approa
apies designed
linicians have i
linical need.

al Factor Xa inh
rials of oral Fac
ng in these pati
of Factor Xa a
ng in patients t
ach that we bel
d to reverse or o
identified, and

hibitors. Moreo
ctor Xa inhibito
ents. The exist
and simply sup
taking oral Fac
lieve could lea
overcome Fact
d the FDA has r

d
sal agents used
over, the revers
ents, and
or treated patie
gents work
ting reversal ag
actor deficiency
y
plement the fa
y
ors, sufficiently
ctor Xa inhibito
s
ad to dangerous
rs, patients
tor Xa inhibitor
e lack of a
recognized, the

The f

following diagr

ram depicts wh

here the existin

ng reversal agen

nts and novel o

oral anticoagul

lants interact w

with the coagula

ation cascade:

Intrinsic Pathway

Factor XII

Factor XIIa

Factor XI

Factor XIa

Extrinsic Pathway

Trauma

rFVIIa, PCC

Factor IX

Factor IXa

Factor VIIa

Factor VII

Tissue Factor

Factor X

Factor Xa

Factor X

PCC

Prothrombin

Thrombin

Final Common Pathway

Betrixaban
Apixaban
Rivaroxaban
Edoxaban

Dabigatran

Fibrinogen

Blood Clot

Despi
signif
and re
coagu
corres
with a
emerg

ite the risk of m
ficant clinical b
elevant market
ulation indicati
spondingly inc
approximately
gency surgery

major bleeding
benefits over st
t data, we estim
ion. As sales of
crease. We esti
300,000 of the
and approxima

g, sales of Facto
tandard produc
mate that by 20
f Factor Xa inh
mate that by 2
ese cases arisin
ately 100,000 o

or Xa inhibitor
cts for preventi
020, Factor Xa
hibitors increas
020, over 500,
ng from a majo
of those cases a

rs are expected
ing thrombosis
inhibitors will
se, the need for
000 patients an
or bleeding epis
arising from tra

amatically in th
d to increase dr
farin or enoxap
s, such as warfa
ity share of the
have a majori
antidote or reve
r an effective a
G7 will need a
nnually in the G
sode, approxim
mately 100,000
y.
aumatic injury

e
ars as they have
he coming yea
arin. Based on
n our research
h major anti-
market in each
l
ersal agent will
versal agent,
a Factor Xa rev
s arising from
0 of these cases

Andexanet alfa — a universal antidote for Factor Xa inhibitors

Building on the insights gained during the development of Betrixaban, we designed Andexanet alfa as a universal reversal agent for
direct Factor Xa inhibitors, such as rivaroxaban, apixaban, edoxaban and Betrixaban, as well as indirect Factor Xa inhibitors, such as
enoxaparin. Andexanet alfa is structurally very similar to native Factor Xa, but it has a number of limited modifications intended to
restrict its biological activity to reversing the effects of Factor Xa inhibitors. Andexanet alfa acts as a Factor Xa decoy that binds to
Factor Xa inhibitors in the blood. Once bound to Andexanet alfa, the inhibitors are unable to bind to and inhibit native Factor Xa. The
native Factor Xa then becomes available to participate in the coagulation process and restore hemostasis, or normal clotting.

In designing Andexanet alfa, we started with native Factor Xa protein and used our knowledge of its functional domains to make three
changes by protein engineering. First, we made a small modification to the active site, or catalytic pocket, of native Factor Xa so that
Andexanet alfa cannot drive the coagulation process but still binds to Factor Xa inhibitors with high affinity. Second, we removed
most of the section of the native Factor Xa that facilitates binding to the thrombin activating complex to reduce the risk that
Andexanet alfa would interfere with the activity of native Factor Xa. Importantly, while removing this section we retained a small
portion at the end so that Andexanet alfa looks more like native Factor Xa to the immune system, thereby decreasing the likelihood of
an immune system response against Andexanet alfa. Third, we made a minor modification in the peptide section that links the two
parts of Factor Xa to facilitate Andexanet alfa’s manufacture using standard processes. The end result is a recombinant protein that we
believe can bind with and sequesters any direct or indirect Factor Xa inhibitor, thereby allowing native Factor Xa to drive coagulation
and restore hemostasis.

Andexanet alfa preclinical results

We have evaluated Andexanet alfa in numerous in-vitro and animal studies and have developed substantial evidence supporting the
safety, efficacy and rapid activity of Andexanet alfa. Key findings from this preclinical program include:

(cid:121)

In isolated human plasma, we have measured multiple pharmacodynamic measures of coagulation, such as anti-Factor Xa
units, prothrombin time and activated partial thromboplastin time as well as key pharmacokinetic measures and have
shown that Andexanet alfa reverses the effects of all Factor Xa inhibitors we have studied, including rivaroxaban,
Betrixaban, apixaban, enoxaparin and fondaparinux.

In tail transection blood loss models in rats and mice, we have shown that Andexanet alfa significantly reduces the amount
of blood loss compared to placebo in animals treated with enoxaparin, fondaparinux, or rivaroxaban plus aspirin. In
studies where Andexanet alfa was given five or ten minutes after the transection, blood loss was significantly reduced
compared to animals not given Andexanet alfa.

In a rabbit liver laceration model, we have shown that Andexanet alfa reduces the level of bleeding in rivaroxaban-treated
rabbits to levels comparable to those of rabbits not anticoagulated with rivaroxaban whether given before or after the liver
incisions. We have also shown that administration of pro-thrombotic agents, rFVIIa and prothrombin complex
concentrates, fails to decrease the amount of blood loss in rabbits treated with rivaroxaban. In addition, we have shown
that in rabbits treated with Andexanet alfa, but without rivaroxaban, bleeding levels were comparable to those of untreated
rabbits, suggesting that Andexanet alfa alone does not have significant pro-coagulative effects.

In a cynomolgus monkey safety study, animals were dosed multiple times with Andexanet alfa, both alone and in the
presence of several Factor Xa inhibitors, without any evidence of significant toxicity.

In a cynomolgus monkey study, administration of Andexanet alfa alone was associated with a transient increase in certain
coagulation markers consistent with a known interaction between Andexanet alfa and tissue factor pathway inhibitor, or
TFPI, another element in the coagulation process. These blood markers, which are indicative of increased thrombin
generation, were not associated, however, with any evidence of clot formation or fibrin deposition in detailed
histopathological examination of the monkeys at necropsy.

Taken together, these and other studies suggest, but do not prove, that Andexanet alfa will be a safe and effective Factor Xa reversal
agent.

Andexanet alfa clinical results and development strategy

Based on the results of our initial Phase 2 study, we held an End of Phase 2 meeting with the FDA in August 2013 to discuss the
remaining clinical studies needed for approval of Andexanet alfa. In November 2013, the FDA granted breakthrough therapy
designation for Andexanet alfa and we are pursuing an Accelerated Approval pathway for Andexanet alfa. We initiated Phase 3
registration studies for Andexanet alfa in the first half of 2014 and initiated a Phase 4 confirmatory study in early 2015. The results
from our Phase 3 studies along with data from a limited number of patients in the ongoing Phase 4 confirmatory study will support
filing a BLA for conditional approval by the end of 2015. In the second half of 2014, we obtained formal scientific advice from the
EMA which also supports using the same clinical data package for submitting for regulatory approval in Europe. Our initial
conversations with the PMDA in Japan, also in the second half of 2014, support a similar regulatory path in Japan. However,
additional guidance is needed to determine our approval strategy for Japan.

Andexanet alfa Phase 2 studies

We have completed a series of Phase 2 proof-of-concept studies evaluating the safety and activity of Andexanet alfa in healthy
volunteers who were administered one of several Factor Xa inhibitors. The purpose of these studies is to evaluate the safety of
Andexanet alfa and to determine the dose of Andexanet alfa required to reverse the effect of each anticoagulant as measured by
multiple pharmacokinetic and pharmacodynamic endpoints. Results from our Phase 2 studies with apixaban, rivaroxaban, edoxaban
and enoxaparin, demonstrated a bolus of Andexanet alfa immediately reversed the anticoagulation activity of each Factor Xa inhibitor
and that the reversal could be sustained with a continued infusion of Andexanet alfa. Andexanet alfa was shown to be well tolerated
with no thrombotic events or antibodies to Factor Xa or Factor X detected.

In these studies the Factor Xa inhibitor was dosed in healthy volunteers for five or six days to achieve steady-state drug levels.
Andexanet alfa was then administered intravenously in a range of bolus only and bolus plus infusion dose regimens.
Pharmacodynamic and safety data were collected through Day 48 with pharmacokinetic data through Day 10. The primary endpoint
for each of these studies is the percent reversal of anti-Factor Xa activity after dosing.

In the Phase 2 studies Andexanet alfa was generally well tolerated with no apparent safety signals. Importantly, none of the subjects
receiving Andexanet alfa generated detectable levels of antibodies against either Factor X or Factor Xa and there have been no
neutralizing antibodies against Andexanet alfa detected. The most common drug-related side effect was mild infusion-related
reactions, which are not unexpected for a biological agent, such as Andexanet alfa. In the Phase 2 studies, there was also a dose-
dependent restoration of thrombin generation with no clinical evidence of thrombosis.

Based on the results of our initial Phase 2 study, we held an End of Phase 2 meeting with the FDA in August 2013 to discuss the
remaining clinical studies needed for approval of Andexanet alfa. Typically the FDA requires at least one large-scale, randomized,
placebo controlled study for approval of a new therapeutic. However, under the FDA’s “Accelerated Approval” pathway, therapies
targeting a significant unmet clinical need may be approved based upon their showing adequate safety as well as efficacy against a
surrogate biomarker endpoint in a clinical trial. In November 2013, the FDA granted breakthrough therapy designation for Andexanet
alfa and therefore we are pursuing an Accelerated Approval pathway for Andexanet alfa. Utilizing this expedited approval process
should significantly decrease the time and expense associated with our development program. After additional discussions with the
FDA in 2014, including a formal End of Phase 2 meeting, we have initiated multiple Phase 3 studies (ANNEXATM - Andexanet Alfa a
Novel Antidote to the Anticoagulant Effects of FXa Inhibitors) with study design similar to our Phase 2 proof-of-concept studies
along with a Phase 4 study evaluating the safety and efficacy of Andexanet alfa in patients experiencing severe bleeding while being
treated with rivaroxaban, apixaban or enoxaparin. The Phase 3 studies are being conducted under an Accelerated Approval pathway
using biomarker endpoints for conditional approval. These biomarkers include anti-Factor Xa levels, plasma free fraction of the
anticoagulant and thrombin generation.

Phase 3 ANNEXA-A (Andexanet Alfa a Novel Antidote to the Anticoagulant Effects of fXA Inhibitors – Apixaban) Study Design and
Results

The randomized, double-blind, placebo-controlled Phase 3 ANNEXA-A study is evaluating the safety and efficacy of Andexanet alfa
in reversing apixaban-induced anticoagulation in older healthy volunteers. Efficacy is being evaluated using biomarker endpoints,
including anti-Factor Xa levels as the primary endpoint. Secondary endpoints include levels of plasma unbound (free fraction) of
apixaban and thrombin generation.

In the first part of the Phase 3 ANNEXA-A trial, 33 healthy volunteers (ages 50-73) were given apixaban 5 mg twice daily for four
days and then randomized in a 3:1 ratio to Andexanet alfa administered as a 400 mg IV bolus (n=24) or to placebo (n=9). The study
achieved all of its primary and secondary endpoints with statistical significance (p value <0.0001). In the study, two to five minutes
after completion of a bolus dose of Andexanet alfa, the anticoagulant activity of apixaban was reversed by approximately 94 percent
(p value <0.0001) compared with placebo as measured by anti-Factor Xa activity. Every subject treated with Andexanet alfa had
between 90 and 96 percent reversal of the anticoagulant activity of apixaban. The reversal of anti-Factor Xa activity correlated with a
significant reduction in the level of free, unbound apixaban in the plasma, consistent with the mechanism of action of Andexanet alfa.
Additionally, Andexanet alfa restored thrombin generation to baseline normal levels (prior to apixaban therapy). In this study, no
serious adverse events, thrombotic events, or antibodies to Factor X or Xa were reported following Andexanet alfa administration.
Mild infusion reaction was reported in three subjects.

The following diagram depicts the data from the first part of our Phase 3 ANNEXA-A study of Andexanet alfa in subjects taking
apixaban.

In the second part of the ANNEXA-A study, 32 healthy volunteers will be given apixaban 5 mg twice daily for four days and then
randomized in a 3:1 ratio to Andexanet alfa administered as a 400 mg IV bolus followed by a continuous infusion of 4 mg/min for 120
minutes or to placebo. These data are expected in the first half of 2015.

Phase 3 ANNEXA-R (Andexanet Alfa a Novel Antidote to the Anticoagulant Effects of FXa Inhibitors – Rivaroxaban) Study Design
and Results

The randomized, double-blind, placebo-controlled Phase 3 ANNEXA-R study is evaluating the safety and efficacy of Andexanet alfa
in reversing rivaroxaban-induced anticoagulation in healthy volunteers ages 50-75 years. Efficacy is being evaluated using biomarker
endpoints, with anti-Factor Xa levels as the primary endpoint. Secondary endpoints include plasma levels of plasma unbound (free
fraction) of rivaroxaban and thrombin generation levels.

In the first part of the ANNEXA-R study, 41 healthy volunteers were given rivaroxaban 20 mg once daily for four days and then
randomized in a 2:1 ratio to receive at Cmax either Andexanet alfa administered as an 800 mg IV bolus (n=27) or to placebo (n=14).
The study achieved its primary endpoint with high statistical significance. Results showed that Andexanet alfa significantly and
immediately reversed the anticoagulation activity of rivaroxaban. Andexanet alfa was shown to be well tolerated.

The following diagram depicts the data from the first part of our Phase 3 ANNEXA-R study of Andexanet alfa in subjects taking
rivaroxaban.

In the second part of the ANNEXA-R study, approximately 40 healthy volunteers will be given rivaroxaban 20 mg once daily for four
days and will then be randomized in a 2:1 ratio to receive either Andexanet alfa administered as an 800 mg IV bolus followed by a
continuous infusion of 8 mg/min for 120 minutes or to placebo. Data from this part of the study are expected in mid-2015.

Our Phase 4 ANNEXA-4 study, which was initiated in January 2015, is an open-label, single-arm study being conducted in patients
receiving apixaban, rivaroxaban, edoxaban or enoxaparin (a low molecular weight heparin) who present with an acute major bleed.
Acute major bleeding includes life-threatening bleeding, bleeding associated with very low blood counts, or bleeding that occurs in a
critical area such as the brain or surrounding the heart. The trial excludes bleeding due to major trauma and large blood vessel rupture.
Patients will receive Andexanet alfa as an intravenous (IV) bolus followed immediately by a continuous infusion. The study is
evaluating Andexanet alfa’s ability to decrease anti-Factor Xa activity and restore hemostasis in patients. Safety endpoints include
overall 45 day safety, including an evaluation of thrombotic activity and antibody development. Data from a small number of patients
in this study will be included in our BLA filing at the end of 2015 as part of an Accelerated Approval pathway for Andexanet alfa.

At the conclusion of the registration studies, we plan to submit that data along with available interim data from the Phase 4 ANNEXA-
4 study as part of a BLA, for Accelerated Approval in the United States and subsequently as part of a MAA in Europe. If the
registration studies are successful, we believe these data could be sufficient to obtain approval for Andexanet alfa from the FDA and
the EMA.

Collaboration with BMS and Pfizer

In October 2012, we entered into a three-way agreement with BMS and Pfizer to include subjects dosed with apixaban, their jointly
owned product candidate, in one of our Phase 2 proof-of-concept studies of Andexanet alfa. The total consideration under this
agreement of $6.0 million was received and recognized as revenue on a straight-line basis over the estimated performance period
through the fourth quarter of 2013. This agreement will continue in force until our anticipated meeting with the FDA or termination by
either party pursuant to the agreement. BMS and Pfizer may terminate this agreement if the parties cannot agree on certain changes to
the development plan, for convenience with 60 days’ advance written notice or for our bankruptcy or change of control. In addition,
either party may terminate this agreement for the other party’s uncured material breach or for material safety issues.

In January 2014, we entered into a second collaboration agreement with BMS and Pfizer to further study the safety and efficacy of
Andexanet alfa as a reversal agent to apixaban in our Phase 3 studies. Under the terms of the agreement, we received an upfront
payment of $13.0 million and are eligible to receive additional development and regulatory milestone payments of up to $12.0
million. These payments represent the total consideration under this agreement. BMS and Pfizer will continue to provide development
and regulatory guidance for the program.

This Phase 3 collaboration agreement will continue in force until the approval of Andexanet alfa as a reversal agent for apixaban by
the FDA and EMA. BMS and Pfizer may terminate this agreement for convenience with 60 days’ advance written notice or for our
bankruptcy or change of control. In addition, either party may terminate this agreement for the other party’s uncured material breach,
material safety issues, or failure of the Phase 3 studies.

Under both agreements with BMS and Pfizer, we retain full, worldwide development and commercial rights to Andexanet alfa.

Collaboration with Bayer and Janssen

In February 2013, we entered into a three-way agreement with Bayer and Janssen to include subjects dosed with rivaroxaban, their
Factor Xa inhibitor product, in one of our Phase 2 proof-of-concept studies of Andexanet alfa. We are responsible for the cost of
conducting such clinical studies. Pursuant to the agreement, Bayer and Janssen will work closely with us on both development and
regulatory aspects of Andexanet alfa in connection with our Phase 2 proof-of-concept studies. Under the agreement, Bayer and
Janssen have each provided us with an upfront and non-refundable fee of $2.5 million, for an aggregate fee of $5.0 million, and will
each provide us with an additional payment of $250,000, for an aggregate fee of $500,000, following the delivery of the final written
study report of our Phase 2 proof-of-concept studies of Andexanet alfa, as further specified in the agreement. This agreement will
continue in force until the later of the completion of the studies and the fulfillment of certain other conditions set forth in the
agreement, unless earlier terminated by either party pursuant to the agreement. This agreement may be terminated by either party for
material safety issues or the other party’s uncured material breach. In addition, Bayer and Janssen may terminate this agreement with
60 days’ advance written notice for convenience at any time, or immediately for our bankruptcy or change of control.

In January 2014, we entered into a second collaboration agreement with Bayer and Janssen to further study the safety and efficacy of
Andexanet alfa as a reversal agent to rivaroxaban through our Phase 3 studies. Our original collaboration agreement with Bayer and
Janssen covers the conduct of a Phase 2 proof-of-concept study. The second collaboration agreement covers the conduct of Phase 3
studies of Andexanet alfa with rivaroxaban and any potential U.S. and EU regulatory approval of Andexanet alfa as reversal agent of
rivaroxaban. The Phase 3 studies are ongoing. Under this Phase 3 collaboration agreement, we received an upfront payment of $10.0
million and are eligible to receive additional development and regulatory milestone payments of up to $15.0 million. These payments
represent the total consideration under this agreement. Bayer and Janssen will continue to provide development and regulatory
guidance for the program.

This Phase 3 collaboration agreement will continue in force until the approval of Andexanet alfa as a reversal agent for rivaroxaban by
the FDA and EMA. Bayer and Janssen may terminate this agreement for convenience with 60 days’ advance written notice or for our
bankruptcy or change of control. In addition, either party may terminate this agreement for the other party’s uncured material breach
or material safety issues or we can also terminate this agreement for failure of the Phase 3 studies.

Under both agreements with Bayer and Janssen, we retain full, worldwide development and commercial rights to Andexanet alfa.

Collaboration with Daiichi Sankyo

In June 2013, we entered into an agreement with Daiichi Sankyo, to include subjects dosed with edoxaban, Daiichi Sankyo’s Factor
Xa inhibitor product, in one of our proof-of-concept studies of Andexanet alfa. We are responsible for the cost of conducting this
clinical study. Under the terms of the agreement, Daiichi Sankyo provided us with an upfront fee of $6.0 million. Daiichi Sankyo may
terminate the agreement at any time. We are obligated to perform preclinical proof-of-concept studies and participate on a JCC with
Daiichi Sankyo to oversee the collaboration activities under the agreement. The total non-contingent consideration under this
agreement of $3.0 million was fully recognized as revenue on a straight-line basis over the estimated non-contingent performance
period through the first quarter of 2014. In February 2014, we resolved the contingent portion of the arrangement which was tied to
pre-clinical studies. The contingent consideration under this agreement of $3.0 million is being recognized over the remaining
estimated period of performance through the first quarter of 2015.

In July 2014, we entered into a second collaboration agreement with Daiichi Sankyo to evaluate Andexanet alfa as a reversal agent for
the oral Factor Xa inhibitor edoxaban through Phase 3 studies. The second collaboration agreement covers the conduct of Phase 3
studies of Andexanet alfa with edoxaban and any potential U.S. and EU regulatory approval of Andexanet alfa as a reversal agent for
edoxaban. Under this Phase 3 collaboration agreement we received an upfront payment of $15.0 million and are eligible to receive
additional development and regulatory milestone payments of up to $25.0 million. These payments represent the total consideration
under this agreement. Daiichi Sankyo will continue to provide development and regulatory guidance for the program.

This Phase 3 collaboration agreement will continue in force until the approval of Andexanet alfa as a reversal agent for edoxaban by
the FDA and EMA. Daiichi Sankyo may terminate this agreement for convenience with 60 days’ advance written notice or for our
bankruptcy or change of control. In addition, either party may terminate this agreement for the other party’s uncured material breach
or material safety issues, and we can also terminate this agreement for failure of the Phase 3 studies.

Under both agreements with Daiichi Sankyo, we retain full, worldwide development and commercial rights to Andexanet alfa.

Antidote pharmacoeconomics

Major bleeding is the most clinically relevant side effect of anticoagulant treatment across all anticoagulants and clinical settings.
Clinical trial results suggest that the frequency of major bleeding associated with the administration of Factor Xa inhibitors ranges
from 1% to 4% per year, depending on the underlying medical condition and the specific Factor Xa inhibitor. The clinical costs of a
major bleeding event in anticoagulant treated patients are estimated to be $15,000 to $52,000 per patient during the year following the
event. Based on the frequency of bleeding rates suggested by clinical trials and our projection of 23 million to 36 million patients
treated annually with Factor Xa inhibitors in the G7 countries, we believe that by 2020, the annual costs to the healthcare system to
treat major bleeding episodes in patients treated with a Factor Xa inhibitor may exceed $10 billion. We believe that an effective Factor
Xa antidote represents a potentially cost-effective way to manage these healthcare system costs.

Our hematologic cancer and inflammation product candidates

Our early stage development programs are focused on developing small molecule kinase inhibitors for the treatment of hematologic
cancers and inflammatory diseases. Kinases are enzymes that act on and modify the activity of different proteins. Syk and JAK are
clinically validated kinase targets involved in key signaling pathways that are important in certain hematologic cancers and
inflammatory disorders. We have focused on the discovery and development of specific inhibitors of Syk and dual inhibitors of both
Syk and JAK based on the unique roles of these kinases in NHL, CLL, allergic asthma, rheumatoid arthritis, or RA, and other
inflammatory diseases.

Syk overview

Syk is a cell signaling enzyme that is found in certain white blood cells, including B-cells, basophils, neutrophils, monocytes, and
tissue macrophages and mast cells, and is important for controlling the activity and recruitment of these cells. Scientists have focused
on the role of Syk in B-cell cancers, such as NHL and CLL, as well as certain inflammatory diseases, such as allergic asthma and RA.
B-cell activation is driven by the B-cell receptor, or BCR, whose signaling promotes cell proliferation, adhesion and survival in NHL
and CLL. Syk acts downstream of the BCR, and blocking Syk activity in preclinical models results in an inhibition of proliferation, a
disruption of tumor cell adhesion and cell death in malignant B-cells. Inhibitors of the BCR pathway, including the Syk inhibitor
fostamatinib being developed by Rigel Pharmaceuticals, Inc. and the Syk inhibitor entospletinib being developed by Gilead Sciences,
Inc., or Gilead, have been shown to have activity in NHL and CLL

JAK overview

The JAK kinases are a family of related tyrosine kinases that play key roles in cytokine signaling involved in immune processes. JAK
activation and signaling is directly downstream from receptors for several cytokines that are integral to normal lymphocyte activation,
proliferation and function. JAK also plays a role in malignant lymphocytes, including the survival and proliferation of CLL cells as
well as cytokine signaling in certain NHL and other cancers. Leading clinicians have hypothesized that these JAK-related cytokines
play a key role in promoting tumor survival and growth and that JAK inhibition may be effective in interrupting signaling processes
involved in tumor cells that have mutated and are no longer entirely dependent on B-cell signaling via BCR.

Cerdulatinib—dual Syk/JAK inhibitor

The lead compound in our kinase development effort, Cerdulatinib, is a potent inhibitor of both Syk and JAK. We believe that
Cerdulatinib may be able to treat certain diseases that involve Syk-BCR signaling and cytokine-JAK signaling. Based on the inhibition
of these key pathways, we are currently focused on developing Cerdulatinib for NHL, CLL and other hematologic cancers, with a
focus on patients with certain treatment-resistant mutations, including those targeting the BTK and PI3K kinases, and certain
inflammatory diseases. In October 2013, we initiated a Phase 1/2a proof-of-concept study in NHL and CLL and reported interim data
from the Phase 1 portion of this study at the American Hematology Association Meeting in December 2014. We are advancing
Cerdulatinib into the Phase 2a portion of the study which includes expansion cohorts at the recommended Phase 2 dose.

NHL and CLL

Lymphoma is a large class of hematologic cancer that affects the B-cell and T-cell lymphocytes in lymph nodes. In 2011, lymphoma
affected an estimated 660,000 people in the United States, with 500,000 of them suffering from the NHL varieties of the disease. NHL
is often aggressive, marked by rapidly growing tumors in the lymph nodes, spleen, liver, bone marrow and other organs.

CLL is also a hematologic cancer that affects B-cell lymphocytes in the blood and bone marrow and is the most common type of
leukemia. In 2011, approximately 100,000 patients had CLL in the United States. As it advances, usually slowly, CLL results in
swollen lymph nodes, spleen and liver and eventually in anemia and infections.

Despite the introduction of novel therapies for B-cell NHL and CLL, some patients fail to go into remission and of those who do attain
remission, many relapse and develop refractory disease and therefore need alternative therapies. The heterogeneity and severity of B-
cell malignancies may warrant simultaneous targeting of multiple disease-relevant pathways. Dual inhibition of Syk and JAK
represents such a strategy and may have several benefits relative to selective kinase inhibition, such as gaining control over a broader
array of disease etiologies, reducing the probability of selection of alternate disease growth mechanisms, and the potential that an
overall lower level suppression of multiple targets may be sufficient to modulate disease activity.

Cerdulatinib is a highly potent inhibitor of Syk and JAK activity in blood cells from human volunteers. In preclinical studies,
inhibition of Syk and JAK, via Cerdulatinib, was active in a broad panel of B-cell lymphoma cell lines. Cerdulatinib was more
effective than Syk-specific inhibition in these cell lines, suggesting that Cerdulatinib may be useful in the treatment of a broad range
of B-cell lymphomas, including patients with diffuse large B-cell lymphoma, or DLBCL, an aggressive form of NHL that affects over
80,000 patients in the G7 countries, and patients with hard to treat mutations. For example, Cerdulatinib was shown to be effective in
cell lines dependent on NFkB mutations for their survival. Current therapies and those in development, including those targeting the
BTK and PI3K kinases, have limited activity in DLBCL patients with these mutations. In addition, preclinical data suggest that dual
Syk/JAK inhibition with Cerdulatinib may also have activity in patients with an inadequate response to novel specific kinase inhibitors
in development for NHL and CLL. Our strategy includes targeting Cerdulatinib for certain CLL and NHL patient populations, such as
those with specific genetic mutations or those who have not responded adequately to other treatments. For example, it is estimated that
approximately one third of patients become refractory to standard CLL therapy. We believe these indications could potentially
represent a significant commercial opportunity if we are able to develop an effective therapy.

Based on the preclinical data and our understanding of the role of Syk and JAK signaling in B-cell cancers, we initiated an open label
Phase 1/2a proof-of-concept study in NHL and CLL patients who have failed or relapsed on existing marketed therapies or products in
development, including patients with identified mutations, in October 2013. In the initial phase of this study, we are evaluating the
safety and activity of Cerdulatinib using escalating doses. Interim results from the Phase 1 dose-escalation portion of the study
demonstrated that Cerdulatinib is active and well tolerated, including patients who have received prior BTK and P13K inhibitor
therapies. Based on these interim data, we are advancing Cerdulatinib into the Phase 2a portion of the study which includes expansion
cohorts in patients at the recommended Phase 2 dose. This will allow us to test in patients what we have previously demonstrated in
primary tumor cells and in vitro studies – that there are certain genetic and clinical subtypes of CLL and NHL where inhibition of both
Syk and JAK by Cerdulatinib may provide a clinical benefit. The Phase 1 study is ongoing as the maximum tolerated dose of
Cerdulatinib has not been reached. We anticipate that we will begin enrolling patients during 2015. Depending on the overall results of
the study, we would expect to further study Cerdulatinib in CLL and/or NHL either alone or in combination with other approved
products or with other drugs in development.

Selective Syk inhibitors

We have entered into a collaboration agreement with Biogen Idec, pursuant to which Biogen Idec is leading the development and
commercialization of selective Syk inhibitors for inflammatory disorders. Biogen Idec is currently conducting preclinical evaluation of
highly selective Syk inhibitors for allergic asthma and other inflammatory disorders such as rheumatoid arthritis.

Allergic asthma

Allergic asthma is a chronic inflammatory disorder of the lungs and respiratory passages that arises from a response to an allergen or
pathogen. Asthma affects the lower respiratory tract and is marked by episodic flare-ups, or attacks, that can be life threatening. In
patients with this disorder, allergens, such as pollen, bind to and trigger cross-linking of the IgE/Fc receptor complexes on the surface
of mast cells. This results in the initiation of a cascade of intracellular signals to mount an immune response resulting in swelling and
inflammation of the airways. When this process occurs repeatedly over time, it creates persistent inflammation of the upper and lower
airway passages, resulting in the chronic congestion and airway obstruction associated with allergic rhinitis and asthma, respectively.
Syk selective inhibitors are designed to bind to Syk in mast cells to interrupt the signal from the IgE/Fc receptor complex, potentially
inhibiting the immune response to the allergen in a way that may be effective in both the short and long-term control of allergic
asthma.

Elinogrel — P2Y12 receptor inhibitor

Our product candidate Elinogrel is an oral and intravenous, competitive and reversible inhibitor of the P2Y12 platelet receptor.
Products that block P2Y12, such as clopidogrel, prasugrel and ticagrelor, are indicated to reduce myocardial infarction, stroke and
death in patients at high risk of a myocardial infarction. The current agents have a number of limitations that reduce efficacy or
decrease safety, such as slow onset, lack of reversibility, lack of intravenous delivery and non-competitive mechanism of action.
Elinogrel has been studied in two Phase 2 studies and was previously partnered with Novartis Pharma A.G., or Novartis. We re-
acquired full development and commercial rights to the program from Novartis in 2012. We are not currently pursuing development of
Elinogrel due to the expense of the large Phase 3 studies needed for approval in current indications, however, we may pursue
development of Elinogrel in smaller indications or with a partner in the future.

Sales and marketing

Assuming Betrixaban and Andexanet alfa are approved by the FDA and other regulatory authorities, we intend to commercialize both
molecules using a hospital-based sales force in the United States, and possibly marketing in other major markets. To achieve global
commercialization, we anticipate using a variety of distribution agreements and commercial partnerships in those territories where we
do not establish a sales force. We expect to target our U.S. sales and marketing efforts at the approximately 1,500 hospitals and out-
patient acute care settings that would account for the large majority of the prescribing base for our product candidates, if approved.
We plan to commercialize both of our thrombosis product candidates in the U.S. with a hospital-based sales force of approximately
125 to 150 sales representatives. We expect that our commercial infrastructure would be comprised of several proven, experienced
marketing and sales management professionals along with a reimbursement support and hospital formulary specialist team. In
addition, we intend to develop and publish health economic models demonstrating the value of Betrixaban and Andexanet alfa to
hospital administrators and third party payors.

Research and development

We invest significant effort defining and refining our research and development process and internally teaching our approach to drug
development. We favor programs with early decision points, well-validated targets, predictive preclinical models and clear paths to
regulatory approval, all in the context of a target product profile that can address significant unmet or underserved clinical needs.
Members of our discovery, research and development team have played central roles in discovering and developing a number of
promising candidates over the past 20 plus years while at Portola, and while at Millennium Pharmaceuticals, Inc., or Millennium, and
COR Therapeutics, Inc., two early developers of thrombosis therapies. They have used unique biological insights to develop in vitro
and in vivo models that speed development. We also selectively leverage outside collaborators to expand into potential additional
indications. As our product candidates progress through clinical development, we have focused and will increasingly focus our
scientific efforts on supporting that development.

We emphasize data-driven decision making, strive to advance or terminate projects early based on clearly defined go/no go criteria,
prioritize programs at all stages and allocate our capital to the most promising programs. Our current development-stage portfolio
consists of three compounds discovered through our internal research efforts and one discovered by Portola scientists during their time
at a prior company. In addition we are actively seeking to identify attractive external opportunities. We utilize the same critical filters
for investment when evaluating external programs as we do with our own, internally-derived candidates.

Collaboration and license agreements

Betrixaban

Millennium agreements

In November 2003, we entered into an asset purchase agreement to acquire patent rights and intellectual property to an ADP Receptor
Antagonist Program, or the ADP Program, and a Platelet Research Program from Millennium. We are obligated to pay to Millennium
royalties at tiered single-digit percentages of net sales of certain ADP Program products if product sales are ever achieved, which
royalty payments will continue until the expiration of the relevant patents or ten years after launch, whichever is later.

In August 2004, we entered into an agreement to license from Millennium certain exclusive rights to research, develop and
commercialize certain compounds that inhibit Factor Xa, including Betrixaban, or the Factor Xa Program. The license agreement
requires us to make certain license fee, milestone, royalty and sublicense sharing payments to Millennium as we develop,
commercialize or sublicense Betrixaban and other products from the Factor Xa Program. The Millennium license agreement further
provides for additional payments to Millennium of up to $35.0 million based on the achievement of regulatory filing and approval
milestones related to the Factor Xa Program. In addition, we are obligated to pay Millennium royalties at tiered single-digit
percentages of net sales of any Factor Xa Program products if product sales are ever achieved. This license agreement will continue in
force, on a product-by-product and country-by-country basis, until the expiration of the relevant patents or ten years after the launch,
whichever is later, or termination by either party pursuant to the agreement. This license agreement may be terminated by either party
for the other party’s uncured material breach. In addition, we may terminate this agreement for convenience with 30 days’ advance
written notice.

In December 2005, we amended both the asset purchase agreement for the ADP Program and the license agreement for the Factor Xa
Program. In connection with this amendment, we have made aggregate cash payments to Millennium of $6.0 million and issued to
Millennium equity securities with an aggregate value of $1.8 million through December 31, 2014.

Lee’s agreement

In January 2013, we entered into a clinical collaboration agreement with Lee’s to jointly expand our Phase 3 APEX study of
Betrixaban into China. Under the agreement, Lee’s provided us with an upfront and non-refundable payment of $700,000 and will
reimburse our costs in connection with the study to support the expansion of the APEX study into China. Lee’s will also lead
regulatory interactions with China’s State Food and Drug Administration for the study. We granted Lee’s an exclusive option to
negotiate for the exclusive commercial rights to Betrixaban in China, which may be exercised by Lee’s for 60 days after it receives the
primary data analysis report from the study. We may, at any time prior to the unblinding of the APEX study data, terminate the option
and the agreement by providing Lee’s with written notification and making a termination payment. We reserved the right to terminate
Lee’s option under certain specified circumstances. If the parties fail to reach agreement on the terms of the commercial rights and we
commercialize Betrixaban in China ourselves or grant a third party the right to do so, or if we terminate Lee’s option under the
agreement, we are required to make certain payments to Lee’s.

Unless earlier terminated, this agreement will continue until superseded by the execution of the agreement that grants to Lee’s the
commercial rights to Betrixaban in China. This agreement may be terminated by Lee’s for convenience with 90 days’ advance written
notice, or by either party for the other party’s uncured material breach or any material safety issue of Betrixaban. In addition, this
agreement will automatically terminate if we fail to reach agreement to grant Lee’s the commercial rights to Betrixaban in China, or if
we terminate Lee’s option.

Andexanet alfa

BMS and Pfizer agreements

In October 2012, we entered into a collaboration agreement with BMS and Pfizer, to include subjects dosed with apixaban, their
jointly owned product candidate, in one of our Phase 2 proof-of-concept studies of Andexanet alfa. We are responsible for the cost of
conducting such clinical studies. This agreement will continue in force until the completion of the studies or termination by either
party pursuant to the agreement.

In January 2014, we entered into a second collaboration agreement with BMS and Pfizer to further study the safety and efficacy of
Andexanet alfa as a reversal agent to apixaban through our ongoing Phase 3 studies. Under the terms of the Phase 3 agreement, we
received an upfront payment of $13.0 million and are eligible to receive additional development and regulatory milestone payments of
up to $12.0 million. These payments represent the total consideration under this agreement. BMS and Pfizer will continue to provide
development and regulatory guidance for the program.

Under both agreements with BMS and Pfizer, we retain full, worldwide development and commercial rights to Andexanet alfa.

Bayer and Janssen agreements

In February 2013, we entered into a clinical collaboration agreement with Bayer and Janssen to include subjects dosed with
rivaroxaban, their Factor Xa inhibitor product, in one of our Phase 2 proof-of-concept studies of Andexanet alfa. We are responsible
for the cost of conducting such clinical studies. This agreement will continue in force until the later of the completion of the studies
and the fulfillment of certain other conditions set forth in the agreement, unless earlier terminated by either party pursuant to the
agreement.

In January 2014, we entered into a second collaboration agreement with Bayer and Janssen to further study the safety and efficacy of
Andexanet alfa as a reversal agent to rivaroxaban through our ongoing Phase 3 studies. Our original collaboration agreement with
Bayer and Janssen covers the conduct of a Phase 2 proof-of-concept study. The second collaboration agreement covers the conduct of
Phase 3 studies of Andexanet alfa with rivaroxaban and any potential U.S. and EU regulatory approval of Andexanet alfa as reversal
agent of rivaroxaban. Under this Phase 3 collaboration agreement, we received an upfront payment of $10 million and are eligible to
receive additional development and regulatory milestone payments of up to $15.0 million. These payments represent the total
consideration under this agreement. Bayer and Janssen will continue to provide development and regulatory guidance for the program.

Under both agreements with Bayer and Janssen, we retain full, worldwide development and commercial rights to Andexanet alfa.

Daiichi Sankyo agreement

In June 2013, we entered into an agreement with Daiichi Sankyo to include subjects dosed with edoxaban, their Factor Xa inhibitor
product, in one of our proof-of-concept studies of Andexanet alfa. We are responsible for the costs of conducting this clinical study.
This agreement will continue in force until the later of the completion of the studies and the fulfillment of certain other conditions set
forth in the agreement, unless earlier terminated by either party pursuant to the agreement. This agreement does not grant Daiichi
Sankyo any other rights with respect to the development or commercialization of Andexanet alfa.

In July 2014, we entered into a second collaboration agreement with Daiichi Sankyo to further study the safety and efficacy of
Andexanet alfa as a reversal agent to edoxaban through Phase 3 studies. The second collaboration agreement covers the conduct of
Phase 3 studies of Andexanet alfa with edoxaban and any potential U.S. and EU regulatory approval of Andexanet alfa as a reversal
agent for edoxaban. Under this Phase 3 collaboration agreement we received an upfront payment of $15.0 million and are eligible to
receive additional development and regulatory milestone payments of up to $25.0 million. These payments represent the total
consideration under this agreement. Daiichi Sankyo will continue to provide development and regulatory guidance for the program.

Under both agreements with Daiichi Sankyo, we retain full, worldwide development and commercial rights to Andexanet alfa.

Syk Selective Inhibitors

Biogen Idec agreement

In October 2011, we entered into an exclusive worldwide license and collaboration agreement with Biogen Idec to develop and
commercialize PRT2607 and certain highly selective Syk inhibitors. Biogen Idec made an upfront cash payment to us of $36.0 million
and purchased 636,042 shares of our Series 1 convertible preferred stock for an aggregate purchase price of $9.0 million. Pursuant to
the agreement, we had an option to lead development and commercialization efforts in the United States for select smaller indications,
as well as discovery efforts for follow-on Syk inhibitors and an option to co-promote the drug alongside Biogen Idec with major
indications in the United States. In November 2012, we elected to exercise our option to convert the agreement to a fully out-licensed
agreement. After such election, we relinquished our right to share profits from sales of products related to Syk inhibitors, but are
entitled to receive tiered royalties at low-double-digit percentages (not greater than 20%) from sales of these products by Biogen Idec
if product sales are ever achieved. We no longer have an obligation to fund the program under the agreement. The agreement also
provides for additional payments to us of up to approximately $370 million based on the occurrence of certain development and
regulatory events. Biogen Idec has elected to assume all future development work for Syk inhibitors, including the major indications,
such as rheumatoid arthritis and allergic asthma. To date, no development or regulatory events provided by the agreement have
occurred and no royalties have been triggered under our agreement with Biogen Idec. This agreement will continue in force until
either party terminates the agreement pursuant to the agreement or until the expiration of Biogen Idec’s royalty obligations pursuant to
the agreement, which is the later of the expiration of all relevant patents and regulatory exclusivities or 10 years after first commercial
sale. Biogen Idec may terminate the agreement without cause upon 120 days’ written notice or for cause if Portola commits a material
breach of its obligations under the agreement and fails to cure the breach. We may terminate the agreement with proper written notice
for cause if Biogen Idec commits a material breach of its obligations under the agreement and fails to cure the breach for 90 days (or
60 days for nonpayment of an amount due) after written notice is given, if Biogen Idec commences a legal action challenging the
validity, enforceability or scope of any of the patents subject to the agreement or in the event of bankruptcy, reorganization,
liquidation or receivership of Biogen Idec. In such event, we would regain all development rights and Biogen Idec would have no
further payment obligations pursuant to the agreement.

Astellas agreement

In June 2005, we entered into an agreement to license certain exclusive rights to research, develop and commercialize Syk inhibitors
from Astellas Pharma, Inc., or Astellas, which agreement was subsequently amended and restated in December 2010. The agreement
with Astellas, as amended, requires us to make certain milestone, royalty and sublicense revenue sharing payments to Astellas as we
develop, commercialize or sublicense Syk inhibitors. Pursuant to our agreement with Astellas, we made cash milestone payments to
Astellas of $500,000 in May 2005, $500,000 in May 2006 and $1.0 million in December 2008, as we elected to continue our
development of Syk inhibitors. In addition, for each Syk inhibitor product, we may be required to make up to $71.5 million in
additional milestone payments to Astellas if the product is approved for multiple distinct indications in the United States, Europe and
Japan and the product attains certain sales levels. If we grant a sublicense to develop and commercialize Syk inhibitors, we are
required to pay Astellas 20% of any payments (excluding royalties) received under the sublicense agreement. In 2011, in connection
with our receipt of the upfront payment under our agreement with Biogen Idec, we made a cash payment to Astellas of $7.2 million. In
addition, we are required to pay Astellas royalties at low single-digit percentages for worldwide sales for any Syk inhibitor product
made by us or our sublicensees. This agreement will continue in force, on a product-by-product and country-by-country basis, until the
expiration of relevant patents or ten years after the launch, whichever is later, or termination by either party pursuant to the agreement.
The agreement may be terminated by us for convenience upon 60 days’ written notice to Astellas or immediately upon written notice
if all major claims of all of the patents covered by the agreement are invalidated by competent judicial or administrative authorities in
the U.S. and no measure has been taken to appeal the invalidation. Either party may terminate the agreement upon written notice if the
other party is in material breach of its obligations under the agreement for reasons within its control and responsibility and has not
remedied the breach within 30 days of receiving written notice or in the event of bankruptcy, liquidation or receivership of the other
party.

Cerdulatinib

Aciex agreement (Nicox)

In February 2013, we entered into a license and collaboration agreement with Aciex Therapeutics, Inc., or Aciex, pursuant to which
we granted Aciex an exclusive license to co-develop and co-commercialize Cerdulatinib and certain related compounds for
nonsystemic indications, such as the treatment and prevention of ophthalmological diseases by topical administration and allergic
rhinitis by intranasal administration. In April 2014, this agreement was amended to release all rights for Cerdulatinib to us. The
collaboration is now focused on development of other related compounds for topical ophthalmic indications. Under the agreement, we
will share development costs with Aciex and be entitled to receive either a share of the profits generated by any eventual products or
royalty payments. We retain rights to other indications, including dermatologic disorders.

Manufacturing and clinical research agreements

CMC Biologics manufacturing agreement

In July 2014, we entered into an agreement with CMC ICOS Biologics, Inc., or CMC Biologics, a subsidiary of CMC Biologics
S.à.r.l., a privately-held contract manufacturing organization, pursuant to which CMC Biologics will manufacture clinical and
commercial supply of Andexanet alfa and perform pre-validation and validation work on our behalf. Andexanet alfa used in our
clinical studies is currently produced for us by CMC Biologics, who will also support our initial BLA submission and initial
commercial launch in the U.S.

Under the agreement, we are required to purchase an aggregate fixed number of batches of Andexanet alfa from CMC Biologics
beginning in 2015 through 2021. Total batch commitments under the agreement can be increased or decreased based on the
achievement of milestones relating to the regulatory approval process for Andexanet alfa, expansion of existing manufacturing
capacity and operational qualification of CMC Biologics’ manufacturing facilities. We made an upfront payment to CMC Biologics in
the amount of $10.0 million in July 2014 and made a reservation payment to CMC Biologics of $4.6 million in November 2014. Both
payments will be credited against our future purchases of batches under the agreement.

Total fixed commitments under the agreement for the purchases of clinical and commercial batches, not taking into account possible
price and batch adjustments per the terms of the agreement, are approximately $293.9 million. CMC Biologics also conducts pre-
validation and validation work pursuant to work orders under the arrangement.

The term of the agreement is seven years and may be early terminated by either party for the other party’s uncured material breach or
insolvency. We may also terminate the agreement if CMC Biologics is unable to add additional manufacturing capacity on a timely
basis, if certain manufacturing-related regulatory events do not occur before certain deadlines, or if the batch yield is below a certain
threshold, in which case we are not obligated to pay CMC Biologics a termination payment and CMC Biologics will be obligated to
refund the uncredited amounts of the upfront payment and reservation payment. In addition, we may terminate the agreement
unilaterally if we discontinue the development and commercialization of Andexanet alfa for regulatory, safety, efficacy or other
commercial reasons, or if the projected market demand or gross margin of Andexanet alfa is below a minimum threshold. A
termination agreement under these provisions will obligate us to pay CMC Biologics a termination fee between $5.0 million and $30.0
million, depending on the date of termination. The termination fee is highest from 2015 through 2017, and then decreases through
2021. Any remaining upfront payments or reservation payments we have made, not yet credited against the purchase of batches, at the
time of termination will be applied against the termination fee.

Lonza manufacturing agreement

We do not anticipate that supply from CMC Biologics, even as expanded, will be sufficient to meet projected worldwide demand for
Andexanet alfa, therefore, we are developing an improved and more cost-effective process at Lonza Group Ltd, or Lonza. In June
2013, we signed an agreement with Lonza to develop a commercial-scale manufacturing process for Andexanet alfa. However, the
first commercial material from Lonza will not become available until after our expected U.S. launch. In 2014 we completed our first
10,000 liter scale engineering batch with Lonza. The run successfully produced bulk drug substance that met our specifications and it
appeared highly comparable to previously manufactured material. However, the yield was lower than we expected and we determined
that the timeline needed to improve product yield at Lonza would result in a significant delay to our BLA submission on our intended
timeline. As a result, our BLA submission will use material from our ongoing CMC Biologics manufacturing process at an expanded
production facility being constructed at CMC Biologics. Our broader worldwide commercial supply of Andexanet alfa is still expected
to be manufactured by Lonza using what we anticipate will be an improved and more cost-effective process, with the first commercial
material from Lonza becoming available following our U.S. launch.

In October 2014, we entered into a new commercial manufacturing agreement with Lonza, replacing the 2013 agreement, to produce
commercial quantities of Andexanet alfa and perform pre-validation and validation work on our behalf following our U.S. launch.

Under this new agreement, we are required to purchase at least seven commercial batches of Andexanet alfa per year from Lonza,
over a period of five years following first regulatory approval of the product from Lonza’s facility. We may cancel these orders upon
written notice to Lonza, in which case, we will be obligated to pay a cancellation fee ranging from between €10.0 million (or $12.2
million based on the exchange rate as of December 31, 2014) and €13.3 million (or $16.2 million based on the exchange rate as of
December 31, 2014), depending on the time of cancellation and any applicable costs related to raw materials and certain pass-through
costs.

The agreement will terminate on the fifth anniversary of the date of the first regulatory approval and may be early terminated by either
party for the other party’s uncured material breach or insolvency or, prior to the first regulatory approval for any reason on not less
than twelve months prior written notice. In addition, we may also terminate the agreement if we discontinue the development or
commercialization of Andexanet alfa for regulatory, safety, efficacy or other commercial reasons and for technical reasons after
delivery of the first engineering batch but before delivery of the second engineering batch. In such circumstance we will be obligated
to pay a termination payment ranging from between €10.0 million (or $12.2 million based on the exchange rate as of December 31,
2014) and €15.0 million (or $18.3 million based on the exchange rate as of December 31, 2014), depending on the time of termination,
which includes the cancellation fee, and any applicable costs related to raw materials.

PPD development agreement

In January 2012, we entered into a master contract services agreement with PPD Development, LP, or PPD, under which PPD
provides administrative, data management and statistical analysis services relating to our APEX study. Pursuant to this agreement as
amended, PPD is responsible for overseeing and managing the conduct of the APEX study in Latin America. We will remain
ultimately responsible for the study and have separate agreements with the sites performing the study, other clinical research
organizations and other third party vendors. This agreement will remain in effect until the later of three years after its effective date or
the completion of services by PPD. Portola may terminate the agreement with 30 days’ notice or immediately upon a material breach
of the agreement by PPD that cannot be cured. PPD may terminate the agreement immediately upon a material breach of the
agreement by us that cannot be cured or, 30 days after giving notice of a curable material breach of the agreement by us, if we have
not cured such breach.

Hovione manufacturing agreement

In January 2007, we entered into a development and manufacturing service agreement with Hovione Inter Limited, or Hovione, as
amended on February 1, 2013, pursuant to which Hovione is producing the active pharmaceutical ingredient, or API, for Betrixaban
for use in our APEX study. Under the agreement, Hovione produces the API using our proprietary process and to our specified quality
standards and in compliance with applicable regulations. Hovione produces the API pursuant to work orders submitted by us and
agreed to by Hovione, though Hovione is not under any obligation to enter into any work order. The agreement remains in effect until
the later of seven years after its effective date or the completion of any outstanding work orders. The agreement may be extended
continuously for additional two-year periods upon agreement of the parties. We may terminate the agreement for convenience with 60
days’ written notice and either party may terminate the agreement with 60 days’ written notice upon the bankruptcy of the other party,
the failure of the other party to cure a material breach of the agreement within 30 days of receiving notice of such breach, the
occurrence of events that prevents the other party from performing its obligations or if either party determines that the agreement is
detrimental to its interests and can demonstrate that it would be in the best interests of both parties to terminate the agreement.

Competition

Our industry is highly competitive and subject to rapid and significant technological change. While we believe that our development
experience and scientific knowledge provide us with competitive advantages, we may face competition from large pharmaceutical and
biotechnology companies, smaller pharmaceutical and biotechnology companies, specialty pharmaceutical companies, generic drug
companies, academic institutions, government agencies and research institutions and others.

Many of our competitors may have significantly greater financial, technical and human resources than we have. Mergers and
acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a
smaller number of our competitors. Our commercial opportunity could be reduced or eliminated if our competitors develop or market
products or other novel technologies that are more effective, safer or less costly than any that will be commercialized by us, or obtain
regulatory approval for their products more rapidly than we may obtain approval for ours. Our success will be based in part on our
ability to identify, develop and manage a portfolio of drugs that are safer, more efficacious and/or more cost-effective than alternative
therapies.

Betrixaban

In the market for VTE prophylaxis in acute medically ill patients, Betrixaban, if approved, will compete with enoxaparin, which is
marketed as Lovenox by Sanofi-Aventis U.S. LLC and as a generic pharmaceutical by several manufacturers, and to a lesser extent
with other low molecular weight heparins. In addition, Betrixaban may face competition in the market for acute medically ill patients
from other Factor Xa inhibitors including apixaban, which is marketed by BMS and Pfizer, edoxaban, which is marketed by Daiichi
Sankyo, rivaroxaban, which is marketed by Bayer and Janssen, and the direct thrombin inhibitor dabigatran, which is marketed by
Boehringer Ingelheim GbmH, although none of these molecules is currently approved for use in that population. We believe, that in
light of the significant opportunity in this acute medically ill population, one of these agents will likely be tested in a Phase 3 study.
For example, in 2014, Janssen announced that it had initiated a Phase 3 study designed to evaluate the efficacy and safety of
rivaroxaban to reduce the risk of deep vein thrombosis, or DVT, and pulmonary embolism, or PE, due to a concurrent medical illness
for up to 45 days after hospital discharge. As the dosing regimen for an anticoagulant typically varies based on the indication in which
it is used and anticoagulants often work in one indication but not another, we and our clinical advisors think it is unlikely that a
significant number of physicians will choose to prescribe a Factor Xa inhibitor in the acute medically ill patient population absent a
relevant regulatory approval or clinical evidence supporting its use. In the future, owners of approved direct Factor Xa or thrombin
inhibitors may decide to develop them for VTE prophylaxis in the acute medically ill patient population although nothing is in
development for that indication to our knowledge. In addition, they or other competitors may decide to develop new therapies for VTE
prophylaxis in acute medically ill patients.

Andexanet alfa

Currently there are no therapies approved as antidotes for Factor Xa inhibitors. However, Andexanet alfa, if approved, may compete
with currently approved treatments designed to enhance coagulation including fresh frozen plasma, prothrombin complex
concentrates, rFVIIa, Vitamin K, protamine or whole blood. In addition, several companies have conducted clinical research on
compounds that are intended to reverse the effects of one or more direct Factor Xa inhibitors and which, if developed, may be
competitive with Andexanet alfa. One of these companies, Perosphere Inc., is in Phase 2 clinical development of its compound.

Cerdulatinib

In the market for the treatment of CLL and NHL, Cerdulatinib, if approved, will compete with existing therapies, such as rituximab,
and obinutuzumab which are marketed by Chugai Pharmaceutical Co., F. Hoffmann-LaRoche Ltd. and Genentech, Inc., ibrutinib,
which is marketed by Janssen and Pharmacyclics, Inc. idelalisib, which is marketed by Gilead; and potentially other therapies
currently in development by a number of different companies.

Syk Selective Inhibitors

In the market for treatment of allergic asthma, the Syk selective inhibitors, if approved, will compete with existing products, such as
inhaled corticosteroids, leukotriene modifiers and long-acting beta agonists and potentially with other products currently in
development by a number of different companies.

Intellectual property

Our success will significantly depend upon our ability to obtain and maintain patent and other intellectual property and proprietary
protection for our drug candidates, including composition-of-matter, dosage and formulation patents, as well as patent and other
intellectual property and proprietary protection for our novel biological discoveries and other important technology inventions and
know-how. In addition to patents, we rely upon unpatented trade secrets, know-how, and continuing technological innovation to
develop and maintain our competitive position. We protect our proprietary information, in part, using confidentiality agreements with
our commercial partners, collaborators, employees and consultants and invention assignment agreements with our employees. We also
have confidentiality agreements or invention assignment agreements with our commercial partners and selected consultants. Despite
these measures, any of our intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or
misappropriated, or such intellectual property and proprietary rights may not be sufficient to permit us to take advantage of current
market trends or otherwise to provide competitive advantages. For more information, please see “Risk factors—Risks related to
intellectual property.”

As of December 31, 2014, we owned 29 issued U.S. patents, 37 U.S. patent applications and 133 issued patents and 199 patent
applications in other jurisdictions. We also co-owned 11 additional patents and patent applications. In addition, as of December 31,
2014, we have licensed 186 issued patents and 46 patent applications from third parties, mostly on an exclusive basis. The patent
portfolios for our leading product candidates as of December 31, 2014 are summarized below:

Betrixaban

Our Betrixaban patent portfolio includes 16 issued U.S. patents and 10 U.S. patent applications covering the composition of and
methods of making and using Betrixaban or its analogs, including those owned by us and those licensed from Millennium. The U.S.
issued patents relating to the composition of matter of Betrixaban are not due to expire before September 2020 and may be extended
up to September 2025, if Betrixaban receives regulatory approval and if the necessary eligibility requirements are met, pursuant to the
Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act. Betrixaban may
also be eligible for an additional six months of pediatric exclusivity under the Best Pharmaceuticals for Children Act as described
below. Related international patent applications have issued or been allowed in 35 countries and are pending in Europe and a number
of other countries. These international patents and patent applications, if issued, would not be due to expire before September 2020.

In the United States, the Hatch-Waxman Act permits a patent term extension of up to five years for one patent related to an approved
therapy. The length of the extension is based upon the period of time the therapy has been under regulatory review. We believe that, if
Betrixaban is approved, we will be eligible for a full five year patent term extension for one patent relating to Betrixaban.

In addition, in the United States, the Best Pharmaceuticals for Children Act provides that the period of patent exclusivity for a drug
may be extended for six months if the owner of the drug conducts studies of the drug in children pursuant to a request from the FDA.
We believe that there may be pediatric applications for Betrixaban and, therefore, that it may be possible for us to obtain an additional
six months of pediatric exclusivity of Betrixaban by conducting FDA-requested studies in children.

Andexanet alfa

Our Factor Xa inhibitor antidote patent portfolio is wholly owned by us and includes five issued U.S. patents and 13 U.S. patent
applications covering the composition of and methods of making and using Andexanet alfa or its analogs.

The U.S. issued patents are not due to expire before June 2030. A related international patent application has issued in Australia, New
Zealand, China, Japan and Mexico, another related international patent application has issued in New Zealand, Mexico and Singapore
and international patent applications are pending in Europe and a number of other countries. These international patents and patent
applications, if issued, would not be due to expire before September 2028.

Cerdulatinib

Our dual Syk-JAK inhibitor patent portfolio is owned in part by us and licensed in part from Astellas and includes four issued U.S.
patents covering the composition of and methods of making and using Cerdulatinib or its analogs. The last to expire of the U.S.
patents is not expected to expire before July 2029. Related international patent applications have issued or been allowed in 16
countries and are pending in Europe and a number of other countries. These international patents and patent applications, if issued,
would not be due to expire before April 2029.

Syk Selective Inhibitors

Our Syk-specific inhibitor patent portfolio is owned by us and includes five issued U.S. patents covering the composition of and
methods of making and using PRT2607 or its analogs. The last to expire of the U.S. patents is currently expected to expire in July
2029. Related international patent applications have issued or been allowed in five countries and are pending in Europe and a number
of other countries. These international patents and patent applications, if issued, would not be due to expire before April 2029.

Manufacturing

We rely on contract manufacturing organizations, or CMOs, to produce our drug candidates in accordance with the FDA’s and EMA’s
current Good Manufacturing Practices, or cGMP, regulations for use in our clinical studies. The manufacture of pharmaceuticals is
subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of
record keeping, production processes and controls, personnel and quality control. Our small molecule drug candidates, Betrixaban,
Cerdulatinib and PRT2607, are manufactured using common chemical engineering and synthetic processes from readily available raw
materials. We rely on Hovione to produce API for Betrixaban for our APEX study. Pursuant to a development and manufacturing
service agreement between us and Hovione, Hovione produces the API for Betrixaban using our proprietary process and to our
specified quality standards and in compliance with applicable regulations. Hovione produces the API pursuant to work orders
submitted by us and agreed to by Hovione, though Hovione is not under any obligation to enter into any work order and may terminate
the agreement under certain conditions. Andexanet alfa is a recombinant biologic molecule produced in living cells, a process that is
inherently complex and requires specialized knowledge and extensive process optimization and product characterization to transform
laboratory scale processes into reproducible commercial manufacturing processes. We have signed a development and manufacturing
service agreement with CMC Biologics and Lonza and who are both currently working on multiple strategies to develop an
economical, commercial scale production process for Andexanet alfa. Pursuant to these agreements, CMC Biologics and Lonza will
each develop a full commercial scale manufacturing process for Andexanet alfa and produce approval enabling validation lots.

We currently have no plans to build our own clinical or commercial scale manufacturing capabilities. To meet our projected needs for
clinical supplies to support our activities through regulatory approval and commercial manufacturing, the CMOs with whom we
currently work will need to increase scale of production or we will need to secure alternate suppliers. We believe that there are
multiple potential sources for our contract manufacturing, but we have not engaged alternate suppliers in the event that our current
CMOs are unable to scale production. Our relationships with CMOs are managed by internal personnel with extensive experience in
pharmaceutical development and manufacturing.

If we are unable to obtain sufficient quantities of drug candidates or receive raw materials in a timely manner, we could be required to
delay our ongoing clinical studies and seek alternative manufacturers, which would be costly and time-consuming.

Government regulation

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements
upon the clinical development, manufacture and marketing of pharmaceutical products. These agencies and other federal, state and
local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling,
storage, record keeping, approval, advertising and promotion of our products.

The process required by the FDA before product candidates may be marketed in the United States generally involves the following:

(cid:121) nonclinical laboratory and animal testing of the product including some that must be conducted in accordance with Good

Laboratory Practices or GLPs;

(cid:121)

submission of an investigational new drug application, or IND, which must become effective before human clinical trials
may begin;

adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug candidate for
its intended use;

(cid:121) pre-approval inspection of manufacturing facilities and selected clinical investigators for their compliance with Good

Manufacturing Practices, or GMP, and Good Clinical Practices or GCPs; and

(cid:121) Approval of an NDA, for a drug or a BLA, for a biologic prior to commercial marketing for specific indications for use.

The testing and approval process requires substantial time, effort and financial resources. Prior to commencing the first clinical trial
with a product candidate, we must submit an IND to the FDA. The IND automatically becomes effective 30 days after receipt by the
FDA, unless the FDA, within the 30-day time period, raises concerns about the supporting safety data or questions about the design of
the clinical trial and imposes a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns
before the clinical trial can begin. Submission of an IND may not result in FDA authorization to commence a clinical trial. A separate
submission to the existing IND must be made for each successive clinical trial conducted during product development. Further, an
independent institutional review board for each medical center proposing to conduct the clinical trial must review and approve the
plan for any clinical trial and its informed consent form before the clinical trial commences at that center. Regulatory authorities or an
institutional review board or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the
subjects or patients are being exposed to an unacceptable health risk. Some studies also include an Independent Data Monitoring
Committee, or IDMC, which receives special access to unblinded data during the clinical trial and may halt the clinical trial if it
determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. The IDMC
may halt a trial if it feels that the data demonstrate efficacy of the drug and it is no longer ethical to withhold the drug from patients in
the control arm of the study.

For purposes of NDA or BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

(cid:121) Phase 1 – Studies are initially conducted to test the product candidate for safety, dosage tolerance, absorption,

metabolism, distribution and excretion in healthy volunteers or patients.

(cid:121) Phase 2 – Studies are conducted with groups of patients with a specified disease or condition to provide enough data to

evaluate the preliminary efficacy, optimal dosages and dosing schedule and expanded evidence of safety. Multiple Phase
2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical
trials.

(cid:121) Phase 3 – Phase 3 clinical trials are undertaken in large patient populations to further evaluate dosage, to provide

statistically significant evidence of clinical efficacy and to further test for safety in an expanded patient population at
multiple clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product
compared to placebo or current standard of care and provide an adequate basis for product labeling. These trials may be
done globally to support global registrations.

(cid:121) The FDA may require, or companies may pursue, additional clinical trials after a product is approved. These so-called
Phase 4 studies may be made a condition to be satisfied after approval. The results of Phase 4 studies can confirm the
effectiveness of a product candidate and can provide important safety information gathered in routine medical practice.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information
about the chemistry and physical characteristics of the product candidate as well as finalize a process for manufacturing the product in
commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing
quality batches of the product candidate and, among other things, the sponsor must also develop methods for testing the identity,
strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies
must be conducted to establish an appropriate shelf life for the product candidate including data demonstrating that the product
candidate does not undergo unacceptable deterioration over its shelf life.

NDA or BLA submission and review by the FDA

The results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of an NDA or BLA. The
submission of an NDA or BLA requires payment of a substantial User Fee to FDA. The FDA may convene an advisory committee to
provide independent expert clinical opinion on application review questions. The FDA reviews applications to determine, among other
things, whether a product is safe and effective for its intended use and whether the manufacturing controls are adequate to assure
consistent batch to batch purity, identity, potency, and strength of the product candidate. Before approving an NDA or BLA, the FDA
will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines
that the manufacturing processes, equipment and facilities are in compliance with cGMP requirements. Once the NDA submission has
been accepted for filing (sixty days post receipt of the application by the FDA), the FDA typically takes ten months to review the
application and respond to the applicant, which can take the form of either a Complete Response Letter or Approval. The review
process is often significantly extended by FDA requests for additional information or clarification. The FDA may delay or refuse
approval of an NDA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-
marketing testing and surveillance to monitor safety or efficacy of a product. FDA approval of any NDA or BLA submitted by us will
be at a time the FDA chooses. Also, if regulatory approval of a product is granted, such approval may entail limitations on the
indicated uses for which such product may be marketed and require post-marketing requirements such as a Risk Evaluation and
Mitigation Procedure or a Phase 4 study. Once approved, the FDA may withdraw the product approval if compliance with pre- and
post-marketing regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, the
FDA may require Phase 4 post-marketing studies to monitor the effect of approved products, and may limit further marketing of the
product based on the results of these post-marketing studies.

The FDA has a fast track program that is intended to expedite or facilitate the process for reviewing new drugs and biological products
that meet certain criteria. Specifically, new drugs and biological products are eligible for fast track designation if they are intended to
treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. Fast track
designation applies to the combination of the product and the specific indication for which it is being studied. For a fast track product,
the FDA may consider review of completed sections of an NDA or BLA on a rolling basis provided the sponsor provides, and the
FDA accepts, a schedule for the submission of the completed sections of the NDA or BLA. Under these circumstances, the sponsor
pays any required user fees upon submission of the first section of the NDA or BLA. A fast track designated drug candidate may also
qualify for priority review, under which the FDA reviews the NDA or BLA in a total of six months rather than ten months after it is
accepted for filing.

Post-approval requirements

Any products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including
record-keeping requirements and reporting of adverse experiences. Drug and biologic manufacturers and their subcontractors are
required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections
by the FDA and certain state agencies for compliance with GMP, which impose certain procedural and documentation requirements
upon us and our third-party manufacturers. We cannot be certain that we or our present or future suppliers will be able to comply with
the GMP regulations and other FDA regulatory requirements. If our present or future suppliers are not able to comply with these
requirements, the FDA may halt our clinical trials, require us to recall a product from distribution, or withdraw approval of the NDA
or BLA.

The FDA closely regulates the marketing and promotion of drugs. A company can make only those claims relating to safety and
efficacy, purity and potency that are approved by the FDA. Failure to comply with these requirements can result in adverse publicity,
warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products
for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-
label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many
patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does,
however, restrict manufacturer’s communications on the subject of off-label use.

Healthcare and reimbursement regulation

Our sales, promotion, medical education and other activities following product approval will be subject to regulation by numerous
regulatory and law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade
Commission, the Department of Justice, the Centers for Medicare and Medicaid Services, other divisions of the Department of Health
and Human Services and state and local governments. Our promotional and scientific/educational programs must comply with the
anti-kickback provisions of the Social Security Act, the Foreign Corrupt Practices Act, the False Claims Act, the Veterans Health Care
Act and similar state laws.

Depending on the circumstances, failure to meet these applicable regulatory requirements can result in criminal prosecution, fines or
other penalties, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-
marketing product approvals, private “qui tam” actions brought by individual whistleblowers in the name of the government or refusal
to allow us to enter into supply contracts, including government contracts.

Sales of pharmaceutical products depend significantly on the availability of third-party reimbursement. Third-party payors include
government health administrative authorities, managed care providers, private health insurers and other organizations. We anticipate
third-party payors will provide reimbursement for our products. However, these third-party payors are increasingly challenging the
price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to the
reimbursement status of newly approved healthcare products. We may need to conduct expensive pharmacological studies to
demonstrate the cost-effectiveness of our products. The product candidates that we develop may not be considered cost-effective. It is
time consuming and expensive for us to seek reimbursement from third-party payors. Reimbursement may not be available or
sufficient to allow us to sell our products on a competitive and profitable basis.

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to
change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payors in
the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of
containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a
particular focus of these efforts and has been significantly affected by major legislative initiatives.

Foreign regulation

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and
commercial sales and distribution of our products to the extent we choose to develop or sell any products outside of the United States.
The approval process varies from country to country and the time may be longer or shorter than that required to obtain FDA approval.
The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to
country.

EU member states require both regulatory clearances by the national competent authority and a favorable ethics committee opinion
prior to the commencement of a clinical trial. Under the EU regulatory systems, we may submit marketing authorization applications
either under a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing
authorization that is valid for all EU member states. The centralized procedure is compulsory for medicines produced by certain
biotechnological processes, products with a new active substance indicated for the treatment of certain diseases, such as
neurodegenerative disorder or diabetes and products designated as orphan medicinal products and optional for those products which
are highly innovative or for which a centralized process is in the interest of patients. The decentralized procedure of approval provides
for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state,
known as the reference member state. Under the decentralized approval procedure, an applicant submits an application, or dossier, and
related materials (draft summary of product characteristics, draft labeling and package leaflet) to the reference member state and
concerned member states. The reference member state prepares a draft assessment and drafts of the related materials within 120 days
after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report, each concerned
member state must decide whether to approve the assessment report and related materials. If a member state cannot approve the
assessment report and related materials on the grounds of potential serious risk to public health, the disputed points may eventually be
referred to the European Commission, whose decision is binding on all member states.

Employees

As of December 31, 2014, we had 99 full-time employees, 13 of whom hold Ph.D. degrees and 4 of whom hold M.D. degrees. Of the
full-time employees, 65 employees are engaged in research and development and 34 are engaged in general administration, business
development and marketing. Our employees are not represented by labor unions or covered by collective bargaining agreements. We
consider our relationship with our employees to be good.

Facilities

We lease approximately 60,000 square feet of research and office space in South San Francisco, California under a lease that expires
in March 2020. Thereafter, at our option, we may extend the term for an additional three years through March 2023. We believe that
our existing facilities are sufficient for our current needs for the foreseeable future.

Legal proceedings

We are not currently a party to any material legal proceedings.

Corporate and Available Information

Our principal corporate offices are located at 270 E. Grand Avenue, South San Francisco, California 94080 and our telephone number
is (650) 246-7000. We were incorporated in Delaware in September 2003. Our internet address is www.portola.com. We make
available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and
Exchange Commission, or the SEC. Our SEC reports can be accessed through the Investors section of our internet website. Further, a
copy of this Annual Report on Form 10-K is located at the SEC’s Public Reference Rooms at 100 F Street, N.E., Washington, D. C.
20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC
maintains a website that contains reports, proxy and information statements and other information regarding our filings at
http://www.sec.gov. The information found on our internet website is not incorporated by reference into this Annual Report on
Form 10-K or any other report we file with or furnish to the SEC.

Item 1A. RISK FACTORS.

Investing in our common stock involves a high degree of risk. You should consider carefully the following risks, together with all the
other information in this Annual Report on Form 10-K, including our financial statements and notes thereto, before you invest in our
common stock. If any of the following risks actually materializes, our operating results, financial condition and liquidity could be
materially adversely affected. As a result, the trading price of our common stock could decline and you could lose part or all of your
investment.

RISKS RELATED TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL CAPITAL

Although we reported net income for the year ended December 31, 2012, we have incurred significant losses since 2012, and
expect to incur substantial and increasing losses for the foreseeable future.

We are a clinical-stage biopharmaceutical company. We do not currently have any products approved for sale, and we continue to
incur significant research and development and general and administrative expenses related to our operations. Although we reported
net income for the year ended December 31, 2012, this was primarily due to the recognition of all remaining deferred revenue
following the termination of a collaboration agreement. We expect to incur substantial and increasing losses for the foreseeable future.
As of December 31, 2014, we had an accumulated deficit of approximately $422.8 million.

To date, we have financed our operations primarily through sales of our equity securities, collaborations, and to a lesser extent,
government grants, equipment leases, venture debt and with the benefit of tax credits made available under a federal stimulus program
supporting drug development. We have devoted substantially all of our efforts to research and development, including clinical studies,
but have not completed development of any product candidates. We anticipate that we will continue to incur substantial expenses as
we:

•

initiate or continue clinical studies of our three most advanced product candidates;

continue the research and development of our product candidates;

seek to discover or in-license additional product candidates;

seek regulatory approvals for our product candidates that successfully complete clinical studies;

establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize
products for which we may obtain regulatory approval, including process improvements in order to manufacture
Andexanet alfa at commercial scale; and

enhance operational, compliance, financial and information management systems and hire more personnel, including
personnel to support development of our product candidates and support our commercialization efforts.

To be profitable in the future, we must succeed in developing and commercializing products with significant market potential. This
will require us to be successful in a range of activities, including advancing our product candidates, completing clinical studies of our
product candidates, obtaining regulatory approval for these product candidates and manufacturing, marketing and selling those
products for which we may obtain regulatory approval. We are only in the preliminary stages of some of these activities. We may not
succeed in these activities and may never generate revenue that is sufficient to be profitable in the future. Even if we are profitable, we
may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to achieve sustained profitability would
depress the value of our company and could impair our ability to raise capital, expand our business, diversify our product candidates,
market our product candidates, if approved, or continue our operations.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our
operating results to fall below expectations or our guidance.

Our quarterly and annual operating results may fluctuate significantly in the future, which makes it difficult for us to predict our future
operating results. From time to time, we enter into collaboration agreements with other companies that include development funding
and significant upfront and milestone payments, and we expect that amounts earned from our collaboration agreements will continue
to be an important source of our revenue. Accordingly, our revenue will depend on development funding and the achievement of
development and clinical milestones under our existing collaboration arrangements, as well as any potential future collaboration and
license agreements and sales of our products, if approved. These upfront and milestone payments may vary significantly from period
to period and any such variance could cause a significant fluctuation in our operating results from one period to the next. Furthermore,
our operating results may fluctuate due to a variety of other factors, many of which are outside of our control and may be difficult to
predict, including the following:

•

the timing and cost of, and level of investment in, research and development activities relating to our product candidates,
which may change from time to time;

the cost of manufacturing our product candidates, which may vary depending on United States Food and Drug
Administration, or FDA, guidelines and requirements, the quantity of production, technical challenges and the terms of
our agreements with manufacturers;

expenditures that we will or may incur to acquire or develop additional product candidates and technologies;

the level of demand for our product candidates, should they receive approval, which may vary significantly;

future accounting pronouncements or changes in our accounting policies;

the timing and success or failure of clinical studies for our product candidates or competing product candidates, or any
other change in the competitive landscape of our industry, including consolidation among our competitors or partners;

the risk/benefit profile, cost and reimbursement policies with respect to our products candidates, if approved, and existing
and potential future drugs that compete with our product candidates; and

the changing and volatile global economic environment.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating
results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on
our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet
the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the
expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market
are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price
decline could occur even when we have met any previously publicly stated revenue or earnings guidance we may provide.

We will need additional funds to support our operations, and such funding may not be available to us on acceptable terms, or at all,
which would force us to delay, reduce or suspend our research and development programs and other operations or
commercialization efforts. Raising additional capital may subject us to unfavorable terms, cause dilution to our existing
stockholders, restrict our operations or require us to relinquish rights to our product candidates and technologies.

We are advancing multiple product candidates through the research and clinical development process. The completion of the
development and the potential commercialization of our product candidates, should they receive approval, will require substantial
funds. As of December 31, 2014, we had $392.3 million in cash, cash equivalents and investments. We believe that our available cash,
cash equivalents and investments will be sufficient to fund our anticipated level of operations for at least the next 12 months. Our
future financing requirements will depend on many factors, some of which are beyond our control, including the following:

•

the rate of progress and cost of our clinical studies;

the timing of, and costs involved in, seeking and obtaining approvals from the FDA and other regulatory authorities;

the costs of commercialization activities if any of our product candidates is approved, including product sales, marketing,
manufacturing and distribution;

the degree and rate of market acceptance of any products launched by us or future partners;

our ability to enter into additional collaboration, licensing, commercialization or other financing arrangements and the
terms and timing of such arrangements; and

the emergence of competing technologies or other adverse market developments.

Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to
finance future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic
alliances, licensing arrangements and other financing, marketing and distribution arrangements. Additional financing may not be
available to us when we need it or it may not be available on favorable terms.

If we raise additional capital through financing, marketing and distribution arrangements or other collaborations, strategic alliances or
licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies,
future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital
through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these
securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital
through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring
additional debt, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed, we
may have to delay, reduce the scope of, or suspend one or more of our clinical studies, research and development programs or
commercialization efforts.

RISKS RELATED TO THE DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCT CANDIDATES

Our success depends heavily on the approval and successful commercialization of our lead product candidates, Betrixaban and
Andexanet alfa along with Cerdulatinib and our selective Syk inhibitor program. Clinical studies of these product candidates may
not be successful. If we are unable to commercialize one or more of our product candidates, or experience significant delays in
doing so, our business will be materially harmed.

We have invested a significant portion of our efforts and financial resources into the development of Betrixaban, Andexanet alfa, and,
to a lesser extent, Cerdulatinib and our selective Syk inhibitor program. Our ability to generate product revenue, which will not occur
until after regulatory approval, if ever, will depend on the successful development, regulatory approval and eventual
commercialization of one of our product candidates. The success of our product candidates will depend on several factors, including
the following:

•

successful enrollment in, and completion of, clinical studies;

our ability to reach agreement with the FDA and other regulatory authorities on the appropriate regulatory path for
approval of our product candidates;

receipt of marketing approvals from the FDA and similar regulatory authorities outside the United States for our product
candidates;

•

establishing commercial manufacturing arrangements with third parties;

ability to manufacture product commercially at acceptable costs;

commercializing any product candidate that may be approved, whether alone or in collaboration with others;

acceptance of any approved product by the medical community, third-party payors and patients;

effectively competing with other therapies;

a continued acceptable safety profile of the product following approval; and

obtaining, maintaining, enforcing and defending intellectual property rights and claims.

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to
successfully commercialize our product candidates, which would materially harm our business.

If clinical studies of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA or similar
regulatory authorities outside the United States or do not otherwise produce positive results, we may incur additional costs or
experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product
candidates.

Before obtaining regulatory approval for the sale of our product candidates, we must conduct extensive clinical studies to demonstrate
the safety and efficacy of our product candidates in humans. Clinical studies are expensive, difficult to design and implement, can take
many years to complete and are uncertain as to outcome. A failure of one or more of our clinical studies could occur at any stage of
testing. The outcome of preclinical testing and early clinical studies may not be predictive of the success of later clinical studies, and
interim results of a clinical study do not necessarily predict final results.

For example, the favorable results from our Phase 2 clinical studies of Betrixaban, which involved the prophylaxis, or preventive
treatment, against venous thromboembolism, or VTE, in patients receiving total knee replacements and the prevention of stroke in
patients with atrial fibrillation, may not be predictive of success in our current Phase 3 APEX clinical study of Betrixaban for extended
duration VTE prophylaxis for 35 days of in-hospital and post-discharge use in acute medically ill patients with elevated blood levels
of D-dimer or over the age of 75, as the Phase 2 studies were not designed to demonstrate statistically significant effectiveness, were
in different medical conditions, involved different patient populations or dosing regimens, were of different duration or had different
comparators. Any of these factors and other factors could result in Betrixaban showing decreased activity or increased safety risks in
our APEX study as compared to the Phase 2 studies.

Moreover, the probability of our APEX study succeeding is highly dependent on the adequacy of its design. Two other Factor Xa
inhibitors have failed in Phase 3 trials for the indication that we are pursuing for Betrixaban. We have reviewed publicly available data
from those studies and incorporated the results of our analysis into the design of our APEX study, but we could have misinterpreted
the data or performed a flawed analysis. Furthermore, relevant information from the studies may not be publicly available or, if
available, may not have been obtained by us. As a result, there could be flaws in the design of our APEX study that could cause it to
fail. For example, our patient inclusion criteria for the APEX study selects for patients with a higher risk of VTE, and these patients
may be more likely to experience a severe bleeding event, even though we attempt to exclude certain patients at higher risk of
bleeding. If patients in the APEX study experience a higher than expected rate of severe bleeding events, the APEX study may fail to
demonstrate a sufficient safety profile for Betrixaban. In addition, preclinical and clinical data are often susceptible to varying
interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical
studies and clinical trials have nonetheless failed to obtain regulatory approval for the marketing of their products.

Similarly, the favorable results from our Phase 2 proof-of concept studies of Andexanet alfa, evaluating the effect of Andexanet alfa in
healthy volunteers taking apixaban, rivaroxaban, edoxaban or enoxaparin, may not be predictive of success in our other Phase 3 or
other later studies. In addition, our recent announcements that parts 1 of our Phase 3 ANNEXA-A (apixaban) and ANNEXA-R
(rivaroxaban) studies demonstrated that, for the primary efficacy endpoint, an intravenous bolus of Andexanet alfa immediately and
significantly reversed the anticoagulation activity of apixaban and rivaroxaban, may not be predictive of success in other ANNEXA
studies with other Factor Xa inhibitors or in parts 2 of our ANNEXA-A and ANNEXA-R studies which include a bolus plus
continuous infusion of Andexanet alfa. We also do not yet know how the results from our clinical studies of Andexanet alfa in healthy
volunteers who have received a Factor Xa inhibitor followed by Andexanet alfa will translate into clinical outcomes in patients.
Moreover, the results from our studies to date of Andexanet alfa may not address the effect of repeat doses or allow a determination of
the optimal therapeutic dose of Andexanet alfa for our intended target patient population.

We may experience numerous unforeseen events during, or as a result of, clinical studies that could delay or prevent our ability to
receive regulatory approval or commercialize our product candidates, including the following:

•

clinical studies of our product candidates may produce negative or inconclusive results, and we may decide, or regulators
may require us, to conduct additional clinical studies or abandon product development programs;

the number of patients required for clinical studies of our product candidates may be larger than we anticipate, enrollment
in these clinical studies may be insufficient or slower than we anticipate or patients may drop out of these clinical studies
at a higher rate than we anticipate;

the cost of clinical studies or the manufacturing of our product candidates may be greater than we anticipate;

our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a
timely manner, or at all;

we might have to suspend or terminate clinical studies of our product candidates for various reasons, including
unanticipated serious side effects, other unexpected characteristics or unacceptable health risks;

regulators may not approve our proposed clinical development plans;

regulators or institutional review boards may not authorize us or our investigators to commence a clinical study or conduct
a clinical study at a prospective study site;

regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for
various reasons, including noncompliance with regulatory requirements; and

the supply or quality of our product candidates or other materials necessary to conduct clinical studies of our product
candidates may be insufficient or inadequate.

If we are required to conduct additional clinical studies or other testing of our product candidates beyond those that we currently
contemplate, if we are unable to successfully complete clinical studies of our product candidates or other testing, if the results of these
studies or tests are not positive or are only modestly positive or if there are safety concerns, we may:

•

be delayed in obtaining marketing approval for our product candidates;

not obtain marketing approval at all;

obtain approval for indications that are not as broad as intended;

have the product removed from the market after obtaining marketing approval;

be subject to additional post-marketing testing requirements; or

be subject to restrictions on how the product is distributed or used.

Our product development costs will also increase if we experience delays in testing or approvals. We do not know whether any
clinical studies will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical study
delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow
our competitors to bring products to market before we do, which would impair our ability to commercialize our product candidates
and harm our business and results of operations.

If serious adverse side effects are identified during the development of any of our product candidates, we may need to abandon our
development of that product candidate.

None of our product candidates has completed clinical development. The risk of failure of clinical development is high. It is
impossible to predict when or if any of our product candidates will prove safe enough to receive regulatory approval. For example, our
product candidate Betrixaban, like all currently marketed inhibitors of Factor Xa, carries some risk of life-threatening bleeding. In
addition, patients taking Betrixaban in our Phase 2 studies had an increased rate of gastrointestinal issues, such as diarrhea, nausea and
vomiting, and other side effects such as back pain, dizziness, headaches, rashes and insomnia as compared to subjects taking a placebo
or an active comparator. There can be no assurance that our APEX study or other clinical studies will not fail due to safety issues. In
such an event, we might need to abandon development of that product candidate or enter into a partnership to continue development.

The failure of two of our competitors’ clinical trials evaluating Factor Xa inhibitors for VTE prophylaxis in acute medically ill
patients may suggest an increased risk that our APEX trial for Betrixaban will also fail.

Two of our competitors’ clinical trials evaluating Factor Xa inhibitors for VTE prophylaxis in acute medically ill patients have failed.
The MAGELLAN trial sponsored by Bayer Pharma AG, or Bayer, and Janssen Pharmaceuticals, Inc., or Janssen, which evaluated
rivaroxaban, demonstrated efficacy but failed to demonstrate an acceptable benefit to risk profile due to increased bleeding. The
ADOPT trial sponsored by Bristol-Myers Squibb Company, which evaluated apixaban, showed a reduction in VTE events, but failed
to demonstrate statistically significant efficacy and also showed an increase in bleeding. Betrixaban, like rivaroxaban and apixaban,
may fail in clinical trials if it does not show a statistically significant level of efficacy or if the resulting bleeding risk is too high
compared to its benefits.

Delays in the enrollment of patients in any of our clinical studies could increase our development costs and delay completion of
our clinical studies and associated regulatory submissions.

We may not be able to initiate or continue clinical studies for our product candidates if we are unable to locate and enroll a sufficient
number of eligible patients to participate in these studies as required by the FDA or other regulatory authorities. Even if we are able to
enroll a sufficient number of patients in our clinical studies, if the pace of enrollment is slower than we expect, the development costs
for our product candidates may increase, and the completion of our studies may be delayed or our studies could become too expensive
to complete.

For example, our Phase 3 Betrixaban APEX study is expected to enroll approximately 6,850 patients from over 500 study sites
throughout the world. We have never previously conducted a study of this magnitude and can provide no assurance that we will be
able to enroll patients to complete the study within our projected time frame. The first patient was enrolled in APEX in March 2012,
and, based on current enrollment, we expect patient enrollment to be completed by the end of 2015, later than we initially estimated.
Completing the study by that date will require us to continue to enroll patients at established rates. If we experience delays in
enrollment, our ability to complete our APEX study could be materially adversely affected. If we are unable to continue to enroll the
patients at the established rate, the completion of the study could be delayed and the costs of conducting the study could increase,
either of which could have a material adverse effect on our business.

As another example, the ANNEXA-4 study of Andexanet alfa is our first experience in patients with major bleeding who are receiving
a factor Xa inhibitor. Because we have no first-hand enrollment experience in this patient population, our enrollment forecasts are
estimated based on our understanding of enrollment experience of similar studies conducted by others in similar patient populations.
Our current forecasts suggest that enrolling up to 270 patients should ensure that a sufficient number are able to be included in the
primary analysis. However, if after enrolling 270 patients, the true number of evaluable patients is less than required, it may be
necessary to continue enrolling additional patients beyond the planned 270. Enrollment of additional patients (or slower than
anticipated enrollment of the currently planned 270 patients) could increase the cost and duration of the study, and could result in
alterations of the clinical plan including, but not limited to, opening of additional sites or geographic regions, both of which would
result in increased costs. In addition, our current enrollment forecasts indicate that enrollment of enough patients to satisfy requests
from regulators will occur in time to support an Andexanet alfa BLA submission in 2015. However, if the actual enrollment rate
differs from our predicted rate, we may not meet these enrollment targets which could delay the BLA submission.

Even if Andexanet alfa is approved by the FDA, this approval may be limited to certain indications, additional clinical studies and
regulatory applications may be required to expand Andexanet alfa indications and we can provide no assurances that such
additional clinical studies or regulatory applications will be successful.

We are developing Andexanet alfa as a universal antidote for patients receiving a Factor Xa inhibitor anticoagulant who suffer a major
bleeding episode or who may require emergency surgery. Our ANNEXA-4 Phase 4 study is being conducted in patients receiving
either a direct or indirect Factor Xa inhibitor who present with an acute major bleed, and our ANNEXA Phase 3 registration-enabling
studies have been conducted on healthy volunteers. It is not certain at this time which indications, if any, the FDA will approve based
on this data. It is possible that additional clinical studies will required to support our targeted indications, which would require
additional time and expense and may not prove successful. Limitations in our label for Andexanet alfa would reduce the number of
patients for whom Andexanet alfa is indicated and could reduce the size of the anticipated market and our financial prospects.

Even if our APEX study demonstrates statistically significant efficacy and safety of Betrixaban for extended duration VTE
prophylaxis in acute medically ill patients for 35 days of in-hospital and post-discharge use, the FDA or similar regulatory
authorities outside the United States may not approve Betrixaban for marketing or may approve it with restrictions on the label,
which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Assuming the success of our APEX study, we anticipate seeking regulatory approval for Betrixaban in the United States for extended
duration VTE prophylaxis in acute medically ill patients for 35 days of in-hospital and post-discharge use. It is possible that the FDA
may not consider the results of our APEX study to be sufficient for approval of Betrixaban for this indication. In general, the FDA
suggests that sponsors complete two adequate and well-controlled clinical studies to demonstrate effectiveness because a conclusion
based on two persuasive studies will be more compelling than a conclusion based on a single study. Although the FDA has informed
us that our APEX study, plus supportive Phase 2 data obtained to date, could potentially provide sufficient safety and efficacy data for
extended duration VTE prophylaxis in acute medically ill patients for 35 days of in-hospital and post-discharge use, the FDA has
further advised us that whether one or two adequate and well-controlled clinical studies are required will be a review issue in
connection with a new drug application, or NDA, submission. Even if we achieve favorable results in our APEX study, the FDA may
nonetheless require that we conduct additional clinical studies, possibly using a different clinical study design.

Even if the FDA or other regulatory authorities approve Betrixaban for VTE prophylaxis in acute medically ill patients, the approval
may include additional restrictions on the label that could make Betrixaban less attractive to physicians and patients than other
products that may be approved for broader indications, which could reduce the potential market for Betrixaban.

We are seeking regulatory approval of Andexanet alfa in the United States through an Accelerated Approval process, and since we
have limited experience with this process, the development or commercialization of Andexanet alfa could be delayed or abandoned.

In November 2013, the FDA granted breakthrough therapy designation for Andexanet alfa which allows for an Accelerated Approval
process. In addition, we have reached agreement with the FDA on an Accelerated Approval strategy. The Accelerated Approval
regulations allow drugs that are being developed to treat an unmet medical need to be approved substantially based on evidence of an
effect on a surrogate biomarker endpoint that is considered reasonably likely to predict clinical benefit rather than a clinical endpoint
such as survival or irreversible morbidity. Use of an Accelerated Approval process provides a shortened timetable to approval, but a
Phase 4 clinical study with clinical endpoints that will confirm the validity of the surrogate endpoint(s) must be ongoing at the time
our BLA is submitted and some early patient data will be required by the FDA to support the BLA. We expect that this study will
continue into commercialization. Because of the accelerated timelines required for accelerated approval, we may require more time
and incur greater costs than anticipated and may not succeed in timely manufacture of drug supply or in obtaining regulatory approval
of Andexanet alfa. In addition, the FDA may subsequently determine that the studies conducted by us were insufficient to support
approval or require us to conduct extensive post-approval studies.

Even if our product candidates receive regulatory approval, they may fail to achieve the degree of market acceptance by physicians,
patients, healthcare payors and others in the medical community necessary for commercial success.

If any of our product candidates receive regulatory approval, they may nonetheless fail to gain sufficient market acceptance by
physicians, hospital administrators, patients, healthcare payors and others in the medical community. The degree of market acceptance
of our product candidates, if approved for commercial sale, will depend on a number of factors, including the following:

•

the prevalence and severity of any side effects;

efficacy and potential advantages compared to alternative treatments;

the price we charge for our product candidates;

•

the willingness of physicians to change their current treatment practices;

the willingness of hospitals and hospital systems to include our product candidates as treatment options;

convenience and ease of administration compared to alternative treatments;

the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

the strength of marketing and distribution support; and

the availability of third-party coverage or reimbursement.

For example, while there are no approved therapies for VTE prophylaxis in acute medically ill patients approved for use beyond the
typical hospitalization period, there are therapies available for in-hospital use and physicians may not be willing to change their
current in-hospital treatment practices in favor of Betrixaban. If our product candidates, if approved, do not achieve an adequate level
of acceptance, we may not generate significant product revenue and we may not become profitable on a sustained basis.

There are risks associated with scaling up manufacturing to commercial scale. Our commercial manufacturing strategy for
Andexanet alfa is particularly complex and challenging. If our manufacturers are unable to manufacture our products on a
commercial scale or scale to increased production, this could potentially delay regulatory approval and commercialization or
materially adversely affect our results of operations.

There are risks associated with scaling up manufacturing to commercial volumes including, among others, cost overruns, technical
problems with process scale-up, process reproducibility, stability issues, lot consistency and timely availability of raw materials. Even
if we could otherwise obtain regulatory approval for any product candidate, there is no assurance that our manufacturer will be able to
manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient
quantities to meet the requirements for the potential launch of the product or to meet potential future demand. If our manufacturers are
unable to produce sufficient quantities of the approved product for commercialization, either on a timely basis or at all, our
commercialization efforts would be impaired, which would have a material adverse effect on our business, financial condition, results
of operations and growth prospects.

In particular, we face uncertainties and risks associated with scaling up the manufacturing for Andexanet alfa. Andexanet alfa is a
recombinant biological molecule, or biologic, rather than a small molecule chemical compound like our other product candidates. The
manufacture of biologics involves complex processes, typically including developing cell lines or cell systems to produce the biologic,
growing large quantities of such cells and harvesting and purifying the biologic produced by them. The cost to manufacture biologics
is generally far higher than traditional small molecule chemical compounds, and the manufacturing process is more complex and can
be difficult to reproduce. There is no guarantee we will be successful in establishing a larger-scale commercial manufacturing process
for Andexanet alfa which achieves our objectives for manufacturing capacity and cost of goods. Due, in part, to the high cost to
manufacture Andexanet alfa and the inherent uncertainty related to manufacturing costs, if the effective dose of Andexanet alfa is
higher than we anticipate or the obtainable sales price is lower than we anticipate, there is a greater risk that Andexanet alfa may not
be commercially viable.

Andexanet alfa used in our clinical studies is currently produced for us by a third-party contract manufacturer, CMC ICOS Biologics,
Inc., or CMC Biologics, who will also support our initial BLA submission and initial commercial launch in the U.S. However, to
support broader U.S. and worldwide supply with a lower cost, we must also increase production capacity at CMC Biologics, add
production from Lonza or another larger-scale manufacturer, and improve the manufacturing process to increase the yield and lower
the manufacturing costs. Developing a commercial manufacturing process with two separate commercial manufacturing organizations
increases the cost and complexity of commercial manufacturing which could increase the risk of successful implementation of our
commercial manufacturing supply strategy.

We do not anticipate that supply from CMC Biologics, even as expanded, will be sufficient to meet projected worldwide demand for
Andexanet alfa, therefore, we must also develop an improved and more cost-effective process at Lonza. However, the first commercial
material from Lonza will not become available until after our expected U.S. launch. There is significant technical and regulatory work
which we will need to complete before Lonza is able to produce commercial quantities of Andexanet alfa and there remains
substantial uncertainty whether Lonza will be able to produce commercial supply of Andexanet alfa at the quantities and cost of goods
necessary for commercial success. Previous scale-up work was unsuccessful in achieving acceptable product yield within the desired
timeline.

In addition, in order to obtain FDA approval of material produced by a new vendor or using a new process, we will need to
demonstrate that such material is comparable to the clinical material we previously used and material produced by CMC Biologics.
Demonstrating comparability can require significant pre-clinical and clinical studies. If we are not able to demonstrate comparability,
then the material may be considered a new biological entity and a new clinical program, possibly commencing with Phase 1, and
requiring a full BLA submission may be required for approval, resulting in additional time and expense. If we are not able to establish
targeted capacity at CMC Biologics and Lonza on a timely basis, implement the proposed transitions in a timely manner, or establish
comparability of the new material, or obtain the anticipated improvements in efficiency, our business, financial condition, results of
operations and growth prospects would be materially adversely affected.

We currently have no sales or distribution personnel and only limited marketing capabilities. If we are unable to develop a sales
and marketing and distribution capability on our own or through collaborations or other marketing partners, we will not be
successful in commercializing Betrixaban, Andexanet alfa or other future products.

We do not currently have a significant sales or marketing infrastructure and have never sold, marketed or distributed therapeutic
products. To achieve commercial success for any approved product, we must either develop a sales and marketing organization or
outsource these functions to third parties. We plan to establish a hospital-based sales force in the United States and possibly other
major markets and work with partners in other parts of the world to commercialize both Betrixaban and Andexanet alfa globally, if
they are approved. There are risks involved with both establishing our own sales and marketing capabilities and entering into
arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time-
consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and
establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred
these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales
and marketing personnel.

We also may not be successful entering into arrangements with third parties to sell and market our product candidates or may be
unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to
devote the necessary resources and attention to sell and market our products effectively, which could damage our reputation. If we do
not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will not be
successful in commercializing our product candidates.

We face substantial competition, which may result in others discovering, developing or commercializing competing products before
or more successfully than we do.

The development and commercialization of new therapeutic products is highly competitive. We face competition with respect to our
current product candidates, and will face competition with respect to any products that we may seek to develop or commercialize in
the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. For
example, several large pharmaceutical and biotechnology companies currently market and sell direct or indirect Factor Xa inhibitors
for use in various disease states, including injectable Factor Xa inhibitors for the prevention of VTE in acute medically ill patients.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that
conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and
commercialization. Many of these competitors are attempting to develop therapeutics for our target indications.

In addition, many of our competitors are large pharmaceutical companies that will have a greater ability to reduce prices for their
competing drugs in an effort to gain market share and undermine the value proposition that we might otherwise be able to offer to
payors. We are developing our product candidate Betrixaban for extended duration VTE prophylaxis in acute medically ill patients for
35 days of in-hospital and post-discharge use. The current standard of care for VTE prophylaxis in acute medically ill patients in the
United States is a 6- to 14-day hospital administration of enoxaparin, marketed as Lovenox® and also available in generic form, an
indirect Factor Xa inhibitor. Enoxaparin is widely accepted by physicians, patients and third-party payors. As a result, we may face
difficulties in marketing Betrixaban as a substitute therapy in the hospital for the current standard of care, enoxaparin.

Furthermore, the FDA has already approved a number of therapies that, like Betrixaban, are oral direct Factor Xa inhibitors and that
have already achieved substantial market acceptance. Although these products have not been approved for VTE prophylaxis in acute
medically ill patients, the owners of the products may decide to seek such approval or physicians may decide to prescribe these
products for the treatment of VTE in acute medically ill patients absent such approval, known as prescribing “off-label.” Further, our
competitors may have the financial and other resources to conduct additional clinical studies in an effort to obtain regulatory approval
for use of their drugs for VTE prophylaxis in acute medically ill patients, even in cases where they have previously run clinical trials
that have failed. For example, in March 2014, Bayer and Janssen announced the initiation of a new Phase 3 clinical trial to evaluate
the safety and efficacy of rivaroxaban to reduce the risk of post-hospital discharge symptomatic VTE in patients hospitalized for acute
medical illness.

While there are no therapies approved specifically as antidotes for Factor Xa inhibitors, we are aware of at least one drug candidate
being studied in early stage clinical trials as a potential antidote to Factor Xa inhibitors. In addition, in December 2014, Bristol-Myers
Squibb Company and Pfizer Inc. announced that a clinical trial of 15 healthy human subjects demonstrated that 4-factor prothrombin
complex concentrates reversed the steady-state pharmacodynamics effects of Eliquis (apixaban). Andexanet alfa, if approved, may
compete with other currently approved treatments designed to enhance coagulation, such as fresh frozen plasma, prothrombin complex
concentrates, recombinant Factor VIIa or whole blood. Although there is no clinical evidence supporting the use of such treatments in
patients taking Factor Xa inhibitors, physicians may choose to use them because of familiarity, cost or other reasons. In addition, we
are aware that several companies have conducted preclinical research on compounds intended to be antidotes for Factor Xa inhibitors.

There are also a number of products in clinical development for hematologic cancer, ophthalmological diseases, allergic rhinitis,
allergic asthma and other inflammatory diseases that are potential indications for Cerdulatinib or selective Syk inhibitors. Our
competitors may develop products that are more effective, safer, more convenient or less costly than any that we are developing or
that would render our product candidates obsolete or noncompetitive. Many competing products are in later stages of development
than our products and are, therefore, likely to obtain FDA or other regulatory approval for their products before we obtain approval for
ours. Many of our competitors, including a number of large pharmaceutical companies that compete directly with us, have
significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting
clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the
pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller
number of our competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through
collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining
qualified scientific and management personnel, establishing clinical study sites and patient registration for clinical studies, as well as
in acquiring technologies complementary to, or necessary for, our programs.

RISKS RELATED TO OUR RELIANCE ON THIRD PARTIES

We rely on third parties to conduct our clinical studies, and those third parties may not perform satisfactorily, including failing to
meet deadlines for the completion of such studies.

We do not independently conduct clinical studies of our product candidates. We rely on third parties, such as contract research
organizations, or CROs, clinical data management organizations, medical institutions and clinical investigators, to perform this
function. For example, we rely on PPD Development, LP and other CROs to oversee and manage our APEX study. Our reliance on
these third parties for clinical development activities reduces our control over these activities but does not relieve us of our
responsibilities. Furthermore, most of the clinical study sites for our APEX study are outside the United States, including several
developing countries. The performance of these sites may be adversely affected by various issues, including less advanced medical
infrastructure, lack of familiarity with conducting clinical studies using U.S. standards, insufficient training of personnel,
communication difficulties and geopolitical risk. We remain responsible for ensuring that each of our clinical studies is conducted in
accordance with the general investigational plan and protocols for the study.

Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, for conducting, recording
and reporting the results of clinical studies to assure that data and reported results are credible and accurate and that the rights,
integrity and confidentiality of patients in clinical studies are protected. Furthermore, these third parties may also have relationships
with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties,
meet expected deadlines or conduct our clinical studies in accordance with regulatory requirements or our stated protocols, we will not
be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and will not be able to, or may be
delayed in our efforts to, successfully commercialize our product candidates.

We also rely on other third parties to store and distribute supplies for our clinical studies. Any performance failure on the part of our
existing or future distributors could delay clinical development or regulatory approval of our product candidates or commercialization
of our products, producing additional losses and depriving us of potential product revenue.

We rely on third-party contract manufacturing organizations to manufacture and supply our product candidates for us. If one of
our suppliers or manufacturers fails to perform adequately or fulfill our needs, we may be required to incur significant costs and
devote significant efforts to find new suppliers or manufacturers. We may also face significant delays in the development and
commercialization of our product candidates.

We do not own facilities for, clinical-scale or commercial manufacturing of our product candidates. We currently rely critically on
individual suppliers for each of our product candidates. For example, we rely on Hovione Inter Limited to produce the active
pharmaceutical ingredient for Betrixaban for our APEX study, we have contracted with CMC Biologics to expand its production
capacity of Andexanet alfa bulk drug substance to support our potential U.S. commercial launch, and we have engaged Lonza to
develop a new, higher-capacity and lower cost process for Andexanet alfa bulk drug substance in order to support our broader,
worldwide commercialization strategy. We have not yet entered into a commercial supply agreement for the manufacture of
Betrixaban. We also rely or expect to rely on other third party providers for lyophilization, packaging, labeling and supply chain
distribution. If we and our suppliers cannot agree to the terms and conditions for them to provide the drug product necessary for our
clinical and commercial supply needs, or if any single source supplier terminates the agreement in response to a breach by us or
otherwise becomes unable to fulfill its supply obligations, we would not be able to manufacture and distribute the product candidate
until a qualified alternative supplier is identified, which could also significantly delay the development of, and impair our ability to
commercialize, our product candidates.

The manufacture of pharmaceutical products in compliance with the FDA’s current good manufacturing practices, or cGMPs, requires
significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.
Manufacturers of pharmaceutical products often encounter difficulties in production, including difficulties with production costs and
yields, quality control, including stability of the product candidate and quality assurance testing, shortages of qualified personnel, as
well as compliance with strictly enforced cGMP requirements, other federal and state regulatory requirements and foreign regulations.
If our manufacturers were to encounter any of these difficulties or otherwise fail to comply with their obligations to us or under
applicable regulations, our ability to supply our clinical studies or commercial demand would be jeopardized. Any delay or
interruption in the supply of clinical study materials could delay the completion of our clinical studies, increase the costs associated
with maintaining our clinical study programs and, depending upon the period of delay, require us to commence new studies at
significant additional expense or terminate the studies completely.

All manufacturers of our product candidates must comply with cGMP requirements enforced by the FDA through its facilities
inspection program. These requirements include, among other things, quality control, quality assurance and the maintenance of
records and documentation. Manufacturers of our product candidates may be unable to comply with these cGMP requirements and
with other FDA, state and foreign regulatory requirements. The FDA or similar foreign regulatory agencies may also implement new
standards at any time, or change their interpretation and enforcement of existing standards for manufacturing, packaging or testing of
products. We have limited control over our manufacturers’ compliance with these regulations and standards. A failure to comply with
these requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product
seizure or recall or withdrawal of product approval. If the safety of any product supplied is compromised due to our manufacturers’
failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for or successfully
commercialize our products and we may be held liable for any injuries sustained as a result. Any of these factors could cause a delay
of clinical studies, regulatory submissions, approvals or commercialization of our product candidates, entail higher costs or impair our
reputation.

Although alternative sources of supply exist, the number of third-party suppliers with the necessary manufacturing and regulatory
expertise and facilities to manufacture biologics is limited, and it could be expensive and take a significant amount of time to arrange
for alternative suppliers, which could have a material adverse effect on our business. New suppliers of any product candidate would be
required to qualify under applicable regulatory requirements and would need to have sufficient rights under applicable intellectual
property laws to the method of manufacturing the product candidate. Obtaining the necessary FDA approvals or other qualifications
under applicable regulatory requirements and ensuring non-infringement of third-party intellectual property rights could result in a
significant interruption of supply and could require the new manufacturer to bear significant additional costs which may be passed on
to us.

We may enter into collaborations that place the development of our product candidates outside our control, require us to
relinquish important rights or may otherwise be on terms unfavorable to us, and if our collaborations are not successful, our
product candidates may not reach their full market potential.

We may enter into additional collaboration agreements with third parties with respect to our product candidates for the
commercialization of the candidates outside the U.S., or for other purposes. In addition, depending on our capital requirements,
development and commercialization costs, need for additional therapeutic expertise and other factors, it is possible that we will enter
into broader development and commercialization arrangements with respect to our product candidates. Our likely collaborators for any
distribution, marketing, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies,
regional and national pharmaceutical companies and biotechnology companies. We will have limited control over the amount and
timing of resources that our collaborators dedicate to the development or commercialization of our product candidates. Our ability to
generate revenue from these arrangements will depend in part on our collaborators’ abilities to successfully perform the functions
assigned to them in these arrangements.

Collaborations involving our product candidates are subject to numerous risks, which may include the following:

•

collaborators have significant discretion in determining the efforts and resources that they will apply to any such
collaborations;

collaborators may not pursue development and commercialization of our product candidates or may elect not to continue
or renew development or commercialization programs based on clinical study results, changes in their strategic focus due
to the acquisition of competitive products, availability of funding or other external factors, such as a business combination
that diverts resources or creates competing priorities;

collaborators may delay clinical studies, provide insufficient funding for a clinical study program, stop a clinical study,
abandon a product candidate, repeat or conduct new clinical studies or require a new formulation of a product candidate
for clinical testing;

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with
our products or product candidates;

a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their
marketing and distribution;

collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or
proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our
intellectual property or proprietary information or expose us to potential liability;

disputes may arise between us and a collaborator that causes the delay or termination of the research, development or
commercialization of our product candidates or that results in costly litigation or arbitration that diverts management
attention and resources;

collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further
development or commercialization of the applicable product candidates; and

collaborators may own or co-own intellectual property covering our products that results from our collaborating with them,
and in such cases, we would not have the exclusive right to commercialize such intellectual property.

Any termination or disruption of our collaboration with potential collaborators could result in delays in the development and
commercialization of our product candidates, increases in our costs to develop and commercialize the product candidate or the
termination of development of a product candidate.

RISKS RELATED TO THE OPERATION OF OUR BUSINESS

Our future success depends on our ability to retain our chief executive officer and other key executives and to attract, retain and
motivate qualified personnel.

We are highly dependent on William Lis, our Chief Executive Officer, and the other principal members of our executive and scientific
teams. Under the terms of their employment, our executives may terminate their employment with us at any time. The loss of the
services of any of these people could impede the achievement of our research, development and commercialization objectives. We
maintain “key person” insurance for Mr. Lis but not for any other executives or employees. Any insurance proceeds we may receive
under our “key person” insurance on Mr. Lis would not adequately compensate us for the loss of his services.

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our
success. We may not be able to attract and retain these personnel on acceptable terms given the competition among numerous
pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and
clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and
clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and
advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other
entities that may limit their availability to us.

We expect to expand our development, regulatory and sales and marketing capabilities, and as a result, we may encounter
difficulties in managing our growth, which could disrupt our operations.

Over the next several years, we expect to experience significant growth in the number of our employees and the scope of our
operations, particularly in the areas of drug development, regulatory affairs and sales and marketing. To manage our anticipated future
growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and
continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our
management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of
our operations or recruit and train additional qualified personnel. The physical expansion of our operations may lead to significant
costs and may divert our management and business development resources. Any inability to manage growth could delay the execution
of our business plans or disrupt our operations.

We are incurring significant increased costs as a result of operating as a public company, and our management will be required to
devote substantial time to new compliance initiatives.

As a public company, we are incurring significant legal, accounting and other expenses that we did not incur as a private company. In
addition, the Sarbanes-Oxley Act, and rules of the SEC and those of The NASDAQ Stock Market, or the NASDAQ, have imposed
various requirements on public companies including requiring establishment and maintenance of effective disclosure and financial
controls. Our management and other personnel have and will need to continue to devote a substantial amount of time to these
compliance initiatives. Moreover, these rules and regulations have increased and will continue to increase our legal and financial
compliance costs and will make some activities more time-consuming and costly.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and
disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control
over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required
by Section 404 of the Sarbanes-Oxley Act. In addition, we are required to have our independent registered public accounting firm
attest to the effectiveness of our internal control over financial reporting. Our compliance with Section 404 of the Sarbanes-Oxley Act,
as applicable, requires us to incur substantial accounting expense and expend significant management efforts. We currently do not
have an internal audit group, and we will need to continue to hire additional accounting and financial staff with appropriate public
company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404, as
applicable, in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal
control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could
be subject to sanctions or investigations by the NASDAQ, the SEC or other regulatory authorities, which would require additional
financial and management resources.

Our ability to successfully implement our business plan and comply with Section 404, as applicable, requires us to be able to prepare
timely and accurate financial statements. We expect that we will need to continue to improve existing, and implement new operational
and financial systems, procedures and controls to manage our business effectively. Any delay in the implementation of, or disruption
in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to
conclude that our internal control over financial reporting is effective and to obtain an unqualified report on internal controls from our
auditors as required under Section 404 of the Sarbanes-Oxley Act. If we fail to maintain an effective system of internal control over
financial reporting, we may not be able to accurately report our financial results, and current and potential stockholders may lose
confidence in our financial reporting. This, in turn, could have an adverse impact on trading prices for our common stock, and could
adversely affect our ability to access the capital markets.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products
that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical studies and will
face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves
against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or
eventual outcome, liability claims may result in:

•

decreased demand for any product candidates or products that we may develop;

injury to our reputation and significant negative media attention;

withdrawal of patients from clinical studies or cancellation of studies;

significant costs to defend the related litigation;

substantial monetary awards to patients;

loss of revenue; and

the inability to commercialize any products that we may develop.

We currently hold $10.0 million in product liability insurance coverage, which may not be adequate to cover all liabilities that we may
incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an
amount adequate to satisfy any liability that may arise.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product
candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus on research programs and product candidates for specific
indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or other indications that later
prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial
products or profitable market opportunities. Our spending on current and future research and development programs and product
candidates for specific indications may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish
valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have
been advantageous for us to retain sole development and commercialization rights.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or
incur costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures
and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous
and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We
generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or
injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held
liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with
civil or criminal fines and penalties.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our
employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our
storage or disposal of biological or hazardous materials. In addition, we may be required to incur substantial costs to comply with
current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our
research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines,
penalties or other sanctions.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations could be subject to earthquakes, power shortages, telecommunications failures, floods, hurricanes, typhoons, fires,
extreme weather conditions, medical epidemics and other natural or manmade disasters or business interruptions. The occurrence of
any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. Our
corporate headquarters is located in California near major earthquake faults. Our operations and financial condition could suffer in the
event of a major earthquake, fire or other natural or manmade disaster.

If we obtain approval to commercialize any approved products outside of the United States, a variety of risks associated with
international operations could materially adversely affect our business. If any product candidates that we may develop are approved
for commercialization outside the United States, we will be subject to additional risks related to entering into international business
relationships, including:

•

different regulatory requirements for drug approvals in foreign countries;

reduced protection for intellectual property rights;

unexpected changes in tariffs, trade barriers and regulatory requirements;

economic weakness, including inflation or political instability in particular foreign economies and markets;

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

foreign taxes, including withholding of payroll taxes;

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other
obligations incident to doing business in another country;

workforce uncertainty in countries where labor unrest is more common than in the United States;

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including
earthquakes, typhoons, floods and fires.

In connection with our Betrixaban and Andexanet alfa studies, we are currently utilizing certain suppliers outside of the United States,
which subjects us to certain of the above risks. For example, a significant number of our APEX trial sites and enrolled patients are in
Russia and the Ukraine, and the recent political unrest in the Ukraine has disrupted activities at five of our trial sites in this region.
Continued or worsening political unrest in this region and the effect of international sanctions could adversely affect patient
enrollment or other activities at our sites in the Ukraine and Russia.

Our internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches,
which could result in a material disruption of our drug development programs.

Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and
consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and
telecommunication and electrical failures. While we have not experienced any such system failure, accident or security breach to date,
if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug
development programs. For example, the loss of clinical study data from completed or ongoing clinical studies for any of our product
candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate
disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates
could be delayed.

RISKS RELATED TO INTELLECTUAL PROPERTY

If we fail to comply with our obligations in our intellectual property licenses with third parties, we could lose license rights that are
important to our business.

We are a party to intellectual property license agreements with third parties, including with respect to Betrixaban, Cerdulatinib and
selective Syk inhibitors, and expect to enter into additional license agreements in the future. Our existing license agreements impose,
and we expect that our future license agreements will impose, various diligence, milestone payment, royalty, insurance and other
obligations on us. If we fail to comply with these obligations, our licensors may have the right to terminate these agreements, in which
event we may not be able to develop and market any product that is covered by these agreements. Termination of these licenses or
reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable
terms or our not having sufficient intellectual property rights to operate our business. The occurrence of such events could materially
harm our business.

Our ability to successfully commercialize our technology and products may be materially adversely affected if we are unable to
obtain and maintain effective intellectual property rights for our technologies and product candidates.

Our success depends in large part on our and our licensors’ ability to obtain and maintain patent and other intellectual property
protection in the United States and in other countries with respect to our proprietary technology and products. In some circumstances,
we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering
technology or products that we license from third parties. Therefore, we cannot be certain that these patents and applications will be
prosecuted and enforced in a manner consistent with the best interests of our business. In addition, if third parties who license patents
to us fail to maintain such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated.

We have sought to protect our proprietary position by filing patent applications in the United States and abroad related to our novel
technologies and products that are important to our business. This process is expensive and time-consuming, and we may not be able
to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we
will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Our
existing patents and any future patents we obtain may not be sufficiently broad to prevent others from using our technologies or from
developing competing products and technologies. Under our collaboration agreement with Biogen Idec, we are obligated to use
commercially reasonable efforts to file and prosecute patent applications, and maintain patents, covering selective Syk inhibitors in
specified jurisdictions, and these patent rights are licensed to Biogen Idec.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal and
factual questions for which legal principles remain unresolved. In recent years patent rights have been the subject of significant
litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our and our licensors’ patent rights are
highly uncertain. Our and our licensors’ pending and future patent applications may not result in patents being issued which protect
our technology or products or which effectively prevent others from commercializing competitive technologies and products. Changes
in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our
patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the
laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent
applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at
all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in our owned and licensed
patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.
Assuming the other requirements for patentability are met, prior to March 16, 2013, in the United States, the first to make the claimed
invention is entitled to the patent, while outside the United States, the first to file a patent application is entitled to the patent. On
March 16, 2013, under the recently enacted America Invents Act, the United States moved to a first to file system.

The effects of these changes are currently unclear as the United States Patent and Trademark Office, or USPTO, has only recently
implemented various regulations, the courts have only just begun to issue decisions addressing these provisions and the applicability
of the act and new regulations on specific patents discussed herein have not been determined and would need to be reviewed. We may
become involved in opposition or interference proceedings challenging our patent rights or the patent rights of others, and the outcome
of any proceedings are highly uncertain. For example, in November 2013, Zentiva k.s. and Günter SÖLCH separately filed papers
with the European Patent Office opposing European Patent 2101760, assigned to Millennium Pharmaceuticals, Inc., to which we have
an exclusive license. This patent is related to a formulation of Betrixaban. The opposition proceedings are still pending. An adverse
determination in this or any other such proceeding could reduce the scope of, or invalidate, our patent rights, allow third parties to
commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to
manufacture or commercialize products without infringing third-party patent rights.

Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any
meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our
competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in
a non-infringing manner. The issuance of a patent is not conclusive as to its scope, validity or enforceability, and our owned and
licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in patent
claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop or prevent us from stopping others
from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our
technology and products. Given the amount of time required for the development, testing and regulatory review of new product
candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result,
our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products
similar or identical to ours or otherwise provide us with a competitive advantage.

We may become involved in lawsuits to protect or enforce our patents, which could be expensive, time-consuming and
unsuccessful.

Competitors may infringe our patents. To counter infringement or unauthorized use, we may be required to file infringement claims,
which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is
invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do
not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of
being invalidated or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with
intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during
this type of litigation.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which
would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our
product candidates and use our proprietary technologies without infringing, misappropriating or otherwise violating the proprietary
rights or intellectual property of third parties. We may become party to, or be threatened with, future adversarial proceedings or
litigation regarding intellectual property rights with respect to our products and technology, including interference proceedings before
the USPTO. An interference proceeding is a proceeding before the USPTO to determine the priority among multiple patents or patent
applications. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the
future. If we are found to infringe a third-party’s intellectual property rights, we could be required to obtain a license from such third-
party to continue developing and marketing our products and technology. However, we may not be able to obtain any required license
on commercially reasonable terms or at all.

Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies
licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product. In
addition, we could be found liable for monetary damages. A finding of infringement could prevent us from commercializing our
product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we
have misappropriated the confidential information or trade secrets of third parties can have a similar negative impact on our business.

We may be unable to protect the confidentiality of our trade secrets, thus harming our business and competitive position.

In addition to our patented technology and products, we rely upon trade secrets, including unpatented know-how, technology and
other proprietary information to develop and maintain our competitive position, which we seek to protect, in part, by confidentiality
agreements with our employees and our collaborators and consultants. We also have agreements with our employees and selected
consultants that obligate them to assign their inventions to us. However, it is possible that technology relevant to our business will be
independently developed by a person that is not a party to such an agreement. Furthermore, if the employees, consultants or
collaborators that are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies
for any such breach or violation, and we could lose our trade secrets through such breaches or violations. Further, our trade secrets
could be disclosed, misappropriated or otherwise become known or be independently discovered by our competitors. In addition,
intellectual property laws in foreign countries may not protect our intellectual property to the same extent as the laws of the United
States. If our trade secrets are disclosed or misappropriated, it would harm our ability to protect our rights and have a material adverse
effect on our business.

We may be subject to claims that our employees have wrongfully used or disclosed intellectual property of their former employers.
Intellectual property litigation or proceeding could cause us to spend substantial resources and distract our personnel from their
normal responsibilities.

Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our
competitors or potential competitors. Although we try to ensure that our employees do not use the proprietary information or know-
how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property,
including trade secrets or other proprietary information, of any such employee’s former employer. Litigation may be necessary to
defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable
intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation or other legal
proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and
management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings,
motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it
could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase
our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other
resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such
litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting
from the initiation and continuation of patent litigation or other intellectual property related proceedings could have a material adverse
effect on our ability to compete in the marketplace.

RISKS RELATED TO GOVERNMENT REGULATION

The regulatory approval process is expensive, time consuming and uncertain and may prevent us from obtaining approvals for the
commercialization of some or all of our product candidates.

The research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug products are
subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, which regulations
differ from country to country. We will not be permitted to market our product candidates in the United States until we receive
approval of an NDA or a BLA, from the FDA. We have not submitted an application or received marketing approval for any of our
product candidates. Obtaining approval of an NDA or BLA can be a lengthy, expensive and uncertain process. In addition, failure to
comply with FDA and other applicable U.S. and foreign regulatory requirements may subject us to administrative or judicially
imposed sanctions, including the following:

•

warning letters;

civil or criminal penalties and fines;

injunctions;

suspension or withdrawal of regulatory approval;

suspension of any ongoing clinical studies;

voluntary or mandatory product recalls and publicity requirements;

•

refusal to accept or approve applications for marketing approval of new drugs or biologics or supplements to approved
applications submitted by us;

restrictions on operations, including costly new manufacturing requirements; or

seizure or detention of our products or import bans.

Prior to receiving approval to commercialize any of our product candidates in the United States or abroad, we must demonstrate with
substantial evidence from well-controlled clinical studies, and to the satisfaction of the FDA and other regulatory authorities abroad,
that such product candidates are safe and effective for their intended uses. Results from preclinical studies and clinical studies can be
interpreted in different ways. Even if we and our collaboration partners believe the preclinical or clinical data for our product
candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities.
Administering any of our product candidates to humans may produce undesirable side effects, which could interrupt, delay or cause
suspension of clinical studies of our product candidates and result in the FDA or other regulatory authorities denying approval of our
product candidates for any or all targeted indications.

Regulatory approval of an NDA or BLA is not guaranteed, and the approval process is expensive and may take several years. The
FDA also has substantial discretion in the approval process. Despite the time and expense exerted, failure can occur at any stage, and
we could encounter problems that cause us to abandon or repeat clinical studies, or perform additional preclinical studies and clinical
studies. The number of preclinical studies and clinical studies that will be required for FDA approval varies depending on the product
candidate, the disease or condition that the product candidate is designed to address and the regulations applicable to any particular
product candidate. The FDA can delay, limit or deny approval of a product candidate for many reasons, including, but not limited to,
the following:

•

a product candidate may not be deemed safe or effective;

FDA officials may not find the data from preclinical studies and clinical studies sufficient;

the FDA may find our manufacturing data insufficient to support approval

the FDA might not approve our or our third-party manufacturer’s processes or facilities; or

the FDA may change its approval policies or adopt new regulations.

If any of our product candidates fails to demonstrate safety and efficacy in clinical studies or does not gain regulatory approval, our
business and results of operations will be materially and adversely harmed.

Even if we receive regulatory approval for a product candidate, we will be subject to ongoing regulatory obligations and continued
regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with
applicable regulatory requirements.

Once regulatory approval has been granted, the approved product and its manufacturer are subject to continual review by the FDA and
non-U.S. regulatory authorities. Any regulatory approval that we or our collaboration partners receive for our product candidates may
be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for potentially costly
post-marketing follow-up studies to monitor the safety and efficacy of the product. In addition, if the FDA or non-U.S. regulatory
authorities approve any of our product candidates, we will be subject to extensive and ongoing regulatory requirements by the FDA
and other regulatory authorities with regard to the labeling, packaging, adverse event reporting, storage, advertising, promotion and
recordkeeping for our products. In addition, manufacturers of our drug products are required to comply with cGMP regulations, which
include requirements related to quality control and quality assurance as well as the corresponding maintenance of records and
documentation. Further, regulatory authorities must approve these manufacturing facilities before they can be used to manufacture our
drug products, and these facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities
for compliance with cGMP regulations. If we or a third party discover previously unknown problems with a product, such as adverse
events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority
may impose restrictions on that product, the manufacturer or us, including requiring withdrawal of the product from the market or
suspension of manufacturing.

The regulatory requirements and policies may change and additional government regulations may be enacted for which we may also
be required to comply. We cannot predict the likelihood, nature or extent of government regulation that may arise from future
legislation or administrative action, either in the United States or in other countries. If we are not able to maintain regulatory
compliance, we may not be permitted to market our future products and our business may suffer.

Unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives could harm our business.

There is increasing pressure on biotechnology companies to reduce healthcare costs. In the U.S., these pressures come from a variety
of sources, such as managed care groups, institutional, and government purchasers. Increased purchasing power of entities that
negotiate on behalf of federal healthcare programs and private sector beneficiaries could increase pricing pressures in the future. Such
pressures may also increase the risk of litigation or investigation by the government regarding pricing calculations. The biotechnology
industry will likely face greater regulation and political and legal action in the future.

The regulations that govern marketing approvals, pricing and reimbursement for new therapeutic products vary widely from country to
country. Some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing
review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical
pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain
regulatory approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of
the product and negatively impact the revenue we are able to generate from the sale of the product in that country.

Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product
candidates obtain regulatory approval. Adverse pricing limitations prior to approval will also adversely affect us by reducing our
commercial potential. Our ability to commercialize any products successfully also will depend in part on the extent to which
reimbursement for these products and related treatments becomes available from government health administration authorities, private
health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health
maintenance organizations, decide which medications they will pay for and establish reimbursement levels.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and these third-party
payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly,
third-party payors are requiring that companies provide them with predetermined discounts from list prices and are challenging the
prices charged for medical products. We cannot be sure that coverage and reimbursement will be available for any product that we
commercialize and, if reimbursement is available, what the level of reimbursement will be. Reimbursement may impact the demand
for, or the price of, any product for which we obtain marketing approval. Obtaining reimbursement for our products may be
particularly difficult because of the higher prices often associated with products administered under the supervision of a physician. If
reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product
candidate that we successfully develop.

There may be significant delays in obtaining reimbursement for approved products, and coverage may be more limited than the
purposes for which the product is approved by the FDA or regulatory authorities in other countries. Moreover, eligibility for
reimbursement does not imply that any product will be paid for in all cases or at a rate that covers our costs, including research,
development, manufacture, sale and distribution. Interim payments for new products, if applicable, may also not be sufficient to cover
our costs and may not be made permanent. Payment rates may vary according to the use of the product and the clinical setting in
which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated into
existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by
government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of products from
countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage
policy and payment limitations in setting their own reimbursement policies. Our inability to promptly obtain coverage and profitable
payment rates from both government funded and private payors for new products that we develop could have a material adverse effect
on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

Failure to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our products internationally.

We may pursue commercialization of our future products in international markets, either through distribution and marketing partners
or our own commercial organization. In order to market our future products in the European Economic Area, or EEA, and many other
foreign jurisdictions, we must obtain separate regulatory approvals. Specifically, in the EEA, medicinal products can only be
commercialized after obtaining a Marketing Authorization, or MA. Before granting the MA, the European Medicines Agency or the
competent authorities of the member states of the EEA make an assessment of the risk-benefit balance of the product on the basis of
scientific criteria concerning its quality, safety and efficacy.

We have had limited interactions with foreign regulatory authorities, and the approval procedures vary among countries and can
involve additional clinical testing, and the time required to obtain approval may differ from that required to obtain FDA approval.
Clinical studies conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA does
not ensure approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not
ensure approval by regulatory authorities in other foreign countries or by the FDA. However, a failure or delay in obtaining regulatory
approval in one country may have a negative effect on the regulatory process in others. The foreign regulatory approval process may
include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if
at all. We may not be able to submit for regulatory approvals and even if we submit we may not receive necessary approvals to
commercialize our products in any market.

Healthcare reform measures could hinder or prevent our product candidates’ commercial success.

In the United States, there have been and we expect there will continue to be a number of legislative and regulatory changes to the
healthcare system in ways that could affect our future revenue and profitability and the future revenue and profitability of our potential
customers. Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes to the
healthcare system, some of which are intended to contain or reduce the costs of medical products and services. For example, one of
the most significant healthcare reform measures in decades, the Patient Protection and Affordable Care Act, as amended by the Health
Care and Education Affordability Reconciliation Act, collectively, the Affordable Care Act, was enacted in 2010. The Affordable
Care Act contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement
changes and fraud and abuse measures, all of which will impact existing government healthcare programs and will result in the
development of new programs. The Affordable Care Act, among other things:

•

imposes a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs,”
effective 2011;

increases the minimum level of Medicaid rebates payable by manufacturers of brand-name drugs from 15.1% to 23.1%,
effective 2011;

could result in the imposition of injunctions;

expanded Medicaid drug rebates to cover drugs paid by Medicaid managed care organizations;

changes the Medicaid rebate rates for line extensions or new formulations of oral solid dosage form;

expands the types of entities eligible for the “Section 340B discounts” for outpatient drugs;

requires manufacturers to participate in a coverage gap discount program, under which they must agree to offer 50%
point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage
gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and

•

creates a process for approval of biologic therapies that are similar or identical to approved biologics.

While the U.S. Supreme Court upheld the constitutionality of most elements of the Affordable Care Act in June 2012, other legal
challenges are still pending final adjudication in several jurisdictions. In addition, Congress has in the past proposed and likely will
continue to propose a number of legislative initiatives, including possible repeal of the Affordable Care Act. At this time, it remains
unclear whether there will be any changes made to the Affordable Care Act, whether to certain provisions or its entirety. We cannot
assure that the Affordable Care Act, as currently enacted or as amended in the future, will not adversely affect our business and
financial results and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform
will affect our business.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. For example, the
Budget Control Act of 2011, or Budget Control Act, among other things, created the Joint Select Committee on Deficit Reduction to
recommend proposals in spending reductions to Congress. The Joint Select Committee did not achieve a targeted deficit reduction of
at least $1.2 trillion for the years 2013 through 2021, which triggered the legislation’s automatic reduction to several government
programs, including aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, starting in 2013. In January
2013, President Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which delayed for another two
months the budget cuts mandated by the sequestration provisions of the Budget Control Act. The ATRA, among other things, also
reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the
government to recover overpayments to providers from three to five years. In March 2013, the President signed an executive order
implementing sequestration, and in April 2013, the 2% Medicare reductions went into effect. In December 2013, Congress amended
the Budget Control Act to provide greater discretionary spending in 2014 and 2015 than originally budgeted and provide relief from
the FDA user fee for two years. This amendment also extended the prohibition against reducing payments to Medicare providers by
more than 2% until 2023. In December 2014, Congress passed the Consolidated and Further Continuing Appropriations Act, 2015
and a tax extenders bill, both of which may negatively impact coverage and reimbursement of healthcare items and services.

There likely will continue to be legislative and regulatory proposals at the federal and state levels directed at containing or lowering
the cost of healthcare. We cannot predict the initiatives that may be adopted in the future or their full impact. The continuing efforts of
the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs
of healthcare may adversely affect:

•

our ability to set a price we believe is fair for our products;

our ability to generate revenue and achieve or maintain profitability; and

the availability of capital.

Further, changes in regulatory requirements and guidance may occur and we may need to amend clinical study protocols to reflect
these changes. Amendments may require us to resubmit our clinical study protocols to Institutional Review Boards for reexamination,
which may impact the costs, timing or successful completion of a clinical study. In light of widely publicized events concerning the
safety risk of certain drug products, regulatory authorities, members of Congress, the Governmental Accounting Office, medical
professionals and the general public have raised concerns about potential drug safety issues. These events have resulted in the recall
and withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and establishment of risk
management programs that may, for instance, restrict distribution of drug products or require safety surveillance and/or patient
education. The increased attention to drug safety issues may result in a more cautious approach by the FDA to clinical studies and the
drug approval process. Data from clinical studies may receive greater scrutiny with respect to safety, which may make the FDA or
other regulatory authorities more likely to terminate or suspend clinical studies before completion, or require longer or additional
clinical studies that may result in substantial additional expense and a delay or failure in obtaining approval or approval for a more
limited indication than originally sought.

Given the serious public health risks of high profile adverse safety events with certain drug products, the FDA may require, as a
condition of approval, costly risk evaluation and mitigation strategies, which may include safety surveillance, restricted distribution
and use, patient education, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse events,
preapproval of promotional materials and restrictions on direct-to-consumer advertising.

If we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial
condition could be adversely affected.

Pharmaceutical companies are heavily regulated by federal, state and local regulations in the countries in which business activities
occur. Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-
party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be
applicable to our business. We could be subject to laws and regulations governing healthcare fraud and abuse, advertising and other
promotional activities, data privacy and patient rights by both the federal government and the states in which we conduct our business.
The regulations that may affect our ability to operate include, without limitation:

•

the federal Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering,
soliciting, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an
individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under
federal healthcare programs, such as the Medicare and Medicaid programs;

the federal Physician Payment Sunshine Act or Open Payments Program provisions and the implementing regulations
which will require extensive tracking of physician and teaching hospital payments, maintenance of a payments database,
and public reporting of the payment data;

the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or
causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government;

federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false
statements relating to healthcare matters;

the Foreign Corrupt Practices Act and similar statutes and regulations in foreign jurisdictions, which makes it unlawful for
certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining
business;

the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information
Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions
and protects the security and privacy of protected health information; and

state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to
items or services reimbursed by any third-party payor, including commercial insurers.

The Affordable Care Act, among other things, amends the intent requirement of the Federal Anti-Kickback Statute and criminal
healthcare fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In
addition, the Affordable Care Act provides that the government may assert that a claim including items or services resulting from a
violation of the Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us,
we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our
operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate
our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against it,
could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Moreover,
achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

Our stock price may be volatile, and investors in our common stock could incur substantial losses.

Our stock price has fluctuated in the past and may be volatile in the future. The stock market in general, and the market for
biotechnology companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance
of particular companies. As a result of this volatility, investors may experiences losses on their investment in our stock. The market
price for our common stock may be influenced by many factors, including the following:

•

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital
commitments;

market conditions in the pharmaceutical and biotechnology sectors;

actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our
common stock, other comparable companies or our industry generally;

trading volume of our common stock;

sales of our common stock by us or our stockholders;

general economic, industry and market conditions; and

the other risks described in this “Risk factors” section.

These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating
performance. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against
companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and
resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Our executive officers, directors and principal stockholders have the ability to significantly influence all matters submitted to
stockholders for approval.

Based, in part, on a review of SEC filings, we believe that our executive officers, directors and stockholders who own more than 5%
of our outstanding common stock beneficially own close to half of our outstanding shares of common stock, based on shares of
common stock outstanding as of December 31, 2014. As a result, if these stockholders were to choose to act together, they would be
able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For
example, these stockholders, if they choose to act together, will significantly influence the election of directors and approval of any
merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an
acquisition of our company on terms that other stockholders may desire.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our
stock price and trading volume could decline.

The trading market for our common stock depends, in part, on the research and reports that securities or industry analysts publish
about us or our business. Securities and industry analysts may cease to publish research on our company at any time in their discretion.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could
decrease, which might cause our stock price and trading volume to decline. In addition, if one or more of the analysts who cover us
downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If our
operating results fail to meet the forecast of analysts, our stock price will likely decline.

Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may
prevent attempts by our stockholders to replace or remove our current management.

Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control
of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for
their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common
stock, thereby depressing the market price of our common stock. In addition, these provisions may frustrate or prevent any attempts by
our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our
board of directors. Because our board of directors is responsible for appointing the members of our management team, these
provisions could in turn affect any attempt by our stockholders to replace current members of our management team. Among others,
these provisions include the following:

•

our board of directors is divided into three classes with staggered three-year terms which may delay or prevent a change of
our management or a change in control;

our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or
the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board
of directors;

our stockholders may not act by written consent or call special stockholders’ meetings; as a result, a holder, or holders,
controlling a majority of our capital stock would not be able to take certain actions other than at annual stockholders’
meetings or special stockholders’ meetings called by the board of directors, the chairman of the board, the chief executive
officer or the president;

our certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority
stockholders to elect director candidates;

stockholders must provide advance notice and additional disclosures in order to nominate individuals for election to the
board of directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter
a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise
attempting to obtain control of our company; and

our board of directors may issue, without stockholder approval, shares of undesignated preferred stock; the ability to issue
undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other
rights or preferences that could impede the success of any attempt to acquire us.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General
Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining
with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding
voting stock, unless the merger or combination is approved in a prescribed manner.

Our employment agreements with our executive officers may require us to pay severance benefits to any of those persons who are
terminated in connection with a change in control of us, which could harm our financial condition or results.

Certain of our executive officers are parties to employment agreements that contain change in control and severance provisions
providing for aggregate cash payments of up to approximately $2.4 million for severance and other benefits and acceleration of
vesting of stock options with a value of approximately $39.3 million as of December 31, 2014, based on the closing price of our
common stock of $28.32 on such date in the event of a termination of employment in connection with a change in control of us. The
accelerated vesting of options could result in dilution to our existing stockholders and harm the market price of our common stock.
The payment of these severance benefits could harm our financial condition and results. In addition, these potential severance
payments may discourage or prevent third parties from seeking a business combination with us.

Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if
any, will be our stockholders’ sole source of gain.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all of our future earnings, if any,
to finance the growth and development of our business. In addition, the terms of existing or any future debt agreements may preclude
us from paying dividends. As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain
for the foreseeable future.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We lease approximately 60,000 square feet of research and office space in South San Francisco, California under a lease that expires
in March 2020. Thereafter, at our option, we may extend the term for an additional three years to March 2023. We believe that our
existing facilities are sufficient for our current needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

We are not currently a party to any material legal proceedings.

ITEM 4. MINE SAFETY DISCLOSURES

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

PRICE RANGE OF COMMON STOCK

Our common stock has been listed on The NASDAQ Global Market under the symbol “PTLA” since May 22, 2013. Prior to that date,
there was no public trading market for our common stock. Our initial public offering was priced at $14.50 per share on May 22, 2013.
The following table sets forth for the periods indicated the high and low sales prices per share of our common stock as reported on The
NASDAQ Global Market:

Fiscal Year ending December 31, 2013

Second Quarter (beginning May 22, 2013) .................................................................................................. $ 14.75 $
Third Quarter ................................................................................................................................................ $ 20.15 $
Fourth Quarter .............................................................................................................................................. $ 20.72 $

Fiscal Year ending December 31, 2014

First Quarter ................................................................................................................................................. $ 23.00 $
Second Quarter ............................................................................................................................................. $ 19.59 $
Third Quarter ................................................................................................................................................ $ 23.34 $
Fourth Quarter .............................................................................................................................................. $ 24.75 $

26.12
28.77
30.95

30.39
30.58
31.48
31.38

Low

High

On February 27 2015, the last reported sale price of our common stock as reported on The NASDAQ Global Market was $38.08 per
share.

As of February 27 2015, there were 48,952,668 shares of our common stock issued and outstanding with 32 holders of record of our
common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are
beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does
not include stockholders whose shares may be held in trust by other entities.

STOCK PRICE PERFORMANCE GRAPH

The following stock performance graph compares our total stock return with the total return for (i) the NASDAQ Composite Index
and the (ii) the [NASDAQ Biotechnology Index] for the period from May 22, 2013 (the date our common stock commenced trading
on the NASDAQ Global Market) through December 31, 2014. The figures represented below assume an investment of $100 in our
common stock at the closing price of $15.15 on May 22, 2013 and in the NASDAQ Composite Index and the NASDAQ
Biotechnology Index on May 22, 2013 and the reinvestment of dividends into shares of common stock. The comparisons in the table
are required by the Securities and Exchange Commission, or SEC, and are not intended to forecast or be indicative of possible future
performance of our common stock. This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that
Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended,
or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such
filing.

$250.00

$200.00

$150.00

$100.00

$50.00

$100 investment in
stock or index
Portola Pharmaceuticals, Inc. ......
NASDAQ Composite Index .......
NASDAQ Biotechnology Index .

Ticker
PTLA
IXIC
NBI

May 22, 2013
$
$
$

100.00 $
100.00 $
100.00 $

March 31, 2014
$
$
$

170.96 $
121.24 $
130.83 $

PTLA

IXIC

NBI

June 30, 2013

September 30, 2013 December 31, 2013
169.97
125.56
120.60

176.57 $
115.99 $
108.90 $

162.08 $
96.08 $
98.27 $

June 30, 2014

September 30, 2014 December 31, 2014
186.93
136.75
168.38

166.86 $
129.74 $
151.50 $

192.61 $
127.28 $
142.35 $

DIVIDEND POLICY

We have never declared or paid, and do not anticipate declaring, or paying in the foreseeable future, any cash dividends on our capital
stock. Future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors
and will depend on then existing conditions, including our operating results, financial conditions, contractual restrictions, capital
requirements, business prospects and other factors our board of directors may deem relevant.

USE OF PROCEEDS

On May 21, 2013, our registration statement on Form S-1 (File No. 333-187901) was declared effective for our initial public offering.
As a result of our initial public offering and the exercise of the overallotment option, both of which closed on May 28, 2013, we
received net proceeds of approximately $131.0 million, after underwriting discounts and commissions of approximately $9.4 million.
In addition, we incurred other expenses associated with our initial public offering of approximately $5.2 million. No payments for
such expenses were made directly or indirectly to any of our officers or directors.

On October 16, 2013, our registration statement on Form S-1 (File No. 333-191609) was declared effective for our follow-on public
offering. As a result of our follow-on public offering and the exercise of the overallotment which closed on October 22, 2013 and
November 14, 2013, respectively, we received net proceeds of approximately $120.8 million, after underwriting discounts and
commissions of approximately $7.7 million. We did not receive any proceeds from the sale of common stock by certain of our
existing stockholders in the follow-on public offering. In addition, we incurred other expenses associated with our follow-on public
offering of approximately $0.9 million. No payments for such expenses were made directly or indirectly to any of our officers or
directors.

On October 8, 2014, we closed an underwritten public offering of 6,200,000 shares of our common stock, at a public offering price of
$26.00 per share. In addition, on October 8, 2014, the underwriters of the offering exercised their over-allotment option to purchase an
additional 930,000 shares from us at the public offering price. The offer and sale of all of the shares in the offering were registered
under the Securities Act pursuant to an automatically effective registration statement on Form S-3 ASR (File No. 333-199094). The
net proceeds from the offering to us including the over-allotment option, net of underwriting discounts and commissions of
approximately $10.2 million, were approximately $175.2 million. We did not receive any proceeds from the sale of common stock by
certain of our existing stockholders in the follow-on public offering. In addition, we incurred other expenses associated with our
follow-on public offering of approximately $0.6 million. No payments for such expenses were made directly or indirectly to any of
our officers or directors.

The net proceeds from the offerings described above have been used and will be used, together with our cash, cash equivalents and
investments, to fund continued advancement of our Betrixaban, Andexanet alfa and Cerdulatinib programs, anticipated to be
approximately $200.0 million, with the balance to be used to fund working capital, capital expenditures and other general corporate
purposes, which may include the acquisition or licensing of other products, businesses or technologies.

There has been no material change in the planned use of proceeds from our initial public offering as described in our prospectus dated
May 22, 2013, filed with the SEC pursuant to Rule 424(b) of the Securities Act, the planned use of proceeds from our public offering
as described in our prospectus dated October 17, 2013, filed with the SEC pursuant to Rule 424(b) of the Securities Act or the planned
use of proceeds from our public offering as described in our prospectus dated October 2, 2014, filed with the SEC pursuant to Rule
424(b) of the Securities Act.

ISSUER PURCHASES OF EQUITY SECURITIES

None.

ITEM 6. SELECTED FINANCIAL DATA

You should read the following consolidated selected financial data together with the section of this report entitled “Management’s
discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the related notes
included in this report. The consolidated statement of operations data for the years ended December 31, 2014, 2013 and 2012 and the
consolidated balance sheet data as of December 31, 2014 and 2013 are derived from our audited consolidated financial statements
included elsewhere in this Annual Report on Form 10-K. The consolidated statements of operations data for the years ended
December 31, 2011 and 2010, and the consolidated balance sheet data as of December 31, 2012, 2011 and 2010 were derived from our
audited consolidated financial statements that are not included in this Annual Report on Form 10-K.

2014

Year Ended December 31,
2012

2011

2013

2010

Consolidated statements of operations data:
Collaboration and license revenue ...................................................... $
Operating expenses:

Research and development ........................................................
General and administrative ........................................................
Total operating expenses ..................................................
Income (loss) from operations ............................................................
Interest and other income, net .............................................................
Interest expense ..................................................................................
Income (loss) before income taxes ......................................................
Provision for income taxes .................................................................
Net income (loss) ................................................................................ $
Net income (loss) attributable to common stockholders:

9,625 $

10,531 $

72,042

78,029 $

35,268

123,639
23,552
147,191
(137,566)
441
–
(137,125)
–
(137,125) $

79,286
15,423
94,709
(84,178)
826
–
(83,352)
–
(83,352) $

49,717
11,469
61,186
10,856
510
–
11,366
–
11,366

46,089
12,071
58,160
19,869
136
(21)
19,984
–
19,984 $

43,260
10,762
54,022
(18,754)
1,659
(380)
(17,475)
2,794
(20,269)

Basic .......................................................................................... $
Diluted ....................................................................................... $

(137,125) $
(137,125) $

(83,352) $
(83,352) $

Net income (loss) per share attributable to common stockholders:

Basic .......................................................................................... $
Diluted ........................................................................................ $
Shares used to compute net income (loss) per share attributable to .....
common stockholders:

(3.19) $
(3.19) $

(3.65) $
(3.65) $

–
–

$
$

–
–

$
$

79 $
127 $

(20,269)
(20,269)

0.06 $
0.06 $

(16.79)
(16.79)

Basic ........................................................................................... 42,977,463 22,842,443
Diluted ........................................................................................ 42,977,463 22,842,443

1,350,939
2,048,867

1,249,778
2,089,206

1,207,106
1,207,106

(1) To date, substantially all of our revenue has been generated from our collaboration agreements, and we have not generated any

commercial product revenue. Revenue in the year ended December 31, 2011 includes $8.3 million that represents the
recognition of all remaining deferred revenue following the termination of an exclusive worldwide license and collaboration
agreement with Merck & Co., Inc., effective September 30, 2011. Revenue in the year ended December 31, 2012 includes $65.1
million that represents the recognition of all remaining deferred revenue following the termination of an exclusive worldwide
license agreement with Novartis Pharma A.G., effective July 1, 2012. See the section of this report entitled “Management’s
discussion and analysis of financial condition and results of operations—Financial operations overview—Revenue” for a more
detailed description of our revenue recognition with respect to our collaboration agreements.

2014

2013

As of December 31,
2012

2011

2010

Consolidated balance sheet data:
Cash, cash equivalents and investments ....... $
Restricted cash .............................................
Working capital ...........................................
Total assets ..................................................
Convertible preferred stock..........................
Total stockholders' equity (deficit) ..............

392,303 $

319,036 $

–

273,946
416,495

–

347,802

–

247,153
325,731
–
296,335

137,384
–
116,089
146,001
317,280
(191,569)

188,089 $
–
169,128
193,403
317,280
(206,105)

101,417
6,000
55,659
113,658
220,374
(228,407)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the section of
this report entitled “Selected financial data” and our financial statements and related notes included elsewhere in this report. This
discussion and other parts of this report contain forward-looking statements that involve risk and uncertainties, such as statements of
our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-
looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the
section of this report entitled “Risk factors.”

Overview

We are a biopharmaceutical company focused on the development and commercialization of novel therapeutics in the areas of
thrombosis, other hematologic disorders and inflammation for patients who currently have limited or no approved treatment options.
We are advancing our three wholly-owned compounds using novel biomarker and genetic approaches that may increase the likelihood
of clinical, regulatory and commercial success of our potentially life-saving therapies. Our two lead programs address significant
unmet medical needs in the area of thrombosis, or blood clots. Our first lead compound Betrixaban is a novel oral once-daily inhibitor
of Factor Xa in Phase 3 clinical trials for extended duration prophylaxis, or preventive treatment, of a form of thrombosis known as
venous thromboembolism, or VTE, in acute medically ill patients for 35 days of in-hospital and post-discharge use. Our second lead
compound Andexanet alfa, a Food and Drug Administration, or FDA-designated breakthrough therapy, is a recombinant protein
designed to reverse the anticoagulant activity in patients treated with a Factor Xa inhibitor. Andexanet alfa has potential indications to
treat patients who are taking a direct or indirect Factor Xa inhibitor and who suffer a major bleeding episode or require emergency
surgery. Andexanet alfa is currently being evaluated in Phase 3 and Phase 4 clinical trials. Our third product candidate, Cerdulatinib, is
an orally available kinase inhibitor that inhibits spleen tyrosine kinase, or Syk, and janus kinases, or JAK, enzymes that regulate
important signaling pathways. Cerdulatinib is being developed for hematologic, or blood, cancers and inflammatory disorders. We are
currently in a Phase 1/2a proof-of-concept study for Cerdulatinib in patients with non-Hodgkin’s lymphoma, or NHL, or chronic
lymphocytic leukemia, or CLL, who have failed or relapsed on existing marketed therapies or products in development, including
patients with identified mutations. In the Phase 1 dose escalation portion of the study, we have yet to reach the maximum tolerated
dose and enrollment continues. Based on interim Phase 1 data, we are advancing Cerdulatinib to the Phase 2a portion of the study
which includes expansion cohorts for which we expect to begin enrollment in 2015. We also have a program of highly selective Syk
inhibitors which is partnered with Biogen Idec Inc., or Biogen.

Our product candidates and collaboration agreements

Betrixaban

Betrixaban is a novel oral once-daily inhibitor of Factor Xa in development for extended duration VTE prophylaxis in acute medically
ill patients for 35 days of in-hospital and post-discharge use. Acute medically ill patients are those who are hospitalized for serious
non-surgical conditions, such as heart failure, stroke, infection, rheumatic disorders and pulmonary disorders. Our pivotal biomarker-
based Phase 3 study of Betrixaban, or APEX, is a randomized, double-blind, active-controlled, multicenter, multinational study
evaluating a once-daily dose of Betrixaban for 35 days for superiority as compared to in-hospital administration of enoxaparin once
daily for 6 to 14 days followed by placebo, for extended VTE prophylaxis in acute medically ill patients with restricted mobility and
other risk factors. Our APEX study is over 70% enrolled in 35 countries worldwide. We believe that Betrixaban has several clinically
important pharmacological properties that differentiate it from injectable enoxaparin and other oral Factor Xa inhibitors, including low
renal clearance, a metabolic profile that limits drug-drug interaction, and a long half-life. Based on current enrollment, we expect our
current Phase 3 APEX study of Betrixaban to complete patient enrollment by the end of 2015.

Andexanet alfa

Andexanet alfa is the first therapy to demonstrate reversal of the anticoagulant activity of Factor Xa inhibitors as measured by anti-
Factor Xa levels. We are currently evaluating Andexanet alfa in two Phase 3 ANNEXATM (Andexanet Alfa a Novel Antidote to the
Anticoagulant Effects of fXA Inhibitors) studies – one with BMS and Pfizer’s Factor Xa inhibitor, apixaban, and one with Bayer and
Janssen’s Factor Xa inhibitor, rivaroxaban. Our Phase 3 studies consist of two parts. In the first part of each study, the effect of a
single bolus of Andexanet alfa was evaluated in healthy volunteers who had been given apixaban or rivaroxaban. In the second part of
each study, the ability of Andexanet alfa to sustain reversal of the anticoagulant effects of apixaban and rivaroxaban will be evaluated
by administering a bolus plus infusion of Andexanet alfa to healthy volunteers who have been given apixaban or rivaroxaban. The first
part of our Phase 3 ANNEXATM studies of a single bolus of Andexanet alfa with apixaban and with rivaroxaban both met their
primary and secondary endpoints with high statistical significance (p-values of less than 0.0001). The second part of our Phase 3
ANNEXATM studies is ongoing.

In early 2015, we initiated a Phase 4 confirmatory patient study, or ANNEXA-4, as agreed to by the FDA and EMA as part of an
Accelerated Approval pathway for Andexanet alfa. This open-label, single-arm study is being conducted in patients receiving
apixaban, rivaroxaban or enoxaparin (a low molecular weight heparin) who present with an acute major bleed. Pursuant to discussions
with the FDA, we plan to include data from a small number of patients from this study in our Biologics License Application, or BLA,
which we expect to submit in 2015 for conditional approval.

Our current Phase 2 and Phase 3 studies are using clinical material from CMC Biologics, Inc., or CMC Biologics, who will also
support our BLA submission and initial commercial launch in the U.S. For large-scale manufacturing of Andexanet alfa, we signed an
agreement in June 2013 with Lonza Group Ltd, or Lonza. However, the first commercial material from Lonza will not become
available until after our expected U.S. launch. In July 2014, we entered into a commercial supply agreement with CMC Biologics to
increase their production capacity at a lower cost than that of our current clinical supply for Andexanet alfa. Total fixed commitments
under the agreement for the purchases of clinical and commercial batches, not taking into account possible price and batch
adjustments, are $293.9 million over the life of the agreement from 2015 through 2021. We do not anticipate that supply from CMC
Biologics, even as expanded, will be sufficient to meet projected worldwide demand for Andexanet alfa, therefore, we must also
develop an improved and more cost-effective process at Lonza. In October 2014, we entered into a manufacturing supply agreement
with Lonza, replacing the 2013 agreement, to increase our production capacity and to enhance our manufacturing process at Lonza to
support broader worldwide supply following our potential BLA filing. Under this manufacturing supply agreement, we will be
required to purchase at least seven commercial batches of Andexanet alfa from Lonza, for a period of five years, following our first
regulatory approval.

In February 2013, we entered into a three-way agreement with Bayer and Janssen to include subjects dosed with rivaroxaban, their
jointly owned Factor Xa inhibitor product, in one of our proof-of-concept studies of Andexanet alfa. See the section of this report
entitled “Business—Collaboration and license agreements—Bayer and Janssen agreements” for a more detailed description of this
agreement. We are responsible for the cost of conducting this clinical study. Under the terms of the agreement, Bayer and Janssen
have each provided us with an upfront and non-refundable fee of $2.5 million, for an aggregate fee of $5.0 million. The agreement
also provides for additional non-refundable payments to us from Bayer and Janssen of $250,000 each for an aggregate fee of $500,000
following the delivery of the final written study report of our Phase 2 proof-of-concept studies of Andexanet alfa. We are also
obligated to participate on a Joint Collaboration Committee, or JCC, with Bayer and Janssen to oversee the collaboration activities
under the agreement. We originally estimated the period of performance of our obligations to extend through the fourth quarter of
2013. We have added cohorts that were not planned as part of the initial study design at the inception of the agreement and therefore
revised our estimated period of performance to now be through 2015. The total consideration under this agreement of $5.5 million was
recognized as revenue on a straight-line basis over the estimated performance period through the end of 2014.

In June 2013, we entered into an agreement with Daiichi Sankyo, Inc., or Daiichi Sankyo, to include subjects dosed with edoxaban,
Daiichi Sankyo’s Factor Xa inhibitor product, in one of our proof-of-concept studies of Andexanet alfa. We are responsible for the
cost of conducting this clinical study. Under the terms of the agreement, Daiichi Sankyo provided us with an upfront fee of $6.0
million. Daiichi Sankyo may terminate the agreement at any time. The total consideration under this agreement of $6.0 million was
received in July 2013. We are obligated to perform preclinical proof-of-concept studies and participate on a JCC with Daiichi Sankyo
to oversee the collaboration activities under the agreement. We originally estimated the non-contingent period of performance to be
through the second quarter of 2014. In December 2013, the JCC agreed to forego certain preclinical studies that were planned in the
original study design at the inception of the agreement. As a result of this change, we revised our estimated period of performance to
be through the first quarter of 2014. The total non-contingent consideration under this agreement of $3.0 million was recognized as
revenue on a straight-line basis over our estimated non-contingent performance period through the first quarter of 2014. The
contingent consideration under this agreement of $3.0 million commenced upon resolution of the contingency in the first quarter of
2014 and is being recognized over the remaining estimated period of performance through the fourth quarter of 2015.

In January 2014, we entered into a second collaboration agreement with BMS and Pfizer to further study the safety and efficacy of
Andexanet alfa as a reversal agent to apixaban, through our Phase 3 studies. We initiated Phase 3 studies in the first half of 2014.
Under the terms of the Phase 3 agreement, we received an upfront payment of $13.0 million, subject to a 50% refund provision, and
are eligible to receive additional development and regulatory milestone and contingent payments of up to $12.0 million, subject to a
50% refund provision. These payments represent the total consideration under this agreement. BMS and Pfizer will continue to
provide development and regulatory guidance for the program. Under both agreements with BMS and Pfizer, we retain full,
worldwide development and commercial rights to Andexanet alfa. This Phase 3collaboration agreement will continue in force until the
approval of Andexanet alfa as a reversal agent for apixaban by the FDA and EMA. BMS and Pfizer may terminate this agreement for
convenience with 60 days’ advance written notice or for our bankruptcy or change of control. In addition, either party may terminate
this agreement for the other party’s uncured material breach, material safety issues, or failure of the Phase 3 studies.

In February 2014, we entered into a second collaboration agreement with Bayer and Janssen to further study the safety and efficacy of
Andexanet alfa as a reversal agent to rivaroxaban through our Phase 3 studies. Our original collaboration agreement with Bayer and
Janssen, covers the conduct of a Phase 2 proof-of-concept study. The second collaboration agreement covers the conduct of Phase 3
studies of Andexanet alfa with rivaroxaban and any potential U.S. and EU regulatory approval of Andexanet alfa as reversal agent of
rivaroxaban. The Phase 3 studies are currently ongoing. Under this second collaboration agreement, we received an upfront payment
of $10.0 million and are eligible to receive additional development and regulatory milestone payments of up to $15.0 million. These
payments represent the total consideration under this agreement. The total upfront consideration under this agreement is being
recognized as revenue on a straight-line basis over the estimated period of performance period. In the third quarter of 2014 we updated
our estimated period of performance from the first quarter of 2017 to the first quarter of 2018 to reflect a modification to our clinical
development and regulatory plans. Bayer and Janssen will continue to provide development and regulatory guidance for the program.

Under both agreements with Bayer and Janssen, we retain full, worldwide development and commercial rights to Andexanet alfa. This
Phase 3 collaboration agreement will continue in force until the approval of Andexanet alfa as a reversal agent for rivaroxaban by the
FDA and EMA. Bayer and Janssen may terminate this agreement for convenience with 60 days’ advance written notice or for our
bankruptcy or change of control. In addition, either party may terminate this agreement for the other party’s uncured material breach
or material safety issues, or we can also terminate this agreement for failure of the Phase 3 studies.

In July 2014, we entered into a second collaboration agreement with Daiichi Sankyo to further study the safety and efficacy of
Andexanet alfa as a reversal agent to edoxaban through Phase 3 studies. The second collaboration agreement covers the conduct of
Phase 3 studies of Andexanet alfa with edoxaban and any potential U.S. and EU regulatory approval of Andexanet alfa as a reversal
agent for edoxaban. Under this Phase 3 collaboration agreement we received an upfront payment of $15.0 million and are eligible to
receive additional development and regulatory milestone payments of up to $25.0 million. These payments represent the total
consideration under this agreement. The total upfront consideration under this agreement is being recognized as revenue on a straight-
line basis over the estimated performance period through the third quarter of 2018. Daiichi Sankyo will continue to provide
development and regulatory guidance for the program.

Under both agreements with Daiichi Sankyo, we retain full, worldwide development and commercial rights to Andexanet alfa.

This Phase 3 collaboration agreement will continue in force until the approval of Andexanet alfa as a reversal agent for edoxaban by
the FDA and EMA. Bayer and Janssen may terminate this agreement for convenience with 60 days’ advance written notice or for our
bankruptcy or change of control. In addition, either party may terminate this agreement for the other party’s uncured material breach
or material safety issues or we can also terminate this agreement for failure of the Phase 3 studies.

Cerdulatinib

In addition to our thrombosis products, we are developing an orally available kinase inhibitor to treat hematologic disorders and
inflammation. Cerdulatinib is an orally available, potent dual spleen tyrosine kinase (Syk) and janus kinase (JAK) inhibitor. Scientists
have demonstrated that both Syk and JAK play key roles in various hematologic cancers and inflammatory diseases. We are
developing Cerdulatinib for treatment of certain B-cell hematologic cancers, with a particular focus on patients who have NFkB
activating mutations or acquired mutations to other novel B-cell targeted therapies that cause treatment failure or disease relapse.
Cerdulatinib has completed preclinical testing and has demonstrated in-vitro activity in cancer cell lines with NFkB activating
mutations and in patient tumor samples with acquired mutations to novel B-cell targeted drug candidates. In October 2013, we
initiated a Phase 1/2a proof-of-concept study in non-Hodgkin’s lymphoma, or NHL, and chronic lymphocytic leukemia, or CLL,
patients. In the Phase 1 dose escalation portion of the study, we have yet to reach the maximum tolerated dose and enrollment
continues. Based on interim Phase 1 data, we are advancing Cerdulatinib to the Phase 2a portion of the study which includes
expansion cohorts for which we expect to begin enrollment in 2015.

Selective Syk inhibitors

We have a program of highly selective Syk inhibitors which is partnered with Biogen Idec Inc. Biogen Idec is leading the pre-clinical
study of highly selective Syk inhibitors for allergic asthma and other inflammatory disorders and is responsible for all development-
related expenses. Syk is an important mediator of immune response in a number of different types of immune cells. Our selective Syk
inhibitors have been successfully evaluated in 131 subjects in several Phase 1 clinical studies. Biogen Idec Inc., or Biogen Idec, is
leading the pre-clinical study of selective Syk inhibitors for allergic asthma and other inflammatory disorders and is responsible for all
development-related expenses.

In October 2011, we entered into an exclusive, worldwide license and collaboration agreement with Biogen Idec to develop and
commercialize selective Syk kinase inhibitors for the treatment of autoimmune and inflammatory diseases. Under this agreement,
Biogen Idec is responsible for all development-related expenses. In April 2014, we entered into an amendment to the Biogen Idec
license and collaboration agreement under which Biogen Idec released to us one of the Syk kinase inhibitors for use in topical
ophthalmic indications.

Other

Prior to 2012, we were developing Elinogrel, a novel anti-platelet agent. In February 2009, we entered into a worldwide collaboration
and license agreement with Novartis Pharma A.G., or Novartis, to develop and commercialize Elinogrel. Novartis made an upfront
cash payment to us of $75.0 million, and the agreement also provided for additional payments based on the achievement of certain
development, regulatory and commercialization milestones. In April 2012, we and Novartis agreed to a plan for Novartis to return all
rights to Elinogrel to us and to terminate our agreement, effective July 1, 2012. As of the time of termination, no milestones had been
achieved and no royalties had been triggered pursuant to our agreement with Novartis. Although we may resume development of
Elinogrel in the future, we currently do not plan to do so.

For purposes of this discussion and analysis of our financial condition and results of operations, we refer to our agreements with
Lee’s, BMS and Pfizer, Bayer and Janssen, Daiichi Sankyo, Aciex, Biogen Idec, and Novartis collectively as our collaboration
agreements.

Financial operations overview

Revenue

Our revenue to date has been generated primarily from collaboration and license revenue pursuant to our collaboration agreements.
We have not generated any revenue from commercial product sales to date. Since inception, in connection with our agreements with
Biogen Idec, Merck & Co., Inc., Novartis, BMS and Pfizer, Bayer and Janssen, Daiichi Sankyo and Lee’s, we have received payments
in the aggregate amount of $219.7 million, as initial upfront payments, contingent consideration and a milestone payment of which
$6.5 million is subject to a 50% refund provision, pursuant to our Phase 3 clinical collaboration agreement with BMS and Pfizer. We
recognize revenue from payments ratably over the term over the term of our estimated period of performance under the agreements if
we have a performance obligation, or immediately if there is stand-alone value for any delivered item.

We may also be entitled to additional milestone payments and other contingent payments upon the occurrence of specific events. Due
to the nature of these collaboration agreements and the nonlinearity of the earnings process associated with certain payments and
milestones, we expect that our revenue will continue to fluctuate in future periods.

The following table summarizes the sources of our revenue for the years ended December 31, 2014, 2013 and 2012, in thousands:

Year Ended December 31,

2014

2013

2012

Novartis:

Recognition of upfront license fee ................................................................... $
Reimbursement of research and development expense ....................................
Novartis total ..........................................................................................

– $
–
–

BMS and Pfizer:

Recognition of research and development services .........................................
BMS and Pfizer total ..............................................................................

Bayer and Janssen:

Recognition of research and development services .........................................
Bayer and Janssen total ...........................................................................

Lee’s:

Recognition of research and development services .........................................
Lee’s total ...............................................................................................

Daiichi Sankyo:

1,497
1,497

3,598
3,598

243
243

4,042
4,042

3,876
3,876

194
194

53,846
16,238
70,084

1,958
1,958

–
–

Recognition of research and development services .........................................
Daiichi Sankyo total ...............................................................................

Total collaboration and license revenue .................................................................... $

4,287
4,287
9,625 $

2,419
2,419
10,531 $

–
–
72,042

Research and development expenses

Research and development expenses represent costs incurred to conduct research, such as the discovery and development of our
unpartnered product candidates, as well as discovery and development of clinical candidates pursuant to our collaboration agreements.
We recognize all research and development costs as they are incurred. Payments made prior to the receipt of goods or services to be
used in research and development are capitalized until the goods are received or services are rendered.

Our research and development expenses may increase or decrease by amounts we may pay or receive under various cost-sharing
provisions of our collaboration and license agreements.

We expect our research and development expenses to increase as we continue to advance our product candidates through clinical
development. We intend to identify partnerships to further develop other product candidates that strengthen our pipeline, which may
offset a portion of our research and development expenses through reimbursement from these partners. In addition, if any of our
product candidates receive regulatory approval for commercial sale, we expect to incur significant expenses associated with the
establishment of a hospital-based sales force in the United States and possibly other major markets. Because of the numerous risks and
uncertainties associated with drug development, we are unable to predict the timing or amount of expenses incurred or when, or if, we
will be able to achieve and sustain profitability.

The following table summarizes our research and development expenses by product candidate:

Phase of
Development

2014

Year Ended December 31,
2013
(in thousands)

2012

Product candidate
Betrixaban ....................................................................................
Andexanet alfa .............................................................................
Cerdulatinib .................................................................................
Syk selective inhibitor .................................................................
Elinogrel(1) ...................................................................................
Other research and development expenses(2) ...............................
Total research and development expenses(3) ................................

Phase 3 $
Phase 3 and 4
Phase 1/2a
Pre-clinical
Phase 3 ready

64,252 $
52,576
5,861
(41)
(30)
1,021
123,639 $

40,641 $
33,420
5,242
(113)
59
37
79,286 $

27,297
15,049
726
3,344
172
3,129
49,717

(1) We are currently not developing Elinogrel but may resume development in the future.
(2) Amounts in all periods include costs for other potential product candidates.
(3) Our research and development expenses have been reduced by reimbursements of certain research and development expenses
pursuant to the cost-sharing provisions of our agreements with Biogen Idec commencing in the fourth quarter of 2011 and
MyoKardia, Inc. and Global Blood Therapeutics, Inc. commencing in the fourth quarter of 2012.

The program-specific expenses summarized in the table above include costs directly attributable to our product candidates. We
allocate research and development salaries, benefits, stock-based compensation and indirect costs to our product candidates on a
program-specific basis, and we include these costs in the program-specific expenses. The largest component of our total operating
expenses has historically been our investment in research and development activities, including the clinical development of our
product candidates. We expect our research and development expenses to increase in the future. The process of conducting the
necessary clinical research to obtain FDA approval is costly and time consuming. We consider the active management and
development of our clinical pipeline to be crucial to our long-term success. The actual probability of success for each product
candidate and clinical program may be affected by a variety of factors including: the quality of the product candidate, early clinical
data, investment in the program, competition, manufacturing capability and commercial viability. Furthermore, in the past we have
entered into collaborations with third parties to participate in the development and commercialization of our product candidates, and
we may enter into additional collaborations in the future. In situations in which third parties have control over the preclinical
development or clinical study process for a product candidate, the estimated completion dates are largely under the control of such
third parties and not under our control. We cannot forecast with any degree of certainty which of our product candidates, if any, will
be subject to future collaborations or how such arrangements would affect our development plans or capital requirements. As a result
of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development
projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

General and administrative expenses

General and administrative expenses consist primarily of personnel costs, allocated facilities costs and other expenses for outside
professional services, including legal, human resources, audit and accounting services. Personnel costs consist of salaries, benefits and
stock-based compensation. We are incurring additional expenses as a result of operating as a public company that is now subject to the
internal control reporting requirements of the Sarbanes-Oxley Act of 2002, or SOX, as well as other costs including expenses related
to compliance with the rules and regulations of the Securities and Exchange Commission, or SEC, and those of The NASDAQ Global
Market, additional insurance expenses, investor relations activities and other administration and professional services.

Interest and other income, net

Interest and other income, net consists primarily of interest received on our cash, cash equivalents and investments, unrealized gains
and losses from the remeasurement of our foreign currency bank balances and foreign currency forward contracts and gains and losses
resulting from the remeasurement of our convertible preferred stock warrant liability. We recorded adjustments to the estimated fair
value of the convertible preferred stock warrants until they were converted into warrants to purchase shares of our common stock upon
the closing of our initial public offering, or IPO in May 2013. At that time, we reclassified the convertible preferred stock warrant
liability to additional paid-in capital and we will no longer record any related periodic fair value adjustments.

Critical accounting policies and significant judgments and estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,
which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation
of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated
and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors
that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under
different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 of our financial statements included in this Annual
Report on Form 10-K, we believe the following accounting policies to be critical to the judgments and estimates used in the
preparation of our financial statements.

Variable Interest Entities

We review agreements we enter into with third party entities, pursuant to which we may have a variable interest in the entity, in order
to determine if the entity is a variable interest entity, or VIE. If the entity is a VIE, we assess whether or not we are the primary
beneficiary of that entity. In determining whether we are the primary beneficiary of an entity, we apply a qualitative approach that
determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to
absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. If we determine we
are the primary beneficiary of a VIE, we consolidate the statements of operations and financial condition of the VIE into our
consolidated financial statements.

Our determination about whether we should consolidate such VIEs is made continuously as changes to existing relationships or future
transactions may result in a consolidation or deconsolidation event.

Revenue recognition

We generate revenue from collaboration and license agreements for the development and commercialization of our products.
Collaboration and license agreements may include non-refundable or partially refundable upfront license fees, partial or complete
reimbursement of research and development costs, contingent consideration payments based on the achievement of defined
collaboration objectives and royalties on sales of commercialized products. Our performance obligations under our collaborations
include the transfer of intellectual property rights (licenses), obligations to provide research and development services and related
clinical drug supply, obligation to provide regulatory approval services and obligations to participate on certain development and/or
commercialization committees with the collaborators. Upfront payments are recorded as deferred revenue in our consolidated balance
sheet and are recognized as collaboration revenue over our estimated period of performance that is consistent with the terms of the
research and development obligations contained in each collaboration agreement. We regularly review the estimated periods of
performance related to our collaborations based on the progress made under each arrangement. Our estimates of our performance
period may change over the course of the collaboration term. Such a change could have a material impact on the amount of revenue
we record in future periods.

Payments that are contingent upon achievement of a substantive milestone are recognized in their entirety in the period in which the
milestone is achieved. A milestone is defined as an event that can only be achieved based on our performance and there is substantive
uncertainty about whether the event will be achieved at the inception of the arrangement. Events that are contingent only on the
passage of time or only on counterparty performance are not considered milestones subject to this guidance. Further, the amounts
received must relate solely to prior performance, be reasonable relative to all of the deliverables and payment terms within the
agreement and commensurate with our performance to achieve the milestone after commencement of the agreement. Payments
contingent upon achievement of events that are not considered substantive milestones are allocated to the respective arrangements unit
of accounting when received and recognized as revenue based on the revenue recognition policy for that unit of accounting.

Amounts from sales of licenses are recognized as revenue. Amounts received as funding of research and development or regulatory
approval activities are recognized as revenue if the collaboration arrangement involves the sale of our research or development and
regulatory approval services at amounts that exceed our cost. However, such funding is recognized as a reduction in research and
development expense when we engage in a research and development project jointly with another entity, with both entities
participating in project activities and sharing costs and potential benefits of the arrangement.

Amounts related to research and development and regulatory approval funding are recognized as the related services or activities are
performed, in accordance with the contract terms. Payments may be made to or by us based on the number of full-time equivalent
researchers assigned to the collaboration project and the related research and development expenses incurred.

Research and development and accrued research and development expenses

Research and development costs are expensed as incurred and consist of salaries and benefits, lab supplies, materials and facility costs,
as well as fees paid to other nonemployees and entities that conduct certain research and development activities on our behalf.
Amounts incurred in connection with collaboration and license agreements are also included in research and development expense.
Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or
services are received.

As part of the process of preparing financial statements, we are required to estimate and accrue expenses, the largest of which are
research and development expenses. This process involves the following:

(cid:121)

communicating with our applicable personnel to identify services that have been performed on our behalf and estimating
the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or
otherwise notified of actual cost;

estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and
circumstances known to us at the time; and

(cid:121) periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if

necessary.

Examples of estimated research and development expenses that we accrue include:

(cid:121)

fees paid to CROs in connection with preclinical and toxicology studies and clinical studies;

fees paid to investigative sites in connection with clinical studies;

fees paid to CMOs in connection with the production of clinical study materials; and

(cid:121) professional service fees for consulting and related services.

We base our expense accruals related to clinical studies on our estimates of the services received and efforts expended pursuant to
contracts with multiple research institutions and clinical research organizations that conduct and manage clinical studies on our behalf.
The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some
of these contracts depend on factors, such as the successful enrollment of patients and the completion of clinical study milestones. Our
service providers invoice us monthly in arrears for services performed. In accruing service fees, we estimate the time period over
which services will be performed and the level of effort to be expended in each period. If we do not identify costs that we have begun
to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could
differ from our estimates.

To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting
period. However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as
we become aware of additional information about the status or conduct of our clinical studies and other research activities.

Clinical Trial Accruals

Stock-based compensation

We recognize compensation costs related to stock options granted to employees based on the estimated fair value of the awards on the
date of grant, net of estimated forfeitures. We estimate the grant date fair value, and the resulting stock-based compensation expense,
using the Black-Scholes option-pricing model. The grant date fair value of the stock-based awards is generally recognized on a
straight-line basis over the requisite service period, which is generally the vesting period of the respective awards.

The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions which determine the fair
value of stock-based awards, including the expected term and the price volatility of the underlying stock. The expected term of
employee options granted is determined using the simplified method (based on the midpoint between the vesting date and the end of
the contractual term). As sufficient trading history does not yet exist for our common stock, therefore our estimate of expected
volatility is based on the volatility of other companies with similar products under development, market, size and other factors.

Prior to our IPO in May 2013, stock based compensation cost was measured at the date of grant, based on the estimated fair value of
the award as determined by our board of directors and recognized as expense on a straight-line basis over the requisite service period.
Our board of directors, with the assistance of management and, in some cases, an independent third-party valuation consultant,
determined the estimated fair value of our common stock. In determining the estimated fair value of our common stock, our board of
directors used a combination of the market multiple approach and the IPO value approach to estimate the enterprise value of our
company in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide: Valuation of
Privately-Held-Company Equity Securities Issued as Compensation. The per share common stock value was estimated by allocating
the enterprise value using the probability-weighted expected return method at each valuation date prior to December 2011 and
commencing in December 2012. The per share common stock value was estimated by using the option pricing method at each
valuation date between December 2011 and December 2012. For the options granted subsequent to our IPO, the exercise price of
stock options is equal to the closing market price of the underlying common stock on the grant date.

We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these
options is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee options in
each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option. The
compensation costs of these arrangements are subject to remeasurement over the vesting terms as earned.

We expect to continue to grant stock options in the future, and to the extent that we do, our actual stock-based compensation expense
recognized in future periods will likely increase.

Income taxes

We file U.S. federal income tax returns and California, Alaska and Massachusetts state tax returns. To date, we have not been audited
by the Internal Revenue Service or any state income tax authority.

We provide for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of
income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based
on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss and credit
carryforwards, and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse.
Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than
not that some or all of the tax benefits will not be realized. The recognition, derecognition and measurement of a tax position is based
on management’s best judgment given the facts, circumstances and information available at the reporting date. Our policy is to
recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To
date, there have been no interest or penalties charged in relation to the underpayment of income taxes.

As of December 31, 2014, our total deferred tax assets were $183.6 million. The deferred tax assets were primarily comprised of
federal and state tax net operating losses and tax credit carryforwards. Utilization of the net operating loss and tax credit carryforwards
may be subject to an annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue
Code of 1986, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss and tax
credit carryforwards before their utilization. In 2013, we performed an analysis on annual limitation as a result of ownership changes
that may have occurred through November 2013. Our analysis indicates that a change occurred during 2013. As a result of this
change, our net operating loss and tax credit carryforwards will not be subject to limitation in total, but we may be subject to a
limitation as it relates to the timing of utilization. However, due to a lack of historical earnings and uncertainties surrounding our
ability to generate future taxable income to realize these tax assets, a full valuation allowance has been established to offset our
deferred tax assets.

Comparison of the years ended December 31, 2014 and 2013

Revenue

Year Ended December 31,
2013
2014

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

Collaboration and license revenue ............................................. $

9,625 $

10,531 $

(906 )

(9%)

The decrease in collaboration and license revenue during 2014 was primarily due to the decrease in revenue following the completion
of our Phase 2 agreement with BMS and Pfizer. We recognized $1.5 million from our Phase 2 agreement with BMS and Pfizer during
2014, compared to revenue of $4.0 million recognized from the same agreement with BMS and Pfizer during 2013. This decrease in
collaboration and license revenue was partially offset by an increase in revenue recognized during 2014 from our agreements with
Daiichi Sankyo of $4.3 million compared to revenue recognized during 2013 of $2.4 million due to revenue recognized from the
second collaboration agreement entered into with Daiichi Sankyo in the third quarter of 2014.

We expect revenue recognized in future periods to fluctuate as we recognize revenue related to our existing collaboration agreements
and enter into new collaboration agreements.

Research and development expenses

Research and development expenses .......................................... $

123,639 $

79,286 $

44,353

56%

The increase in research and development expenses was primarily due to the following:

Year Ended December 31,
2013
2014

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

(cid:121)

increased program costs of $23.6 million to advance Betrixaban;

increased program costs of $19.2 million to advance Andexanet alfa;

increased program costs of $0.6 million to advance Cerdulatinib; and

increased development costs of $1.0 million to support early research programs that are not related to or in support of our
primary programs of development.

We expect our research and development expenses to increase in the future as we advance our product candidates through clinical
development. The timing and amount of expenses incurred will depend largely upon the outcomes of current or future clinical studies
for our product candidates as well as the related regulatory requirements, manufacturing costs and any costs associated with the
advancement of our preclinical programs.

General and administrative expenses

Year Ended December 31,
2013
2014

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

General and administrative expenses .......................................... $

23,552 $

15,423 $

8,129

53%

The increase in general and administrative expenses during 2014 was primarily related to increased headcount related costs including
an increase in stock based compensation expense of $3.3 million, and increased costs associated with being a public company
including directors and officer’s insurance and director fees of $0.4 million, and higher professional and legal fees to support business
development, collaboration arrangements and pre-commercial activities of $4.3 million.

We expect general and administrative expenses to continue to increase in order to support the costs of related to our compliance with
internal controls over financial reporting under the Sarbanes-Oxley Act of 2002, or SOX, and our growing business.

Interest and other income, net

Year Ended December 31,
2013
2014

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

Interest and other income, net .................................................... $

441 $

826 $

(385 )

(47%)

Interest and other income, net decreased as a result of unfavorable fluctuations in the Euro compared to the U.S. dollar and the losses
related to our Euro forward contracts and foreign currency exchange gains of $0.7 million, partially offset by increased interest
income of $0.4 million earned on higher cash, cash equivalents and investments balances .

Comparison of the years ended December 31, 2013 and 2012

Revenue

Year Ended December 31,
2012
2013

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

Collaboration and license revenue ............................................. $

10,531 $

72,042 $

(61,511 )

(85%)

The decrease in collaboration and license revenue during 2013 was due to the decrease in revenue from Novartis following the
termination of our agreement with Novartis effective July 1, 2012. We recognized no revenue from our agreement with Novartis
during 2013, compared to revenue of $70.1 million recognized from our agreement with Novartis during 2012. This decrease in
collaboration and license revenue was partially offset by revenue recognized during 2013 with respect to our agreements with BMS
and Pfizer of $4.0 million, Bayer and Janssen of $3.9 million, Lee’s of $0.2 million and Daiichi Sankyo of $2.4 million.

Research and development expenses

Research and development expenses ......................................... $

79,286 $

49,717 $

29,569

59%

Year Ended December 31,
2012
2013

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

The increase in research and development expenses was primarily due to the following:

(cid:121)

increased program costs of $13.3 million to advance Betrixaban;

increased program costs of $18.4 million to advance Andexanet alfa; and

increased program costs of $4.5 million to advance Cerdulatinib.

These increases were partially offset by:

(cid:121) decreased net program costs of $3.5 million related to PRT2607, primarily due to reimbursements received from Biogen
Idec to fund clinical and manufacturing costs pursuant to the cost-sharing provisions of our agreement with Biogen Idec;
and

(cid:121) decreased development costs of $3.2 million as we reduced costs for programs that are not related to or in support of our

primary programs of development; Betrixaban, Andexanet alfa and Cerdulatinib.

General and administrative expenses

General and administrative expenses .......................................... $

15,423 $

11,469 $

3,954

34%

Year Ended December 31,
2012
2013

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

The increase in general and administrative expenses during 2013 was primarily related to increased headcount related costs including
an increase in stock based compensation expense of $3.3 million, and increased costs associated with being a public company
including directors and officer’s insurance and director fees of $0.5 million, and higher professional and legal fees to support business
development and collaboration arrangements of $0.1 million.

Interest and other income, net

Year Ended December 31,
2012
2013

Increase /
(Decrease)

% Increase /
(Decrease)

(in thousands, except percentages)

Interest and other income (expense), net .................................... $

826 $

510 $

316

62%

Interest and other income, net increased as a result of interest income of $0.1 million earned on higher cash, cash equivalents and
investments balances and foreign currency exchange gains of $0.3 million primarily related to favorable fluctuations in the Euro
compared to the U.S. dollar and the unrealized gains related to our Euro forward contracts. The increase was partially offset by
decreased other income of $0.1 million due to the fair value remeasurement of our convertible preferred stock warrants.

Liquidity and capital resources

Due to our substantial research and development expenditures, we have generated significant operating losses since our inception. We
have funded our operations primarily through sales of our common stock as part of our IPO and follow-on public offering, and our
convertible preferred stock and amounts received from our collaboration partners. Our expenditures are primarily related to research
and development activities. At December 31, 2014, we had available cash, cash equivalents and investments of $392.3 million. Our
cash, cash equivalents and investments are held in a variety of interest-bearing instruments, including investments backed by U.S.
government agencies, corporate debt securities and money market accounts. Cash in excess of immediate requirements is invested
with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and degrees of
risk.

The following table summarizes our cash flows for the periods indicated:

Cash used in operating activities .................................................................. $
Cash used in investing activities .................................................................. $
Cash provided by financing activities .......................................................... $
Net increase (decrease) in cash .............................................................. $

(100,706) $
(139,152) $
179,599 $
(60,259) $

(63,615 ) $
(120,736 ) $
248,511 $
64,160 $

(49,225)
(67,802)
317
(116,710)

2014

Year Ended December 31,
2013
(in thousands)

2012

Cash used in operating activities

Cash used in operating activities was $100.9 million for the year ended December 31, 2014 reflecting a net loss of $137.1 million,
which was decreased by non-cash charges of $9.3 million for stock-based compensation, $3.7 million for amortization of premium on
investments and $1.5 million for depreciation and amortization. Cash used in operating activities also reflected an increase in net
operating assets of $21.7 million primarily due to increases in accounts payable and accrued and other liabilities of $6.7 million
related to higher clinical study and related costs as we continue to increase our research and development activities, an increase in
deferred revenue of $31.4 million due to an increase in deferred revenue of $13.0 million related to the upfront payments received
from Bayer and Janssen, $15.0 million related to the upfront payments received from Daiichi Sankyo and $13.0 million related to the
upfront payments received from BMS and Pfizer in the year ended December 31, 2014, partially offset by the recognition of
collaboration revenue earned of $9.6 million from our collaboration agreements and an increase in accrued compensation and
employee benefits of $1.1 million related to our increased headcount. Cash used in operating activities also reflected an increase in
prepaid expenses and other current assets of $2.1 million and an increase of prepaid and other long-term assets of $15.6 million related
to our upfront payment to CMC Biologics of $14.6 million pursuant to our commercial supply agreements with CMC Biologics. Also
reflected in cash used in operating activities is a decrease in receivables from collaborations of $0.3 million due to the receipt of
research and development expenses reimbursable from Biogen Idec pursuant to our agreement with Biogen Idec.

Cash used in operating activities was $63.6 million for the year ended December 31, 2013 reflecting a net loss of $83.4 million, which
was decreased by non-cash charges of $5.0 million for stock-based compensation, $2.3 million for amortization of premium on
investments and $1.4 million for depreciation and amortization. Cash used in operating activities also reflected an increase in net
operating assets of $11.1 million primarily due to increases in accounts payable and accrued and other liabilities of $10.1 million
related to higher clinical study and related costs as we continue to increase our research and development activities, an increase in
deferred revenue of $1.2 million due to an increase in deferred revenue of $5.0 million related to the upfront payments received from
Bayer and Janssen, $6.0 million related to the upfront payments received from Daiichi Sankyo and $0.7 million related to the upfront
payments received from Lee’s in the year ended December 31, 2013, partially offset by the recognition of collaboration revenue
earned of $10.5 million from our collaboration agreements and an increase in accrued compensation and employee benefits of $0.7
million to support our increased headcount. Cash used in operating activities also reflected an increase in prepaid expenses and other
current assets of $0.7 million primarily reflecting higher interest receivable on our investment portfolio of $0.4 million, unrealized
gains on our foreign currency forward contracts of $0.4 million, other receivables of $0.4 million related to our agreements with
Myokardia and Global Blood Therapeutics, prepaid premiums for corporate director’s and officer’s insurance of $0.1 million
following the renewal of our corporate insurance program and placement of our public company policies, and prepaid rent of $0.2
million in 2013 partially offset by recognition of clinical trial upfront fees upon contract execution of $0.7 million. Also reflected in
cash used in operating activities is a decrease in other assets following payment and classification of deferred offering costs of $1.6
million and a decrease in receivables from collaborations of $0.4 million due to the receipt of research and development expenses
reimbursable from Biogen Idec pursuant to our agreement with Biogen Idec.

Cash used in operating activities was $49.2 million for the year ended December 31, 2012 reflecting net income of $11.4 million,
which was increased by non-cash charges of $1.4 million for depreciation and amortization, $1.5 million for amortization of premium
on investments, $2.8 million for stock-based compensation and $0.1 million for unrealized gains related to foreign currency forward
contracts. Cash used in operating activities also reflected a decrease in net operating assets of $66.1 million primarily due to the
recognition of all remaining deferred revenue of $65.1 million related to the upfront payments received from Novartis in prior periods
following the termination of our agreement with Novartis effective July 1, 2012 and the recognition of collaboration revenue earned of
$6.9 million; an increase in prepaid expenses and other current assets of $2.5 million primarily for clinical study costs paid in advance
to our CRO and prepaid clinical study insurance; and an increase in other assets of $2.1 million related to deferred offering costs and
legal fees related to our IPO. Also reflected in cash used in operating activities is a decrease in accrued compensation and employee
benefits of $1.0 million due to 2011 bonuses that were paid in the first quarter of 2012 and a decrease in receivables from
collaboration agreements of $0.3 million due to increased research and development expenses reimbursable from Biogen Idec
pursuant to our agreements with Biogen Idec, MyoKardia, Inc. and Global Blood Therapeutics, Inc., and increases in accounts payable
and accrued and other liabilities of $5.4 million related to higher clinical study and related costs as we continue to increase our
research and development activities.

Cash used in investing activities

Cash used in investing activities of $139.2 million for the year ended December 31, 2014 was primarily related to purchases of
investments of $332.2 million and capital equipment purchases of $1.6 million, partially offset by proceeds from sales of investments
of $2.6 million and proceeds from maturities of investments of $192.0 million.

Cash used in investing activities of $120.7 million for the year ended December 31, 2013 was primarily related to purchases of
investments of $219.8 million and capital equipment purchases of $0.9 million, partially offset by proceeds from sales of investments
of $8.0 million and proceeds from maturities of investments of $92.0 million.

Cash used in investing activities of $67.8 million for the year ended December 31, 2012 was primarily related to purchases of
investments of $144.6 million and capital equipment purchases of $0.4 million, partially offset by proceeds from sales of investments
of $36.5 million and proceeds from maturities of investments of $40.7 million.

Cash provided by financing activities

Cash provided by financing activities of $179.6 million for the year ended December 31, 2014, was primarily related to proceeds from
our public offering, net of underwriting discounts and commissions, of $175.2 million, partially offset by payments of offering costs
of $0.6 million, and proceeds from the exercise of stock options of $5.0 million.

Cash provided by financing activities of $248.5 million for the year ended December 31, 2013, was primarily related to proceeds from
our IPO, net of underwriting discounts and commissions, of $131.0 million, partially offset by payments of deferred offering costs of
$5.0 million and proceeds from our follow-on public offering, net of underwriting discounts and commissions, of $120.8 million,
partially offset by payments of deferred offering costs of $0.9 million, and proceeds from the exercise of stock options of $2.5 million.

Cash provided by financing activities of $0.3 million for the year ended December 31, 2012, was related to proceeds from the exercise
of stock options.

We believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating
requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could
utilize our available capital resources sooner than we currently expect. Further, our operating plan may change, and we may need
additional funds to meet operational needs and capital requirements for product development and commercialization sooner than
planned. We currently have no credit facility or committed sources of capital other than potential milestones receivable under our
current collaboration. Because of the numerous risks and uncertainties associated with the development and commercialization of our
product candidates and the extent to which we may enter into additional collaborations with third parties to participate in their
development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures
associated with our current and anticipated clinical studies. Our future funding requirements will depend on many factors, including
the following:

(cid:121)

the scope, rate of progress, results and cost of our clinical studies, preclinical testing and other related activities;

the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any
products that we may develop, including process improvements in order to manufacture Andexanet alfa at commercial
scale;

the receipt of any collaboration payments;

the number and characteristics of product candidates that we pursue;

the cost, timing and outcomes of regulatory approvals;

the cost and timing of establishing sales, marketing and distribution capabilities;

the terms and timing of any other collaborative, licensing and other arrangements that we may establish;

the timing, receipt and amount of sales, profit sharing or royalties, if any, from our potential products;

the cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
and

the extent to which we acquire or invest in businesses, products or technologies, although we currently have no
commitments or agreements relating to any of these types of transactions.

If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all. If we are
unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our clinical
studies, research and development programs or commercialization efforts. We may seek to raise any necessary additional capital
through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements
and other marketing and distribution arrangements. To the extent that we raise additional capital through marketing and distribution
arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish
valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on
terms that may not be favorable to us. If we do raise additional capital through public or private equity offerings, the ownership
interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that
adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting
or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Off-balance sheet arrangements and contractual obligations

On July 1, 2014, we entered into a commercial supply agreement with CMC Biologics, pursuant to which CMC Biologics will
manufacture clinical and commercial supply of Andexanet alfa and perform pre-validation and validation work on our behalf. Total
fixed commitments under the agreement for the purchases of clinical and commercial batches, not taking into account possible price
and batch adjustments, are $293.9 million over the life of the agreement from 2015 through 2021.

Under the consolidation accounting guidance, we determined that CMC Biologics is a VIE but that Portola is not CMC Biologics’
primary beneficiary and therefore consolidation of CMC Biologics by us is not required. We based this determination on, among other
factors, the upfront and reservation payment being akin to a form of subordinated financing, the fixed pricing terms of the arrangement
creating variability that is absorbed by the Company, and that we do not have the power to direct the activities that most significantly
affect the economic performance of CMC Biologics.

As of December 31, 2014, we have not provided financial, or other, support to CMC Biologics that was not previously contractually
required. Other than the reservation payment we are not required to make any additional payments to CMC Biologics. The upfront fee
of $10.0 million recorded in prepaid and other long-term assets in the consolidated balance sheet represents our maximum exposure to
loss under this agreement at December 31, 2014. The upfront payment will be charged to research and development expense, or cost
of sales upon regulatory approval of Andexanet alfa, as batches are delivered over the term of the agreement. We are currently not
able to quantify the exposure to losses associated with the fixed pricing terms of this agreement.

We may terminate the agreement unilaterally if we discontinue the development and commercialization of Andexanet alfa for
regulatory, safety, efficacy or other commercial reasons, or if the projected market demand or gross margin of Andexanet alfa is below
a minimum threshold, in which case we will be obligated to pay CMC Biologics a termination payment ranging from between $5.0
million and $30.0 million, depending on the time of termination.

The following table summarizes our future contractual obligations, including fixed commitments for the purchase of clinical and
commercial batches under the CMC Biologics commercial supply agreement, as of December 31, 2014:

Less than 1 year

1 to 3
years

3 to 5
years

More than 5
years

Total

Payments due by period

(in thousands)

Contractual Obligations:
Batch Purchase Commitments .................. $
Purchase commitments .............................
Operating lease obligations .......................
Total Contractual obligations ................... $

15,178 $
12,545
1,769
29,491 $

154,960 $
2,583
4,204
161,747 $

88,660 $
–
4,467
93,127 $

32,500 $

–
571
33,071 $

291,298
15,128
11,011
317,436

Pursuant to our asset purchase agreement with Millennium Pharmaceuticals, Inc., or Millennium, we are obligated to pay to
Millennium royalties on sales of certain products if product sales are ever achieved, which royalty payments will continue until the
expiration of the relevant patents or 10 years after the launch, whichever is later. Pursuant to the license agreement between
Millennium and us, we are required to make certain license fee, milestone, royalty and sublicense sharing payments to Millennium as
we develop, commercialize or sublicense Betrixaban and other products from certain Factor Xa programs as described in the
agreement. The Millennium license agreement further provides for additional payments to Millennium of up to $35.0 million based on
the achievement of certain milestones related to Betrixaban and the Factor Xa programs. See the section of this report entitled
“Business—Collaboration and license agreements—Millennium agreements” for a more detailed description of these agreements.

We have also entered into an agreement pursuant to which a contract manufacturer, Lonza Group Ltd., will fully develop a
commercial scale manufacturing process for Andexanet alfa and produce approval-enabling validation lots. The agreement includes
purchase commitments aggregating approximately $42.1 million over several years of which $15.1 million is non-cancellable and
included in the contractual obligations table above as a purchase commitment.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our investment activities is to preserve our capital to fund our operations. We also seek to maximize income
from our investments without assuming significant risk. To achieve our objectives, we maintain a portfolio of cash equivalents and
investments in a variety of securities of high credit quality. As of December 31, 2014, we had cash, cash equivalents and investments
of $392.3 million consisting of cash and liquid investments deposited in highly rated financial institutions in the United States. A
portion of our investments may be subject to interest rate risk and could fall in value if market interest rates increase. However,
because our investments are primarily short-term in duration, we believe that our exposure to interest rate risk is not significant and a
1% movement in market interest rates would not have a significant impact on the total value of our portfolio. We actively monitor
changes in interest rates.

We contract for the conduct of certain clinical development and manufacturing activities with vendors in Europe. Beginning in 2012,
we have utilized foreign currency forward contracts to mitigate our exposure to foreign currency gains and losses. The balance of
forward contracts was zero at December 31, 2014. We made payments in the aggregate amount of €25.6 million to our European
vendors during the year ended December 31, 2014. We are subject to exposure due to fluctuations in foreign exchange rates in
connection with our cash balance denominated in Euros. We may continue to hedge our foreign currency exposures but we have not
and do not plan to use derivative financial instruments for speculation or trading purposes.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements and related disclosures included in Part IV, Item 15 of this annual report are incorporated by
reference into this Item 8.

PORTOLA PHARMACEUTICALS, INC.

INDEX TO FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm ....................................................................................................
Consolidated Financial Statements

Consolidated Balance Sheets ......................................................................................................................................
Consolidated Statements of Operations ......................................................................................................................
Consolidated Statements of Comprehensive Income (Loss).......................................................................................
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) ...................................
Consolidated Statements of Cash Flows .....................................................................................................................
Notes to Consolidated Financial Statements ...............................................................................................................

82
83
84
85
86
87

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Portola Pharmaceuticals, Inc.

We have audited the accompanying consolidated balance sheets of Portola Pharmaceuticals, Inc. (the “Company”) as of December 31,
2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), convertible preferred stock and
stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2014. These financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Portola Pharmaceuticals, Inc. at December 31, 2014 and 2013, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting
principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Portola
Pharmaceuticals, Inc.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)
and our report dated March 2, 2015 expressed an unqualified opinion hereon.

/s/ Ernst & Young LLP
Redwood City, California
March 2, 2015

PORTOLA PHARMACEUTICALS, INC.

Consolidated Balance Sheets
(In thousands, except share and per share data)

December 31,

2014

2013

Assets
Current assets:

Cash and cash equivalents .......................................................................................................................... $
Short-term investments ...............................................................................................................................
Receivables from collaborations .................................................................................................................
Prepaid expenses and other current assets ..................................................................................................
Total current assets ............................................................................................................................
Property and equipment, net ................................................................................................................................
Long-term investments ........................................................................................................................................
Prepaid and other long-term assets ......................................................................................................................

Total assets ........................................................................................................................................ $

57,514 $
251,759
57
5,747
315,077
2,776
83,030
15,612
416,495 $

Liabilities and stockholders’ equity
Current liabilities:

Accounts payable ........................................................................................................................................ $
Accrued compensation and employee benefits ...........................................................................................
Accrued and other liabilities .......................................................................................................................
Deferred revenue, current portion ...............................................................................................................
Total current liabilities .......................................................................................................................
Deferred revenue, long-term ................................................................................................................................
Other long-term liabilities ....................................................................................................................................
Total liabilities ...................................................................................................................................

14,084 $
3,512
13,966
9,569
41,131
27,016
546
68,693

Stockholders’ equity:

117,773
150,892
309
3,733
272,707
2,600
50,371
53
325,731

3,232
2,569
17,796
1,958
25,555
3,253
588
29,396

Preferred stock, $0.001 par value, 5,000,000 shares authorized at December 31, 2014 and 2013;

no shares issued and outstanding at December 31, 2014 and 2013; .........................................................

–

Common stock, $0.001 par value, 100,000,000 shares authorized at December 31, 2014 and 2013;

48,766,806 shares and 40,915,130 shares issued and outstanding at
December 31, 2014 and 2013, respectively .............................................................................................
Additional paid-in capital ...........................................................................................................................
Accumulated deficit ....................................................................................................................................
Accumulated other comprehensive (loss) income .......................................................................................
Total stockholders’ equity .................................................................................................................
Total liabilities and stockholders’ equity ........................................................................................... $

49
770,789
(422,797)
(239)
347,802
416,495 $

41
581,911
(285,672)
55
296,335
325,731

See accompanying notes

PORTOLA PHARMACEUTICALS, INC.

Consolidated Statements of Operations
(In thousands, except share and per share data)

Collaboration and license revenue ......................................................................................... $
Operating expenses:

Research and development ...........................................................................................
General and administrative ...........................................................................................
Total operating expenses .....................................................................................
(Loss) income from operations ..............................................................................................
Interest and other income, net ................................................................................................
Net (loss) income ................................................................................................................... $
Net (loss) income attributable to common stockholders:

Year Ended December 31,
2013

2014

2012

9,625 $

10,531 $

72,042

123,639
23,552
147,191
(137,566 )
441
(137,125 ) $

79,286
15,423
94,709
(84,178)
826
(83,352) $

49,717
11,469
61,186
10,856
510
11,366

Basic ............................................................................................................................. $
Diluted ........................................................................................................................... $

(137,125 ) $
(137,125 ) $

(83,352) $
(83,352) $

Net (loss) income per share attributable to common stockholders:

Basic .............................................................................................................................. $
Diluted ........................................................................................................................... $

(3.19 ) $
(3.19 ) $

(3.65) $
(3.65) $

–
–

Shares used to compute net (loss) income per share attributable to
common stockholders:

Basic ..............................................................................................................................
Diluted ............................................................................................................................

42,977,463
42,977,463

22,842,443
22,842,443

1,350,939
2,048,867

See accompanying notes

PORTOLA PHARMACEUTICALS, INC.

Consolidated Statements of Comprehensive Income (Loss)
(In thousands)

Year Ended December 31,
2013

(83,352)

2014
(137,125 )

(294 )
(137,419 )

22
(83,330)

2012

11,366

34
11,400

Net (loss) income .................................................................................................................. $
Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale securities, net of tax ................................

Total comprehensive income (loss) ...................................................................................... $

See accompanying notes

y
t
i
u
q
E

)
t
i
c
i
f
e
D

(

)
s
s
o
L

(

e
m
o
c
n
I

t
i
c
i
f
e
D

l
a
t
i
p
a
C

t
n
u
o
m
A

s
e
r
a
h
S

t
n
u
o
m
A

s
e
r
a
h
S

l
a
t
o
T

d
e
t
a
l
u
m
u
c
c
A

r
e
h
t
O

’
s
r
e
d
l
o
h
k
c
o
t
S

e
v
i
s
n
e
h
e
r
p
m
o
C

d
e
t
a
l
u
m
u
c
c
A

l
a
n
o
i
t
i
d
d
A

n
I
-
d
i
a
P

k
c
o
t
S
n
o
m
m
o
C

k
c
o
t
S
d
e
r
r
e
f
e
r
P
e
l
b
i
t
r
e
v
n
o
C

C
N
I

S
L
A
C
I
T
U
E
C
A
M
R
A
H
P
A
L
O
T
R
O
P

)
t
i
c
i
f
e
D

(
y
t
i
u
q
E

’
s
r
e
d
l
o
h
k
c
o
t
S
d
n
a
k
c
o
t
S
d
e
r
r
e
f
e
r
P
e
l
b
i
t
r
e
v
n
o
C

f
o
s
t
n
e
m
e
t
a
t
S
d
e
t
a
d
i
l
o
s
n
o
C

)
a
t
a
d
e
r
a
h
s

r
e
p
d
n
a
e
r
a
h
s

t
p
e
c
x
e

,
s
d
n
a
s
u
o
h
t
n
I
(

9
8
7
,
0
7
7

9
4

6
0
8
,
6
6
7
,
8
4

s
e
t
o
n
g
n
i
y
n
a
p
m
o
c
c
a

e
e
S

5
8

7
1
3

)
5
0
1
,
6
0
2
(

0
1

5
6
6
,
2

4
3

4
4
1

9
2
5
,
2

6
6
3
,
1
1

)
9
6
5
,
1
9
1
(

9
5
6

0
8
2
,
7
1
3

2
7
8
,
5
2
1

0
4
1
,
4

5
7
9
,
9
1
1

2
2

5
7
7

)
2
5
3
,
3
8
(

5
3
3
,
6
9
2

9
9
3
,
4

–

9
7
5

4
1
5
,
8

1
2
6
,
4
7
1

9
6
7

)
4
9
2
(

)
5
2
1
,
7
3
1
(

2
0
8
,
7
4
3

)
1
(

–

4
3

3
3

–

2
2

5
5

–

)
9
3
2
(

–

)
4
9
2
(

–

)
6
8
6
,
3
1
2
(

6
6
3
,
1
1

)
0
2
3
,
2
0
2
(

–

)
2
5
3
,
3
8
(

)
2
7
6
,
5
8
2
(

)
5
2
1
,
7
3
1
(

)
7
9
7
,
2
2
4
(

7
1
3

1
8
5
,
7

0
1

5
6
6
,
2

–

4
4
1

9
2
5
,
2

7
1
7
,
0
1

9
5
6

6
5
2
,
7
1
3

1
6
8
,
5
2
1

0
4
1
,
4

0
7
9
,
9
1
1

–

5
7
7

8
9
3
,
4

1
1
9
,
1
8
5

–

9
7
5

–

9
6
7

4
1
5
,
8

4
1
6
,
4
7
1

–

4
2

1
1

–

1
4

–

9
5
3
,
1

7
1
4
,
4
0
1

2
3
7
,
9
7
2
,
1

–

0
0
5

8
6
4
,
3
0
4

8
0
5
,
5
8
3
,
1

–

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
h
s
a
c

r
o
f

s
n
o
i
t
p
o
k
c
o
t
s

e
e
y
o
l
p
m
e

f
o
e
s
i
c
r
e
x
E

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
e
s
i
c
r
e
x
e

y
l
r
a
e
o
t

t
n
a
u
s
r
u
p

d
e
u
s
s
i

s
e
r
a
h
s

n
o
m
m
o
c

o
t

d
e
t
a
l
e
r

s
t
h
g
i
r

e
s
a
h
c
r
u
p
e
r

f
o

e
s
p
a
L

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
e
s
n
e
p
x
e
n
o
i
t
a
s
n
e
p
m
o
c
d
e
s
a
b
-
k
c
o
t
s

e
e
y
o
l
p
m
E

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
t
n
a
t
l
u
s
n
o
c

o
t
d
e
t
n
a
r
g

s
n
o
i
t
p
o

k
c
o
t
s
o
t
g
n
i
t
a
l
e
r

e
s
n
e
p
x
e
n
o
i
t
a
s
n
e
p
m
o
C

.
.
.
.
.
.
.
.
.
.
x
a
t

f
o
t
e
n
,
s
e
i
t
i
r
u
c
e
s

e
l
a
s
-
r
o
f
-
e
l
b
a
l
i
a
v
a

n
o

n
i
a
g
d
e
z
i
l
a
e
r
n
U

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

e
m
o
c
n
i

t
e
N

0
8
2
,
7
1
3

7
9
7
,
6
2
0
,
4
2

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
1
1
0
2
,
1
3
r
e
b
m
e
c
e
D

t
a

e
c
n
a
l
a
B

–

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
h
s
a
c

r
o
f

s
n
o
i
t
p
o
k
c
o
t
s

e
e
y
o
l
p
m
e

f
o
e
s
i
c
r
e
x
E

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
e
s
i
c
r
e
x
e

y
l
r
a
e
o
t

t
n
a
u
s
r
u
p

d
e
u
s
s
i

s
e
r
a
h
s

n
o
m
m
o
c

o
t

d
e
t
a
l
e
r

s
t
h
g
i
r

e
s
a
h
c
r
u
p
e
r

f
o

e
s
p
a
L

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

s
t
n
a
r
r
a
w

k
c
o
t
s

n
o
m
m
o
c

o
t

s
t
n
a
r
r
a
w
k
c
o
t
s

d
e
r
r
e
f
e
r
p

f
o

n
o
i
s
r
e
v
n
o
C

0
8
2
,
7
1
3

7
9
7
,
6
2
0
,
4
2

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2
1
0
2
,
1
3
r
e
b
m
e
c
e
D

t
a

e
c
n
a
l
a
B

7
9
7
,
6
2
0
,
4
2

)
0
8
2
,
7
1
3
(

)
7
9
7
,
6
2
0
,
4
2
(

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
k
c
o
t
s

n
o
m
m
o
c

o
t

k
c
o
t
s

d
e
r
r
e
f
e
r
p

f
o

n
o
i
s
r
e
v
n
o
C

–

1
7
1
,
6
8
6
,
9

6
8
6
,
2
1
4
,
5

5
2
1
,
2
5
6

0
3
1
,
5
1
9
,
0
4

0
0
5

4
1
3
,
0
4

7
3
7
,
8
2

0
0
0
,
0
3
1
,
7

–

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

s
t
s
o
c

e
c
n
a
u
s
s
i

c
i
l
b
u
p
l
a
i
t
i
n
i
h
t
i

w
n
o
i
t
c
e
n
n
o
c
n
i
k
c
o
t
s
n
o
m
m
o
c

f
o
e
c
n
a
u
s
s
I

d
n
a

s
n
o
i
s
s
i
m
m
o
c

,
s
t
n
u
o
c
s
i
d

g
n
i
t
i
r

w
r
e
d
n
u

f
o

t
e
n
,
g
n
i
r
e
f
f
o

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

s
t
s
o
c

e
c
n
a
u
s
s
i

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
e
s
n
e
p
x
e
n
o
i
t
a
s
n
e
p
m
o
c
d
e
s
a
b
-
k
c
o
t
s

e
e
y
o
l
p
m
E

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
t
n
a
t
l
u
s
n
o
c

o
t
d
e
t
n
a
r
g

s
n
o
i
t
p
o

k
c
o
t
s
o
t
g
n
i
t
a
l
e
r

e
s
n
e
p
x
e
n
o
i
t
a
s
n
e
p
m
o
C

.
.
.
.
.
.
.
.
.
.
x
a
t

f
o
t
e
n
,
s
e
i
t
i
r
u
c
e
s

e
l
a
s
-
r
o
f
-
e
l
b
a
l
i
a
v
a

n
o

n
i
a
g
d
e
z
i
l
a
e
r
n
U

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
s
o
l

t
e
N

d
n
a

s
n
o
i
s
s
i
m
m
o
c

,
s
t
n
u
o
c
s
i
d

g
n
i
t
i
r

w
r
e
d
n
u

f
o

t
e
n
,
g
n
i
r
e
f
f
o

n
o
-
w
o
l
l
o
f

h
t
i

w
n
o
i
t
c
e
n
n
o
c

n
i

k
c
o
t
s

n
o
m
m
o
c

f
o

e
c
n
a
u
s
s
I

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
3
1
0
2

,
1
3
r
e
b
m
e
c
e
D

t
a

e
c
n
a
l
a
B

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
h
s
a
c

r
o
f

s
n
o
i
t
p
o
k
c
o
t
s

e
e
y
o
l
p
m
e

f
o
e
s
i
c
r
e
x
E

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
e
s
i
c
r
e
x
e

y
l
r
a
e
o
t

t
n
a
u
s
r
u
p

d
e
u
s
s
i

s
e
r
a
h
s

n
o
m
m
o
c

o
t

d
e
t
a
l
e
r

s
t
h
g
i
r

e
s
a
h
c
r
u
p
e
r

f
o

e
s
p
a
L

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
t
n
a
r
r
a
w
k
c
o
t
s

n
o
m
m
o
c

f
o
e
s
i
c
r
e
x
e

s
s
e
l
h
s
a
c
n
o
p
u
k
c
o
t
s
n
o
m
m
o
c

f
o
e
c
n
a
u
s
s
I

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
e
s
a
h
c
r
u
p
P
P
S
E
o
t

t
n
a
u
s
r
u
p

,
g
n
i
r
e
f
f
o

c
i
l
b
u
p

h
t
i

w
n
o
i
t
c
e
n
n
o
c

n
i

k
c
o
t
s

n
o
m
m
o
c

f
o

e
c
n
a
u
s
s
I

.
.
s
t
s
o
c

e
c
n
a
u
s
s
i
d
n
a

s
n
o
i
s
s
i
m
m
o
c

,
s
t
n
u
o
c
s
i
d

g
n
i
t
i
r

w
r
e
d
n
u
f
o
t
e
n

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
e
s
n
e
p
x
e
n
o
i
t
a
s
n
e
p
m
o
c
d
e
s
a
b
-
k
c
o
t
s

e
e
y
o
l
p
m
E

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
t
n
a
t
l
u
s
n
o
c

.
.
.
.
.
.
.
.
.
.
x
a
t

f
o
t
e
n
,
s
e
i
t
i
r
u
c
e
s

e
l
a
s
-
r
o
f
-
e
l
b
a
l
i
a
v
a
n
o
s
s
o
l
d
e
z
i
l
a
e
r
n
U

o
t
d
e
t
n
a
r
g

s
n
o
i
t
p
o

k
c
o
t
s
o
t
g
n
i
t
a
l
e
r

e
s
n
e
p
x
e
n
o
i
t
a
s
n
e
p
m
o
C

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
s
o
l

t
e
N

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
4
1
0
2

,
1
3
r
e
b
m
e
c
e
D

t
a

e
c
n
a
l
a
B

PORTOLA PHARMACEUTICALS, INC.

Consolidated Statements of Cash Flows
(In thousands)

Operating activities
Net income (loss) ...................................................................................................... $
Adjustments to reconcile net income (loss) to cash used in operating activities:

Depreciation and amortization ..........................................................................
Amortization of premium on investment securities ..........................................
Stock-based compensation expense ..................................................................
Revaluation of convertible preferred stock warrant liability .............................
Unrealized (gain) loss on foreign currency forward contracts ..........................
Changes in operating assets and liabilities:

Receivables from collaborations ...............................................................
Prepaid expenses and other current assets ................................................
Prepaid and other long-term assets ...........................................................
Accounts payable ......................................................................................
Accrued compensation and employee benefits .........................................
Accrued and other liabilities .....................................................................
Deferred revenue ......................................................................................
Other long-term liabilities .........................................................................
Net cash used in operating activities .........................................................................

Investing activities
Purchases of property and equipment .......................................................................
Purchases of investments ..........................................................................................
Proceeds from sales of investments ..........................................................................
Proceeds from maturities of investments ..................................................................
Net cash used in investing activities .........................................................................

2014

Year Ended December 31,
2013

2012

(137,125 )

(83,352)

11,366

1,542
3,703
9,333
–
114

252
(2,128 )
(15,559 )
10,763
893
(3,826 )
31,374
(42 )
(100,706 )

(1,629 )
(332,171 )
2,603
192,045
(139,152 )

1,359
2,333
4,974
(24)
(261)

353
(469)
396
(1,773)
650
11,908
1,169
(878)
(63,615)

1,389
1,469
2,809
(83)
(51)

293
(2,481)
(2,091)
2,017
(980)
3,375
(65,426)
(831)
(49,225)

(933)
(219,813)
8,009
92,001
(120,736)

(362)
(144,644)
36,517
40,687
(67,802)

Financing activities
Proceeds from public offering of common stock, net of underwriters discount........
Payment of public offering costs ...............................................................................
Proceeds from issuance of common stock, including early exercise of stock

options ..................................................................................................................
Net cash provided by financing activities .................................................................

175,185
(564 )

251,865
(5,883)

4,978

2,529

179,599

248,511

–
–

317

Net increase (decrease) in cash and cash equivalents ...............................................
Cash and cash equivalents at beginning of year ........................................................
Cash and cash equivalents at end of year ..................................................................

(60,259 )
117,773
57,514

64,160
53,613
117,773

(116,710)
170,323
53,613

Supplemental disclosure of cash flow information
Income taxes paid...................................................................................................... $

–

Noncash investing and financing activities:
Net change in accrued compensation and employee benefits related to ESPP ......... $
Net change in accounts payable related to purchase of property and equipment ...... $

(51 )
89

$
$

–
165

$
$

–
–

See accompanying notes

PORTOLA PHARMACEUTICALS, INC.
Notes to Consolidated Financial Statements

1. Organization

Portola Pharmaceuticals, Inc. (the “Company” or “we” or “our” or “us”) is a biopharmaceutical company focused on the development
and commercialization of novel therapeutics in the areas of thrombosis, other hematologic disorders and inflammation for patients
who currently have limited or no approved treatment options. We were incorporated in September 2003 in Delaware. Our
headquarters and operations are located in South San Francisco, California and we operate in one segment.

Our two lead programs address the area of thrombosis, or blood clots. Our lead compound Betrixaban is a novel oral once-daily
inhibitor of Factor Xa in Phase 3 development for extended duration prophylaxis, or preventive treatment, of a form of thrombosis
known as venous thromboembolism, in acute medically ill patients. Our second lead development candidate Andexanet alfa, formerly
PRT4445, is a recombinant protein designed to reverse the anticoagulant activity in patients treated with a Factor Xa inhibitor who
suffer an uncontrolled bleeding episode or undergo emergency surgery. Our third product candidate, Cerdulatinib, formerly PRT2070,
is an orally available kinase inhibitor being developed for hematologic, or blood, cancers and inflammatory disorders. Our fourth
program, PRT2607 and other selective Syk inhibitors is being developed in partnership with Biogen Idec Inc.

Initial Public and Other Offerings

In May 2013, we closed our initial public offering (“IPO”) of 9,686,171 shares of our common stock, which included 1,263,413 shares
of common stock issued pursuant to the over-allotment option granted to our underwriters. The public offering price of the shares sold
in the offering was $14.50 per share. The total proceeds from the offering to us, net of underwriting discounts and commissions of
approximately $9.4 million, were approximately $131.0 million. After deducting offering expenses payable by us of approximately
$5.2 million, net proceeds to us were $125.8 million. Upon the closing of the IPO, all shares of convertible preferred stock then
outstanding converted into 24,026,797 shares of common stock. In addition, all of our convertible preferred stock warrants were
converted into warrants to purchase common stock.

In October 2013, we completed a follow-on offering of 6,366,513 shares of our common stock, which included 1,908,803 shares of
common stock sold by certain existing stockholders, at a public offering price of $23.75 per share. In November 2013, the
underwriters exercised their over-allotment option to purchase an additional 954,976 shares from us at the public offering price. The
total proceeds from the offering and over-allotment option, net of underwriting discounts and commissions of approximately $7.7
million, were approximately $120.8 million. After deducting offering expenses of approximately $862,000, net proceeds to us were
$119.9 million.

In October 2014, we completed an underwritten public offering of 6,200,000 shares of our common stock at a public offering price of
$26.00 per share. In addition, the underwriters exercised their over-allotment option to purchase an additional 930,000 shares from us
at the public offering price of $26.00. The net proceeds from the offering to us including the over-allotment option, net of
underwriting discounts and commissions of approximately $10.2 million were approximately $175.2 million. After deducting offering
expenses of approximately $564,000, net proceeds to us were $174.6 million.

2. Summary of Significant Accounting Policies

Basis of Consolidation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United
States (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of Portola and its wholly owned
subsidiary as of December 31, 2014. Unless otherwise specified, references to the Company are references to Portola and its
consolidated subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues
and expenses in the financial statements and the accompanying notes. On an ongoing basis, management evaluates its estimates,
including those related to revenue recognition, clinical trial accruals, fair value of assets and liabilities, income taxes and stock-based
compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions
that management believes to be reasonable under the circumstances. Actual results may differ from those estimates.

Variable Interest Entities

We review agreements we enter into with third party entities, pursuant to which we may have a variable interest in the entity, in order
to determine if the entity is a variable interest entity (VIE). If the entity is a VIE, we assess whether or not we are the primary
beneficiary of that entity. In determining whether we are the primary beneficiary of an entity, we apply a qualitative approach that
determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to
absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. If we determine we
are the primary beneficiary of a VIE, we consolidate the statements of operations and financial condition of the VIE into our
consolidated financial statements. Our determination about whether we should consolidate such VIEs is made continuously as changes
to existing relationships or future transactions may result in a consolidation or deconsolidation event.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and other highly liquid investments with original maturities of three months or less from the
date of purchase.

Investments

All investments have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted
market prices or pricing models for similar securities. Management determines the appropriate classification of our investments in
debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Unrealized gains and losses are
excluded from earnings and were reported as a component of accumulated comprehensive income (loss). Realized gains and losses
and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other
income, net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in
interest and other income, net.

Fair Value Measurements

Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at least annually).

Concentration of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, receivables from
collaborations and investments. Our investment policy limits investments to certain types of debt securities issued by the U.S.
government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration
by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash
equivalents and investments and issuers of investments to the extent recorded on the consolidated balance sheets.

Receivables from collaborations are typically unsecured and are concentrated in the pharmaceutical industry. Accordingly, we may be
exposed to credit risk generally associated with pharmaceutical companies or specific to our collaboration agreements. To date, we
have not experienced any losses related to these receivables.

Certain materials and key components that we utilize in our operations are obtained through single suppliers. Since the suppliers of
key components and materials must be named in a new drug application (NDA) filed with the U.S. Food and Drug Administration
(FDA) for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from our
suppliers were interrupted for any reason, we may be unable to supply any of our product candidates for clinical trials.

Customer Concentration

Customers that accounted for 10% or more of total revenues were as follows:

Bristol-Myers Squibb Company and Pfizer Inc. ...............................................
Bayer Pharma, AG and Janssen Pharmaceuticals, Inc. .....................................
Daiichi Sankyo, Inc ...........................................................................................
Novartis, AG .....................................................................................................

2014
16%
37%
45%
–

Year Ended December 31,
2013
38%
37%
23%
–

2012
–
–
–
97%

Property and Equipment

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets,
ranging from two to five years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related
lease term.

Impairment of Long-Lived Assets

We review long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances
indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated
undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying
amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value. Through
December 31, 2014, there have been no such losses.

Deferred Rent

We recognize rent expense on a straight-line basis over the noncancelable term of our operating lease and, accordingly, record the
difference between cash rent payments and the recognition of rent expense as a deferred rent liability. We also record lessor-funded
lease incentives, such as reimbursable leasehold improvements, as a deferred rent liability, which is amortized as a reduction of rent
expense over the noncancelable term of our operating lease.

Revenue Recognition

Research and Development

Clinical Trial Accruals

Clinical trial costs are a component of research and development expenses. We accrue and expense clinical trial activities performed
by third parties based upon actual work completed in accordance with agreements established with clinical research organizations and
clinical sites. We determine the actual costs through monitoring patient enrollment and discussions with internal personnel and
external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such
services. The Company has not experienced any material deviations between the accrued clinical trial expenses and actual clinical trial
expenses. However, actual services performed, number of patients enrolled and the rate of patient enrollment may vary from our
estimates, resulting in adjustments to clinical trial expense in futures periods.

Stock-Based Compensation

Stock-based awards issued to employees, are recorded at fair value as of the grant date using the Black-Scholes option-pricing model
and recognized as expense on a straight-line basis over the vesting period of the award. Because noncash stock compensation expense
is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. Forfeitures are estimated at the time
of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates.

Equity instruments issued to nonemployees, consisting of stock options granted to consultants, are valued using the Black-Scholes
option-pricing model. Stock-based compensation expense for nonemployee services is subject to remeasurement as the underlying
equity instruments vest and is recognized as an expense over the period during which services are received.

Income Taxes

We provide for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of
income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based
on differences between the consolidated financial statement reporting and tax bases of assets and liabilities and net operating loss and
credit carryforwards, and are measured using the enacted tax rates and laws that will be in effect when such items are expected to
reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely
than not that some or all of the tax benefits will not be realized. The recognition, derecognition and measurement of a tax position is
based on management’s best judgment given the facts, circumstances and information available at the reporting date. Our policy is to
recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To
date, there have been no interest or penalties charged in relation to the underpayment of income taxes.

Foreign Currency Transactions and Hedging

We have transactions denominated in foreign currencies, primarily the Euro, and, as a result, are exposed to changes in foreign
currency exchange rates. We manage a portion of these cash flow exposures through the purchase of Euros and the use of foreign
currency forward contracts. Our foreign currency forward contracts are not designated as hedges for accounting purposes. Gains or
losses on foreign currency forward contracts are intended to offset gains or losses on the underlying net exposures in an effort to
reduce the earnings and cash flow volatility resulting from fluctuating foreign currency exchange rates. Foreign currencies and our
foreign currency forward contracts are marked to market at the end of each period and recorded as interest and other income, net in the
consolidated statements of operations.

Our foreign exchange forward contracts expose us to credit risk to the extent that the counterparty, a major financial institution, is
unable to meet the terms of the agreement. Our management does not expect material losses as a result of defaults by the counterparty.

Net Income (Loss) per Share Attributable to Common Stockholders

Basic and diluted net income (loss) per share attributable to common stockholders is calculated in conformity with the two-class
method required for companies with participating securities. Under the two-class method, in periods when we have net income, basic
net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less
current period convertible preferred stock noncumulative dividends, between the common stock and the convertible preferred stock. In
computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential

impact of dilutive securities. Basic net loss per share attributable to common stockholders is calculated by dividing the net loss
attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The
diluted net income per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock
equivalents outstanding for the period. In periods when we have incurred a net loss, convertible preferred stock, options and warrants
to purchase common stock and convertible preferred stock warrants are considered common stock equivalents but have been excluded
from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.

Recent Accounting Pronouncements

In May 2014, the FASB, jointly with the International Accounting Standards Board, issued, issued ASU 2014-09, Revenue from
Contracts with Customers. The standard's core principle is that a reporting entity will recognize revenue when it transfers promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. In applying this new guidance to contracts within its scope, an entity will: (1) identify the contract(s) with a
customer, (2) identify the performance obligation in the contract, (3) determine the transaction price, (4) allocate the transaction price
to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
Additionally, this new guidance will require significantly expanded revenue recognition disclosures. This guidance will become
effective for us beginning in the first quarter of 2017. Early application is not permitted. Entities have the option of using either a full
retrospective or a modified retrospective approach to adopt this new guidance. We are currently evaluating the impact of our pending
adoption of this standard on our consolidated financial statements.

3. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The carrying amounts of certain of our financial instruments, including cash
and cash equivalents, short-term investments, receivables from collaborations, prepaid expenses and other current assets and accounts
payable, accrued compensation and employee benefits, accrued and other liabilities and deferred revenue, approximate their fair value
due to their short maturities. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the
definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the
reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation
methodologies in measuring fair value as follows:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or
liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 – Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the
measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the
model.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. Where quoted prices are available in an active market, securities are classified as Level 1. We classify money
market funds as Level 1. When quoted market prices are not available for the specific security, then we estimate fair value by using
quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all
significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the
assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-
based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate
curves, reported trades, broker/dealer quotes and market reference data. We classify our corporate notes, commercial paper, U.S.
government agency securities and foreign currency forward contracts as Level 2. We have elected to use the income approach to value
the foreign currency forward contracts, using observable Level 2 market expectations at the measurement date and standard valuation
techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to
transact. Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other
than quoted prices that are observable for the asset or liability (specifically foreign currency spot and forward rates, and credit risk at
commonly quoted intervals). Mid-market pricing is used as a practical expedient for fair value measurements. The fair value
measurement of any asset or liability must reflect the non-performance risk of the entity and the counterparty to the transaction.
Therefore, the impact of the counterparty’s creditworthiness, when in an asset position, and our creditworthiness, when in a liability
position, has also been factored into the fair value measurement of the derivative instruments and did not have a material impact on
the fair value of these derivative instruments. Both we and the counterparty are expected to continue to perform under the contractual
terms of the instruments.

There were no transfers between Level 1 and Level 2 during the periods presented.

In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3. Our
convertible preferred stock warrant liability was classified as Level 3. The fair values of the convertible preferred stock warrants were
measured using the Black-Scholes option-pricing model. Inputs used to determine estimated fair value included the estimated fair
value of the underlying preferred stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free
interest rates, expected dividends and estimated volatility. Estimated volatility is based on the volatility of our peer group. We monitor
the historical volatility of peer group companies on a quarterly basis and adjust our estimated volatility when significant changes in the
peer group volatilities occur. The significant unobservable input used in the fair value measurement of the convertible preferred stock
warrant liability is the fair value of the underlying preferred stock at the valuation remeasurement date. The preferred stock warrants
were converted to common stock warrants upon the completion of the IPO and were no longer subject to remeasurement.

The following table sets forth the fair value of our financial assets and liabilities, allocated into Level 1, Level 2 and Level 3, that was
measured on a recurring basis (in thousands):

Financial Assets:

Money market funds ...................................................
Corporate notes and commercial paper .......................
U.S. government agency securities .............................
Total financial assets ...........................................................

Financial Assets:

Money market funds ...................................................
Corporate notes and commercial paper .......................
U.S. government agency securities .............................
Foreign currency forward contracts ............................
Total financial assets ...........................................................

Level 1

Level 2

Level 3

Total

December 31, 2014

24,915
–
–
24,915

Level 1

57,296
–
–
–
57,296

–
226,047
120,169
346,216

December 31, 2013

Level 2

Level 3

–
182,472
75,289
372
258,133

–
–
–
–

–
–
–
–
–

24,915
226,047
120,169
371,131

Total

57,296
182,472
75,289
372
315,429

Level 3 liabilities include the convertible preferred stock warrant liability. The following table sets forth a summary of the changes in
the estimated fair value of our convertible preferred stock warrants, which were measured at fair value on a recurring basis (in
thousands):

Balance as of December 31, 2011 ...........................................................................................................................................
Recognized gain ............................................................................................................................................................
Balance as of December 31, 2012 ...........................................................................................................................................
Recognized gain ............................................................................................................................................................
Reclassification of warrant liability to additional paid-in capital ...................................................................................
Balance as of December 31, 2013 ...........................................................................................................................................

766
(83)
683
(24)
(659)
–

The estimated fair value of the convertible preferred stock warrants outstanding through May 22, 2013, the date the remeasurement
was no longer applicable, and the year ended December 31, 2012 was determined using the Black-Scholes option-pricing model using
the following assumptions:

Risk-free interest rate ....................................................................................................
Estimated term equal to the remaining contractual term ...............................................
Volatility .......................................................................................................................
Dividend yield ..............................................................................................................

May 22,
2013
0.1 - 0.9%
1.7 - 3.8 years
79%
–

December 31,
2012
0.3 - 0.6%
2.1 - 4.2 years
82%
–

4. Financial Instruments

Cash equivalents and short-term and long-term investments, all of which are classified as available-for-sale securities, consisted of the
following (in thousands):

December 31, 2014

Unrealized Unrealized
Gains

Estimated
Fair
(Losses) Value

Cost

December 31, 2013

Unrealized Unrealized
Gains

Estimated
Fair
(Losses) Value

Money market funds ............. $ 24,915 $
Corporate notes and
commercial paper ..................
U.S. government agency
securities ...............................

226,209

120,246
$ 371,370 $

Classified as:

Cash equivalents ......
Short-term
investments ..............
Long-term
investments ..............

Total cash equivalents and
investments .........................

– $

4
12 $

– $

24,915 $ 57,296 $

– $

57,296

(170)

226,047

182,426

(16)

182,472

75,278
(81)
(251) $ 371,131 $315,000 $

120,169

23
85 $

75,289
(12)
(28) $ 315,057

36,341

251,759

83,030

$ 371,131

$ 113,794

150,892

50,371

$ 315,057

At December 31, 2014, the remaining contractual maturities of available-for-sale securities were less than two years. There have been
no significant realized gains or losses on available-for-sale securities for the periods presented. Available-for-sale debt securities that
were in a continuous loss position but were not deemed to be other than temporarily impaired were immaterial at both December 31,
2014 and 2013.

5. Derivative Instruments

We are exposed to foreign currency exchange rates related to our business operations. To reduce our risks related to these exposures,
we utilize certain derivative instruments, namely foreign currency forward contracts. We do not use derivatives for speculative trading
purposes.

We enter into foreign currency forward contracts, none of which are designated as hedging transactions for accounting purposes, to
reduce our exposure to foreign currency fluctuations of certain liabilities denominated in foreign currencies. These exposures are
hedged on a quarterly basis. We held no foreign currency forward contracts at December 31, 2014. As of December 31, 2013, we had
foreign currency forward contracts with notional amounts of €7.7 million ($10.6 million based on the exchange rate as of
December 31, 2013). As of December 31, 2013, we recorded a derivative asset within prepaid expenses and other current assets of
$372,000 related to these foreign currency forward contracts.

For the years ended December 31, 2014 and 2013, we recorded an unrealized loss of $114,000 and an unrealized gain of $261,000 ,
respectively, in interest and other income, net on our consolidated statement of operations related to these foreign currency forward
contracts. During the year ended December 31, 2014, we settled foreign currency forward contracts and recognized a realized loss of
$258,000 in interest and other income (expense), net. During the year ended December 31, 2013, we settled foreign currency forward
contracts and recognized a realized gain of $60,000 in interest and other income (expense), net.

Our derivative financial instruments present certain market and counterparty risks. In general, the market risk related to these contracts
is offset by corresponding gains and losses on the hedged transactions. The credit risk associated with these contracts is driven by
changes in interest and currency exchange rates and, as a result, varies over time.

6. Balance Sheet Components

Property and Equipment

Property and equipment consists of the following (in thousands):

Computer equipment ...........................................................................................
Capitalized software ............................................................................................
Equipment ...........................................................................................................
Leasehold improvements ....................................................................................

Less accumulated depreciation and amortization ................................................
Property and equipment, net .......................................................................

Accrued and Other Liabilities

Accrued and other liabilities consist of the following (in thousands):

Research and development related ......................................................................
Legal and accounting fees ...................................................................................
Deferred rent .......................................................................................................
Other ...................................................................................................................
Total accrued liabilities ...............................................................................

7. Collaboration and License Agreements

Summary of Collaboration and License Revenue

December 31,

2014

2013

734
674
4,852
4,217
10,477
(7,701 )
2,776

December 31,

2014

2013

12,545
354
127
940
13,966

618
463
3,690
3,988
8,759
(6,159)
2,600

16,110
462
879
345
17,796

We have recognized revenue from our collaboration and license agreements as follows (in thousands):

Year Ended December 31,

2014

2013

2012

Novartis:

Recognition of upfront license fee ....................................................... $
Reimbursement of research and development expense ........................
Novartis total ...............................................................................

– $
–
–

BMS and Pfizer:

Recognition of research and development services .............................
BMS and Pfizer total....................................................................

Bayer and Janssen:

Recognition of research and development services .............................
Bayer and Janssen total ................................................................

Lee’s:

Recognition of research and development services .............................
Lee’s total ....................................................................................

Daiichi Sankyo:

1,497
1,497

3,598
3,598

243
243

4,042
4,042

3,876
3,876

194
194

53,846
16,238
70,084

1,958
1,958

–
–

Recognition of research and development services .............................
Daiichi Sankyo total ....................................................................

Total collaboration and license revenue ....................................................... $

4,287
4,287
9,625 $

2,419
2,419
10,531 $

–
–
72,042

Novartis Pharma A.G. (“Novartis”)

In February 2009, we entered into an exclusive worldwide license agreement with Novartis to develop and commercialize Elinogrel,
which was amended in December 2010 and terminated effective July 1, 2012. Under the terms of the license agreement, Novartis
made an upfront cash payment to us of $75.0 million in exchange for an exclusive worldwide license to develop and commercialize
Elinogrel. We were eligible to receive additional cash payments totaling up to $505.0 million upon achievement by Novartis of certain
development, regulatory and commercialization milestones. We were obligated to participate on a Joint Steering Committee and a
Joint Development Committee (collectively, the “Committees”) with Novartis through December 31, 2018, to oversee development
activities related to Elinogrel, unless Novartis agreed to disband the Committees at an earlier date. Pursuant to the license agreement,
Novartis was obligated to fund development and commercialization expenses for Elinogrel after January 1, 2009, except for the first
$18.0 million of Phase 2 clinical trial costs and selected tasks, which we were obligated to fund.

We identified the following performance obligations under the license agreement with Novartis: 1) the transfer of intellectual property
rights (license), 2) the obligation to provide certain limited research and development services early during the term of the license
agreement and 3) the obligation to participate on the Committees. We accounted for these deliverables as a single unit of accounting,
as there was no objective and reliable evidence of the fair value of our undelivered performance obligation with respect to
participation on the Committees. The amounts we received from Novartis for the upfront license fee and collaborative research efforts
were recognized as collaboration revenue on a straight-line basis from the effective date of payment over the expected performance
period.

We estimated the term of our obligation to participate in the Committees to extend through December 31, 2018. In April 2012, we and
Novartis agreed to a plan to return all rights to Elinogrel to Portola and to terminate the exclusive worldwide license agreement
effective July 1, 2012. In connection with this plan, the expected term of our obligation to participate in the Committees changed from
December 31, 2018 to July 1, 2012. The change in term of the obligation to participate in the Committees was accounted for as a
change in accounting estimate on a prospective basis effective April 1, 2012. The change resulted in a $65.1 million increase in
collaboration revenue due to the recognition of all remaining revenue that would have otherwise been recorded over the obligation
period through December 31, 2018. Absent this acceleration, the net income for the year ended December 31, 2012 would have been
lower by $65.1 million, resulting in a net loss of $53.7 million and net loss per share would have been $3.98 compared to net income
per share of $0.00 as reported. As a result of terminating the agreement, all remaining deferred revenue was recognized immediately,
as no further performance obligations remained upon termination. As of the time of termination, no milestones had been achieved and
no royalties had been triggered under our agreement with Novartis.

Biogen Idec, Inc. (“Biogen Idec”)

In October 2011, we entered into an exclusive, worldwide license and collaboration agreement with Biogen Idec, which was
subsequently converted by its terms into a fully out-licensed agreement, under which Portola and Biogen Idec were to jointly develop
and commercialize highly selective, novel oral Syk inhibitors for the treatment of autoimmune and inflammatory diseases, including
rheumatoid arthritis, allergic asthma and systemic lupus erythematosus.

We led the initial development effort for the Syk inhibitor program until commencement of the first Phase 2 clinical trial in late 2012.
At that time, Biogen Idec assumed responsibility to lead the global development and commercialization efforts in major indications
such as rheumatoid arthritis and allergic asthma. We had the option to elect to lead U.S. development and commercialization efforts
for select smaller indications as well as discovery efforts for follow-on Syk inhibitors and retained an option to co-promote the drug
alongside Biogen Idec in the United States in major indications. On a product-by-product basis, we had and exercised an option to opt
out of our co-funding obligation of the development of such product. Pursuant to this option, we also relinquished our right to share
profits from sales of such product(s), but are entitled to receive royalties from Biogen Idec’s sales of these products.

Under the terms of the agreement, Biogen Idec provided us with a non-refundable upfront cash license fee of $36.0 million and paid $9.0
million for the purchase of 636,042 shares of our Series 1 convertible preferred stock at a premium of $1.1 million above the stock’s
estimated fair value. In addition, we estimated that the agreement would provide $22.9 million for the partial reimbursement of certain
research and development services and related committee participation and delivery of drug materials.

We identified the following four non-contingent performance deliverables under the license agreement: 1) the transfer of intellectual
property rights (license), 2) the obligation to provide research and development services, 3) the manufacture of drug material for
development purposes, until commencement of the first Phase 2 clinical trial and 4) the obligation to participate on various
committees. We have the right to opt out of any committees at any time after November 2013.

We considered the provisions of the multiple-element arrangement guidance in determining whether the deliverables outlined above
have standalone value. We believe that Biogen Idec has research and development expertise with compounds similar to those licensed
under the agreement and has the ability to engage other third parties to develop these compounds allowing Biogen Idec to realize the
value of the license without receiving any of the remaining deliverables. Additionally, under the agreement, Biogen Idec has the right
to sublicense this license to third parties, substantially with all the same rights and responsibilities. Therefore, the research and
development services, participation in committee activities and provision of drug materials are deemed to have standalone value as
Biogen Idec could negotiate for and/or acquire these from other third parties. Although participation in committee activities and
provision of drug materials have standalone value, they will be delivered and utilized as the research and development services are
performed and have a similar pattern of performance. These three deliverables are combined as one unit of accounting. There are no
rights of return under the agreement.

The upfront license fee of $36.0 million, the premium on the purchase of our Series 1 convertible preferred stock of $1.1 million and
research and development expense reimbursements of $22.9 million were allocated to the two separate units of accounting using the
relative estimated selling price method.

The arrangement consideration allocated to the license was recognized as collaboration and license revenue upon delivery in 2011.
The amount allocated to the research and development services, materials and committee participation unit of accounting was being
recognized over our estimated non-cancellable performance period of two years as a reduction to research and development expense.
Under the terms of the agreement, we and Biogen Idec jointly shared development responsibilities prior to the conversion of this
agreement into a fully out-licensed agreement, as if the two parties to the agreement incurred those costs directly.

Based upon the relative estimated selling prices for the two units of accounting for the year ended December 31, 2011, we recognized
collaboration revenue of $37.1 million and recorded a reduction in research and development expense for amounts owed by Biogen
Idec to us under the cost-sharing terms of the agreement totaling $734,000.

In November 2012, we elected to exercise our option under our agreement with Biogen Idec to convert the agreement to a fully out-
licensed agreement. After such election, we relinquished our right to share profits from sales of products related to PRT2607 and other
selective Syk inhibitors, but are entitled to receive royalties from sales of these products by Biogen Idec. We no longer have the
responsibility to fund the program under the agreement. The out-licensed agreement now provides for future payments to us of up to
approximately $370.0 million based on the occurrence of certain development and regulatory events. Biogen Idec has elected to
assume all future development work for Syk inhibitors, including the major indications, such as allergic asthma. This agreement will
continue in force until either party terminates the agreement pursuant to the agreement or until the expiration of Biogen Idec’s royalty
obligations pursuant to the agreement. Biogen Idec may terminate the agreement without cause upon 120 days’ notice. In such event,
we would regain all development rights and Biogen Idec would have no further payment obligations pursuant to the agreement. As of
December 31, 2014, no such termination event has occurred.

In April 2014, we entered into an amendment to the Biogen Idec license and collaboration agreement under which Biogen Idec
released one of the Syk kinase inhibitors to us for use in topical ophthalmic indications. Per the terms of the amendment, we will be
required to pay $15.0 million upon the completion of certain commercial milestones and pay royalties on sales of products approved
for these Syk kinase inhibitors. There was no accounting effect resulting from this amendment.

During the years ended December 31, 2014, 2013 and 2012, we recorded a reduction in research and development expense of
$210,000, $804,000 and $6.5 million, respectively, owed by Biogen Idec to us under the cost-sharing terms of the agreement.

As of December 31, 2014, no milestone in the agreement had been achieved and no royalties had been triggered under this agreement.

Bristol-Myers Squibb Company (“BMS”) and Pfizer Inc. (“Pfizer”)

In October 2012, we entered into a three-way agreement with BMS and Pfizer to include subjects dosed with apixaban, their jointly
owned product candidate, in one of our Phase 2 proof-of-concept studies of Andexanet alfa. We are responsible for the cost of
conducting this clinical study. BMS and Pfizer will work closely with us on both development and regulatory aspects of Andexanet
alfa in connection with our Phase 2 proof-of-concept studies to the extent such matters relate to apixaban. Pursuant to our agreement
with BMS and Pfizer we are obligated to provide research and development services and participate on various committees. We
originally estimated the period of performance of our obligations to extend through the second quarter 2013. During 2013, we added
more cohorts than originally planned as part of the original study design at the inception of our agreement and therefore revised our
estimated period of performance to be through the fourth quarter of 2013. The effects of these changes in estimates were not
significant.

The total consideration under this agreement of $6.0 million was recognized as revenue on a straight-line basis over the estimated
performance period through the fourth quarter of 2013. For the year ended December 31, 2013 and 2012, we recognized $4.0 and $2.0
million in collaboration revenue, respectively.

In January 2014, we entered into a collaboration agreement with BMS and Pfizer to further study Andexanet alfa as a reversal agent
for their jointly owned FDA approved oral Factor Xa inhibitor, apixaban, through Phase 3 studies. We initiated Phase 3 studies in the
first half of 2014. We are responsible for the cost of conducting this clinical study. Pursuant to our agreement with BMS and Pfizer we
are obligated to provide research, development and regulatory approval services and participate in the Joint Collaboration Committee
(“JCC”) in exchange for a partially refundable upfront fee of $13.0 million and up to $12.0 million of contingent milestone payments
due upon achievement of certain development and regulatory events. All consideration received and to be earned under this agreement
is subject to a 50% refund contingent upon certain regulatory and/or clinical events.

We concluded that the January 2014 and October 2012 contracts should each be accounted for as standalone agreements. We
identified the following non-cancellable performance deliverables under the January 2014 agreement: 1) the obligation to provide
research and development services, which include manufacturing and supplying Andexanet alfa and providing various reports, 2) the
obligation to provide regulatory approval services, and 3) the obligation to participate on the JCC. We considered the provisions of the
multiple-elements arrangement guidance in determining how to recognize the total agreement consideration. We determined that none
of the deliverables have standalone value and all of these obligations will be delivered throughout the estimated period of performance
and therefore are accounted for as a single unit of accounting. The non-contingent upfront consideration under this agreement of $6.5
million is being recognized on a straight-line basis over the estimated period of performance. In the third quarter of 2014, we revised
the remaining estimated period of performance from the first quarter of 2017 to the first quarter of 2018 to reflect a modification to
our clinical development and regulatory plans. The contingent upfront consideration of $6.5 million will be recognized if and when
the refundable nature of these amounts lapses based upon the achievement of specified regulatory and/or clinical events.

The contingent milestone payments under the January 2014 agreement are not considered substantive because a portion may be
refunded upon certain events. The non-contingent portion of any milestone payments will be recognized as collaboration revenue on a
straight-line basis from their receipt date thru the estimated remaining period of performance. The contingent portion of the milestone
payments will be recognized upon receipt if and when the refundable nature of these amounts lapses based upon the achievement of
specified regulatory and/or clinical events. None of these milestones had been earned or received at December 31, 2014.

During the year ended December 31, 2014 we recognized $1.5 million in collaboration revenue under this agreement. The deferred
revenue balance under this agreement as of December 31, 2014 was $11.5 million.

Lee’s Pharmaceutical (HK) Ltd (“Lee’s”)

In January 2013, we entered into an agreement with Lee’s to jointly expand our Phase 3 APEX Study of Betrixaban into China. Under
the terms of the agreement, Lee’s provided us with an upfront and non-refundable fee of $700,000 and will reimburse our costs in
connection with the expansion of the APEX study into China. Lee’s will lead this study and the regulatory interactions with China’s
State Food and Drug Administration. We granted Lee’s an exclusive option to negotiate for the exclusive commercial rights to
Betrixaban in China, which may be exercised by Lee’s for 60 days after it receives the primary data analysis report from the Phase 3
APEX study.

We identified the following deliverables under the agreement with Lee’s: 1) the granting of an exclusive option to negotiate for the
exclusive commercial rights to Betrixaban in China, 2) the obligation to manufacture and supply product in support of the APEX
study in China, 3) the obligation to participate in a joint working group, and 4) the delivery of the primary data analysis report from
the APEX study. We considered the provisions of the multiple-element arrangement guidance in determining how to recognize the
total consideration of the agreement. We determined that none of the deliverables have standalone value and therefore are accounted
for as a single unit of accounting with the upfront fee recognized as revenue on a straight-line basis over the estimated period of
performance through the first quarter of 2016. Any reimbursements we may receive from Lee’s for the costs we incur in connection
with this agreement have not been material.

For the year ended December 31, 2014 and 2013, we recognized $243,000 and $194,000 of collaboration revenue under this
agreement, respectively. The deferred revenue balance as of December 31, 2014 was $263,000.

Bayer Pharma, AG (“Bayer”) and Janssen Pharmaceuticals, Inc. (“Janssen”)

We identified the following performance deliverables under the agreement: 1) the obligation to provide research and development
services, which includes supplying Andexanet alfa and providing a final written report, and 2) the obligation to participate on the JCC.
We considered the provisions of the multiple-element arrangement guidance in determining how to recognize the revenue associated
with these two deliverables. We have accounted for the research and development services and our participation on the JCC as a single
unit of accounting as neither deliverable has standalone value and both obligations will be delivered throughout the estimated period
of performance. We originally estimated the period of performance to be through the fourth quarter of 2013. During 2013, we added
more cohorts than originally planned as part of the original study design at the inception of our agreement and therefore adjusted our
period of performance to be through the fourth quarter of 2014. The total upfront consideration under this agreement was recognized
as revenue on a straight-line basis over the performance period through the fourth quarter of 2014.

For the year ended December 31 2014 and 2013, we recognized $1.1 million and $3.9 million in collaboration revenue, respectively.
There was no deferred revenue balance under this agreement as of December 31, 2014.

In January 2014, we entered into a three-way agreement with Bayer and Janssen to study the safety and efficacy of Andexanet alfa as
a reversal agent to their oral Factor Xa inhibitor, rivaroxaban, in our Phase 3 studies. We are responsible for the cost of conducting this
clinical study. Pursuant to our agreement with Bayer and Janssen we are obligated to provide research, development and regulatory
services and to participate in a JCC in exchange for an upfront nonrefundable fee of $10.0 million, up to three contingent payments
totaling $7.0 million which are payable upon achievement of certain events associated with scaling up our manufacturing process to
support a commercial launch, and up to three payments totaling $8.0 million which are payable upon initiation of our Phase 3 study
and regulatory approval of Andexanet alfa as a reversal agent to rivaroxaban by the FDA and European Medicines Agency (“EMA”).

We identified the following non-cancellable performance deliverables under the agreement: 1) the obligation to provide research and
development services, which include manufacturing and supplying Andexanet alfa and providing various reports, 2) the obligation to
provide regulatory approval services, and 3) the obligation to participate on the JCC. We considered the provisions of the multiple-
element arrangement guidance in determining how to recognize the total consideration of the agreement. We determined that none of
the deliverables have standalone value; all of these obligations will be delivered throughout the estimated period of performance and
therefore are accounted for as a single unit of accounting. The total upfront consideration under this agreement is being recognized as
revenue on a straight-line basis over the estimated period of performance period. In the third quarter of 2014 we updated our estimated
period of performance from the first quarter of 2017 to the first quarter of 2018 to reflect a modification to our clinical development
and regulatory plans.

We have determined all but one of the future contingent payments meet the definition of a milestone and that such milestones are substantive
in that the consideration is reasonable relative to all of the deliverables and payment terms within the agreement and commensurate with our
performance to achieve the milestone after commencement of the agreement. Accordingly, revenue for the achievement of these milestones
will be recognized in the period when the milestone is achieved and collectability is reasonably assured. As of December 31, 2014, no
amounts had been recognized as collaboration revenue for any of these milestones. The continent payment of $3.0 million not considered to
be a substantive milestone was received in the third quarter of 2014 and is being recognized as collaboration revenue on a straight-line basis
over the estimated remaining performance period through the first quarter of 2018.

During the year ended December 31, 2014 we recognized $2.5 million in collaboration revenue under this agreement. The deferred
revenue balance under this agreement as of December 31, 2014 was $10.5 million.

Aciex Therapeutics, Inc. (“Aciex”)

In February 2013, we entered into a license and collaboration agreement with Aciex pursuant to which we granted Aciex an exclusive
license to co-develop and co-commercialize Cerdulatinib (PRT2070) and certain related compounds for nonsystemic indications, such
as the treatment and prevention of ophthalmological diseases by topical administration and allergic rhinitis by intranasal
administration. In April 2014, this agreement was amended to release all rights for Cerdulatinib to Portola. The collaboration is now
focused on development of other related compounds for topical ophthalmic indications. There were no accounting consequences
associated with the amendment. Under the terms of this risk and cost sharing agreement, Portola and Aciex will each incur and report
their own internal research and development costs. Further, third-party related development costs will be shared by Aciex and us 60%
and 40%, respectively, until the end of the Phase 2 clinical study, and then equally afterwards. Also, we are entitled to receive either
one-half of the profits, if any, generated by future sales of the products developed under the agreement, or royalty payments. Aciex
has the primary responsibility for conducting the research and development activities under this agreement. We are obligated to
provide assistance in accordance with the agreed upon development plan as well as participate on various committees. We can opt out
of our obligation to share in the development costs at various points in time, the timing of which impacts future royalties we may
receive based on product sales made by Aciex. All net costs we incur in connection with this agreement will be recognized as research
and development expenses. During 2014 and 2013, no such costs have been incurred related to this agreement.

In July 2014, Aciex was acquired by Nicox S.A. and the acquisition closed in October 2014. As of December 31, 2014, there has been
no change to our agreement with Aciex.

Daiichi Sankyo, Inc. (“Daiichi Sankyo”)

In June 2013, we entered into an agreement with Daiichi Sankyo to include subjects dosed with edoxaban, their Factor Xa inhibitor
product, in one of our Phase 2 proof-of-concept studies of Andexanet alfa. We are responsible for the cost of conducting this clinical
study. Under the terms of the agreement, Daiichi Sankyo will provide us with an upfront fee of $6.0 million, $3.0 million of which
was subject to refund should Daiichi Sankyo decide to terminate the agreement. We are obligated to participate on a JCC with Daiichi
Sankyo to oversee the collaboration activities under the agreement.

We considered the provisions of the multiple-element arrangement guidance in determining how to recognize the revenue associated
with these two deliverables. We have accounted for the research and development services and our participation on the JCC as a single
unit of accounting as neither deliverable has standalone value and both obligations will be delivered throughout the estimated period
of performance. We originally estimated the non-contingent consideration under this agreement of $3.0 million would be recorded as
revenue on a straight-line basis over the estimated non-contingent performance period through the second quarter of 2014. In
December 2013, the JCC agreed to forego certain preclinical studies that were planned in the original study design at the inception of
the agreement. As a result of this change, we updated our non-contingent performance period to be through the first quarter of 2014.
The recognition of contingent consideration under this agreement of $3.0 million commenced upon resolution of the contingency in
the first quarter of 2014 and was originally being recognized over the estimated performance period through the first quarter of 2015.
During the fourth quarter of 2014 we decided to include edoxaban data in our initial BLA filing and thus updated the performance
period associated with the contingent payment to be through the fourth quarter of 2015.

For the year ended December 31, 2014, we recognized $2.5 million in collaboration revenue associated with the contingent and the
non-contingent element of the arrangement. For the year ended December 31, 2013, we recognized $2.4 million in collaboration
revenue associated with the non-contingent element of the arrangement. The deferred revenue balance under this agreement as of
December 31, 2014 was $1 million.

In July 2014, we entered into an agreement with Daiichi Sankyo to study the safety and efficacy of Andexanet alfa as a reversal agent
to their oral Factor Xa inhibitor, edoxaban, in our Phase 3 and Phase 4 studies. We are responsible for the cost of conducting these
clinical studies. Pursuant to our agreement with Daiichi Sankyo we are obligated to provide research, development and regulatory
services and to participate in a JCC in exchange for an upfront nonrefundable fee of $15.0 million, up to two contingent payments
totaling $5.0 million which are payable upon the initiation of our Phase 3 study and achievement of certain events associated with
scaling up our manufacturing process to support a commercial launch, and up to four payments totaling $20.0 million which are
payable upon acceptance of filing and regulatory approval of Andexanet alfa as a reversal agent to edoxaban by the FDA and EMA.

We have determined all but one of the future contingent payments meet the definition of a milestone and that such milestones are
substantive in that the consideration is reasonable relative to all of the deliverables and payment terms within the agreement are
commensurate with our performance to achieve the milestone after commencement of the agreement. Accordingly, revenue for the
achievement of these milestones will be recognized in the period when the milestone is achieved and collectability is reasonably
assured. As of December 31, 2014, no amounts had been recognized as collaboration revenue for any of these milestones. Amounts
for the continent payment not considered to be a substantive milestone will be deferred when received and recognized as collaboration
revenue on a straight-line basis over the remaining estimated performance period.

During the year ended December 31, 2014 we recognized $1.8 million in collaboration revenue under this agreement. The deferred
revenue balance under this agreement as of December 31, 2014 was $13.2 million.

8. Commercial Supply Agreement

In July 2014, we entered into an agreement with CMC ICOS Biologics, Inc. (“CMC Biologics”), a subsidiary of CMC Biologics
S.à.r.l., a privately-held contract manufacturing organization, pursuant to which CMC Biologics will manufacture clinical and
commercial supply of Andexanet alfa.

Under the agreement, we are required to purchase an aggregate fixed number of batches of Andexanet alfa from CMC Biologics
beginning in 2015 through 2021. Total batch commitments under the agreement can be increased or decreased based on the
achievement of milestones relating to the regulatory approval process for Andexanet alfa, expansion of existing manufacturing
capacity and operational qualification of CMC Biologics’ manufacturing facilities. We made an upfront payment to CMC Biologics in
the amount of $10.0 million in July 2014 and have made a reservation payment to CMC Biologics of $4.6 million in November 2014.
Both payments will be credited against our future purchases of batches under the agreement.

Total fixed commitments under the agreement for the purchases of clinical and commercial batches, not taking into account possible
price and batch adjustments per the terms of the agreement, are approximately $293.9 million. Payments made under the agreement as
of December 2014 amount to $2.6 million.

In addition, we may terminate the agreement unilaterally if we discontinue the development and commercialization of Andexanet alfa
for regulatory, safety, efficacy or other commercial reasons, or if the projected market demand or gross margin of Andexanet alfa is
below a minimum threshold. The termination provisions will obligate us to pay CMC Biologics a termination fee between $16.0
million and $30.0 million, depending on the date of termination. The termination fee is highest from 2015 through 2017, and then
decreases through 2021. Any remaining upfront payments or reservation payments we have made, not yet credited against the
purchase of batches, at the time of termination will be applied against the termination fee.

Under the lease accounting guidance, we determined that the agreement does not contain an embedded lease because the agreement
does not convey the right to control the use of CMC Biologics’ facility. We based this determination on, among other factors, our right
to physically access and/or operate CMC Biologics’ facility and one or more parties, other than us, and taking more than a minor
amount of the output that will be produced or generated by the CMC Biologics facility during the term of our agreement.

Under the consolidation guidance, we determined that CMC Biologics is a VIE, but that we are not CMC Biologics’ primary
beneficiary and therefore consolidation of CMC Biologics by us is not required. We based this determination on, among other factors,
the upfront and reservation payment being akin to a form of subordinated financing, the fixed pricing terms of the arrangement
creating variability that is absorbed by us, and that we do not have the power to direct the activities that most significantly affect the
economic performance of CMC Biologics.

100

As of December 31, 2014, we have not provided financial, or other, support to CMC Biologics that was not previously contractually
required. The upfront fees of $14.6 million recorded in prepaid expenses and other long-term assets and the batch initiation payments
of $2.6 million recorded in prepaid expenses and other current assets in the consolidated balance sheets represents our maximum
exposure to loss under this agreement at December 31, 2014. The upfront payment will be charged to research and development
expense, or cost of sales, upon regulatory approval of Andexanet alfa, as batches are delivered over the term of the agreement. We are
currently not able to quantify the exposure to losses associated with the fixed pricing terms of this agreement.

9. Asset Acquisition and License Agreements

Millennium Pharmaceuticals, Inc. (“Millennium”)

In November 2003, we acquired patent rights and intellectual property to an ADP Receptor Antagonist Program (“ADP Program”)
and a Platelet Biology Program from Millennium. We are obligated to pay royalties on sales of products developed in the ADP
Program if product sales are ever achieved.

In November 2007, we elected to continue our development of Betrixaban and the Factor Xa backup chemistry beyond December 1,
2007 and accordingly, paid $5.0 million in cash to Millennium, which was charged to research and development expense, as the rights
had no alternative future use. We could owe Millennium up to $35.0 million upon the occurrence of specified events related to
Betrixaban and royalties on sales of Factor Xa products, if such product sales are ever achieved.

Astellas Pharma, Inc. (“Astellas”)

In June 2005, we licensed certain rights to research, develop and commercialize Syk inhibitors, including Cerdulatinib, from Astellas.

In 2011, under the terms of the license agreement and in connection with the Biogen Idec collaboration agreement to develop Syk, we
paid $7.2 million in cash to Astellas, which was charged to research and development expense as the rights had no alternative future
use.

We may be required to pay Astellas up to $71.5 million upon the achievement of certain regulatory, approval and sales events for each
Syk inhibitor we develop. In the event that we enter into an agreement with a third party to develop and commercialize Syk inhibitors,
we would be required to pay Astellas 20% of any payments (excluding royalties) received under the collaboration. These payments
would be creditable against the aforementioned milestone payments. In addition, we are required to pay Astellas royalties for
worldwide sales for any commercial Syk inhibitor product.

10. Restructuring Charge

In November 2012, as part of our strategy to better align our capital resources with our clinical development plan, we reduced our
workforce by 23 employees, 16 of whom were immediately terminated, five of whom were terminated on January 31, 2013, and two
of whom were terminated on April 30, 2013. The final restructuring charge of $698,000 includes severance and related costs
associated with the termination of the employees. For the year ended December 31, 2013, we recorded a net restructuring charge of
$79,000, of which $66,000 is included within research and development expense and $13,000 is included within general and
administrative expense on our consolidated statements of operations. During the year ended December 31, 2013, we paid $223,000 of
severance costs. There were no remaining amounts accrued for the restructuring liability at December 31, 2013.

11. Commitments and Contingencies

We conduct product research and development programs through a combination of internal and collaborative programs that include,
among others, arrangements with universities, contract research organizations and clinical research sites. We have contractual
arrangements with these organizations; however, these contracts are cancelable on 30 days’ notice and our obligations under these
contracts are largely based on services performed with the exception of our contract manufacturers. Non-cancelable purchase
commitments with contract manufacturing organizations exclusive of the commercial supply agreement disclosed in footnote 8
amount to $25.3 million and $2.6 million in services to be performed in 2015 and 2016, respectively.

101

Facility Leases

We lease our corporate, laboratory and other facilities under an operating lease, which was extended in May 2010 through March 31,
2015. The 2010 lease amendment provided for tenant improvement allowances of $3.2 million, which are amortized as a reduction to
rent expense on a straight-line basis over the lease term. In March 2014, we signed an amendment to the 2010 lease agreement for
additional space and to extend the lease term through March 2020. The 2014 lease amendment provided for a tenant improvement
allowance of $1.8 million, which is being amortized as a reduction to rent expense on a straight-line basis over the lease term and an
early termination right effective March 2018 with nine months advance notice. The facility lease agreement, as amended, contains
scheduled rent increases over the lease term. Under the 2014 lease amendment, we have an option to extend the lease for an additional
three-year term. The related rent expense for this lease is calculated on a straight-line basis, with the difference recorded as deferred
rent.

At December 31, 2014, our future minimum commitments under our non-cancelable operating leases were as follows (in thousands):

Year ending December 31:

2015 ..................................................................................................................................
2016 ..................................................................................................................................
2017 ..................................................................................................................................
2018 ..................................................................................................................................
2019 ..................................................................................................................................
Thereafter ..........................................................................................................................
Total ..................................................................................................................................

1,769
2,070
2,134
2,200
2,267
571
11,011

Rent expense was $1.2 million, $803,000 and $800,000 for the years ended December 31, 2014, 2013 and 2012, respectively.

Guarantees and Indemnifications

We indemnify each of our officers and directors for certain events or occurrences, subject to certain limits, while the officer or director
is or was serving at our request in such capacity, as permitted under Delaware law and in accordance with our certificate of
incorporation and bylaws. The term of the indemnification period lasts as long as an officer or director may be subject to any
proceeding arising out of acts or omissions of such officer or director in such capacity.

The maximum amount of potential future indemnification is unlimited; however, we currently hold director and officer liability
insurance. This insurance allows the transfer of risk associated with our exposure and may enable us to recover a portion of any future
amounts paid. We believe that the fair value of these indemnification obligations is minimal. Accordingly, we have not recognized any
liabilities relating to these obligations for any period presented.

12. Stock Based Compensation

Equity Incentive Plan

In January 2013, our Board of Directors adopted our 2013 Equity Incentive Plan, or the 2013 Plan, which became effective upon of
the closing of our IPO in May 2013. The 2013 Plan has 935,213 shares of common stock available for future issuance as of December
31, 2014, subject to automatic annual increases beginning on January 1, 2014 through January 1, 2023. Further, all remaining shares
available under the 2003 Equity Incentive Plan, or the 2003 Plan, were transferred to the 2013 Plan upon adoption. The 2013 Plan
provides for the granting of incentive stock options, nonstatutory stock options, stock bonuses and rights to acquire restricted stock to
employees, officers, directors and consultants. Incentive stock options may be granted with exercise prices of not less than 100% of
the estimated fair value of our common stock and nonstatutory stock options may be granted with an exercise price of not less than
85% of the estimated fair value of the common stock on the date of grant. Stock options granted to a stockholder owning more than
10% of our voting stock must have an exercise price of not less than 110% of the estimated fair value of the common stock on the date
of grant. Stock options are generally granted with terms of up to ten years and vest over a period of four years.

As of December 31, 2014, 6,949,108 shares of common stock were reserved under the 2013 Plan for the issuance of options and
restricted stock.

102

A summary of Portola’s stock option activity follows:

Shares Available
for Grant

Balance at December 31, 2013 ....................................................
Options authorized ..............................................................
Options granted ...................................................................
Options exercised ................................................................
Options canceled .................................................................
Balance at December 31, 2014 ....................................................

81,948
2,045,785
(1,358,013)
–
165,493
935,213

Shares
Subject to
Outstanding
Options

3,708,773
–
1,358,013
(652,125 )
(165,493 )
4,249,168

Weighted-
Average Exercise
Price Per Share
9.43
–
25.96
6.68
18.86
14.77

Additional information related to the status of options at December 31, 2014, is as follows (aggregate intrinsic value in thousands):

Weighted-
Average

Remaining
Exercise Price Contractual

Aggregate

Outstanding ..............................................................
Vested and expected to vest .....................................
Vested ......................................................................

4,249,168 $
4,106,671 $
2,503,676 $

14.77
14.47
9.67

Per Share

Life

Intrinsic Value
57,709
57,009
46,722

6.6 $
6.6 $
5.2 $

The aggregate intrinsic values of options outstanding and exercisable, vested and expected to vest were calculated as the difference
between the exercise price of the options and the fair value of our common stock as of December 31, 2014. The aggregate intrinsic
value of options exercised was $12.5 million, $6.3 million and $451,000 for the years ended December 31, 2014, 2013 and 2012,
respectively.

The total estimated grant date fair value of options vested during the years ended December 31, 2014, 2013 and 2012 was $9.0
million, $3.8 million and $3.0 million, respectively.

Additional information regarding our stock options outstanding and vested and exercisable as of December 31, 2014 is summarized
below:

Exercise Prices
$1.00 - $5.10 ................................
$5.30 - $9.00 ...............................
$9.50 - $23.85 ..............................
$24.39 - $26.67 ............................
$26.75 - $29.19 ............................

Options Outstanding

Options Vested

Weighted
Average
Remaining
Contractual
Life (Years)

Weighted
Average
Exercise Price
per Share

Number
of
Options
Vested

Weighted
Average
Exercise Price
Per Share

2.8
6.0
8.2
8.6
9.5
6.6

4.21
8.07
17.61
25.13
28.42
14.77

945,481
927,581
406,830
178,702
45,082
2,503,676

4.21
8.21
16.81
25.04
29.02
9.67

Number of
Options
Outstanding

945,481
1,068,191
976,963
861,050
397,483
4,249,168

Stock-based compensation expense, net of estimated forfeitures, is reflected in the consolidated statements of operations as follows (in
thousands):

Research and development ....................................................
General and administrative ...................................................
Total stock-based compensation ...........................................

4,551
4,782
9,333

2,295
2,679
4,974

1,452
1,357
2,809

2014

Year Ended December 31,
2013

2012

103

As of December 31, 2014, total unamortized employee and nonemployee stock-based compensation was $21.8 million, which is
expected to be recognized over the remaining estimated vesting period of 2.8 years. The weighted-average grant date fair value of
employee options granted during the years ended December 31, 2014, 2013 and 2012 was $15.73, $12.46 and $5.90 per share,
respectively.

Valuation Assumptions

The employee stock-based compensation expense was determined using the Black-Scholes option valuation model. Option valuation
models require the input of subjective assumptions and these assumptions can vary over time. The risk-free rate is based on U.S.
Treasury zero-coupon issues with remaining terms similar to the expected terms of the awards. The expected term of employee
options granted is determined using the simplified method (based on the midpoint between the vesting date and the end of the
contractual term). As sufficient trading history does not yet exist for our common stock, therefore our estimate of expected volatility is
based on the volatility of other companies with similar products under development, market, size and other factors. To date, we have
not declared or paid any cash dividends and do not have any plans to do so in the future. Therefore, we used an expected dividend
yield of zero.

The following table illustrates the weighted-average assumptions for the Black-Scholes option-pricing model used in determining the
fair value of options granted to employees:

Risk-free interest rate ....................................................................
Expected life .................................................................................
Expected volatility ........................................................................
Dividend yield ...............................................................................

Options Granted to Nonemployees

2014
1.81% - 1.89%
6.0 years
69% - 80%
–

Year Ended December 31,
2013
1.43%
6.0 years
79%
–

2012
1.10%
6.0 years
72%
–

We have granted options to purchase shares of common stock to consultants in exchange for services performed. We granted options
to purchase 33,888, 32,943 and 6,380 shares with average exercise prices of $25.41, $19.88 and $7.00 per share, respectively, during
the years ended December 31, 2014 2013 and 2012, respectively. These options vest upon grant or various terms up to four years. We
recognized non-employees stock compensation expense of $769,000, $775,000 and $144,000 during the years ended December 31,
2014, 2013 and 2012, respectively. The fair value of non-employees’ options was measured using the Black-Scholes option-pricing
model reflecting the same assumptions as applied to employee options in each of the reported years, other than the expected life
assumption, which is assumed to be the remaining contractual life of the option.

Employee Stock Purchase Plan

The Board of Directors adopted the 2013 Employee Stock Purchase Plan, effective upon the completion of Portola’s initial public
offering of its common stock. Portola reserved a total of 1,000,000 shares of common stock for issuance under the plan. Eligible
employees may purchase common stock at 85 percent of the lesser of the fair market value of Portola’s common stock on the first or
last day of the offering period. The reserve for shares available under the plan automatically increases on January 1st each year,
beginning in 2014, by an amount equal to 2 percent of the total number of outstanding shares of our common stock on December 31st
of the preceding fiscal year.

The following table illustrates the weighted-average assumptions for the Black-Scholes option-pricing model used in determining the
fair value of ESPP purchase rights granted to employees:

Risk-free interest rate ...........................................................................................
Expected life ........................................................................................................
Expected volatility ...............................................................................................
Dividend yield ......................................................................................................

Year Ended December 31,

2014
0.08%
0.5 years
73%
–

2013
0.10%
0.4 years
62%
–

104

13. Net (Loss) Income per Share Attributable to Common Stockholders

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net (loss) income per
share attributable to common stockholders for the periods presented because including them would have been antidilutive:

Convertible preferred stock ....................................................................
Stock options to purchase common stock ..............................................
Convertible preferred stock warrants .....................................................
Common stock warrants .........................................................................

Year Ended December 31,

2014

–
4,249,168
–
6,240

2013

–
3,708,773
–
82,575

2012
24,026,797
1,653,298
81,075
1,500

The following table sets forth the computation of our basic and diluted net (loss) income per share attributable to common
stockholders (in thousands, except share and per share data):

Year Ended December 31,

Net (loss) income ................................................................................... $
Noncumulative dividends on convertible preferred stock ......................
Net loss attributable to common stockholders, basic .............................
Adjustment to undistributed earnings allocated to participating
securities ................................................................................................
Net loss attributable to common stockholders, diluted .......................... $

2013

2012

2104

(137,125)
–
(137,125)

(83,352 )
–
(83,352 )

–

(137,125)

(83,352 )

Shares used in computing net loss per share attributable to common
stockholders, basic .................................................................................
Dilutive effect of common stock options ...............................................
Shares used in computing net loss per share attributable to common
stockholders, diluted ..............................................................................

42,977,463

22,842,443

–

42,977,463

22,842,443

11,366
(11,366)
–

–

1,350,939

697,928

2,048,867

Net loss per share attributable to common stockholders:
Basic ....................................................................................................... $
Diluted ................................................................................................... $

(3.19)
(3.19)

$
$

(3.65 )
(3.65 )

$
$

–
–

14. Employee Benefit Plan

We sponsor a 401(k) Plan, which stipulates that eligible employees can elect to contribute to the 401(k) Plan, subject to certain
limitations of eligible compensation. We match employee contributions up to a maximum of $2,000, $500 and $500 per employee for
the years ended December 31, 2014, 2013 and 2012, respectively. During the years ended December 31, 2014, 2013 and 2012, we
recognized total expense of $153,000, $59,000 and $31,000, respectively.

15. Income Taxes

We did not record a tax provision for the years ended December 31, 2014, 2013 and 2012. The effective tax rate of our provision for
income taxes differs from the federal statutory rate as follows:

Federal statutory income tax rate .....................................................................
State income taxes, net of federal benefit.........................................................
Federal and state research credits .....................................................................
Stock based compensation ...............................................................................
Other ................................................................................................................
Change in valuation allowance ........................................................................

105

Year Ended December 31,
2013

2012

2014

34.0%
11.2
2.7
(1.6)
(0.1)
(46.2)

0.0%

34.0 %

0.4
3.4
(0.2 )
(0.5 )
(37.1 )

0.0 %

34.0%
22.8
0.8
0.4
(0.1)
(57.9)
0.0%

In 2012, we did not record an income tax provision on pre-tax income because we incurred a current taxable loss for federal income
tax purposes and had available tax credits to offset all state income tax. Tax credits were used in lieu of net operating losses because in
2012 state law suspended their use. Our valuation allowance at December 31, 2014 and 2013 appropriately considers the balances of
both net operating losses and deferred revenue.

Significant components of our deferred tax assets are as follows (in thousands):

December 31,

2014

2013

Deferred tax assets:

Federal and state net operating loss carryforwards ........................................................
Federal and state research tax credit carryforwards .......................................................
Deferred revenue ............................................................................................................
Stock options ..................................................................................................................
Capitalized acquisition costs ..........................................................................................
Other ..............................................................................................................................
Total deferred tax assets ........................................................................................
Valuation allowance ...............................................................................................................
Net deferred tax assets ...........................................................................................................

146,725
15,337
12,523
3,776
1,322
3,589
183,272
(183,272 )
–

102,478
10,750
1,755
2,895
1,295
654
119,827
(119,827)
–

Realization of the deferred tax assets is dependent upon the generation of future taxable income, if any, the amount and timing of
which are uncertain. Based on available objective evidence, including the fact that we have incurred significant losses in almost every
year since our inception, management believes it is more likely than not that our deferred tax assets are not recognizable. Accordingly,
deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $63.5 million for the year
ended December 31, 2014. The valuation allowance increased by $30.7 million for the year ended December 31, 2013.

As of December 31, 2014, we had net operating loss carryforwards for federal income tax purposes of approximately $364.4 million
and federal research tax credits of approximately $15.2 million, which expire at various dates in the period from 2024 to 2034. We
also have California net operating loss carry forwards of approximately $449.6 million which expire at various dates in the period
from 2018 to 2034 and California research tax credits of $3.8 million. Utilization of the net operating loss carryforwards and credits
will be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as
amended and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before
utilization.

Uncertain Tax Positions

We have not been audited by the Internal Revenue Service or any state tax authority. We are subject to taxation in the United States.
Because of the net operating loss and research credit carryforwards, substantially all of our tax years, from 2003 through 2013, remain
open to U.S. federal and California state tax examinations.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Year Ended December 31,
2013

2014

2012

Unrecognized tax benefits, beginning of period ...............................................
Gross increases - current period tax positions ...................................................
Gross decreases - tax position in prior period ...................................................
Unrecognized tax benefits, end of period ..........................................................

2,048
858
–
2,906

1,435
619
(6)
2,048

1,344
91
–
1,435

The amount of unrecognized income tax benefits that, if recognized, would affect our effective tax rate was $365,000 as of
December 31, 2014 and 2013. If the $2.9 million and $2.0 million of unrecognized income tax benefits as of December 31, 2014 and
2013, respectively, is recognized, there would be no impact to the effective tax rate as any change will fully offset the valuation
allowance. We believe that it is reasonably possible that a decrease of $365,000 in unrecognized tax benefits related to state exposures
is necessary within the coming year as a result of a lapse of the state statute of limitations.

106

16. Related Party Transactions

Our former President and Chief Executive Officer, who is currently a member of our board of directors, is also a co-founder and
member of the board of directors of Global Blood Therapeutics, Inc. (“Global Blood”), and a member of the board of directors of
MyoKardia, Inc. (“MyoKardia”). In November 2012, we entered into Master Services Agreements with Global Blood and MyoKardia
under which we provide certain consulting, preclinical, laboratory and clinical research related services to each of these companies.
For the years ended December 31, 2014, 2013 and 2012, we recorded a reduction in research and development expense of $594,000,
$816,000 and $57,000, respectively, related to owed to us by Global Blood and Myokardia under the Master Services Agreements.

As of December 31, 2014 and 2013, receivables from these related parties in the amount of $40,000 and $394,000 , respectively, are
included in prepaid expenses and other current assets on the consolidated balance sheet.

17. Subsequent Events

In January 2015, the Compensation Committee of the Board approved for Portola’s named executive officers performance stock unit
(PSU) awards. Each PSU represents a contingent right to receive one share of the Company’s Common Stock. At any time over the
four years following the date of grant, half of the shares subject to each PSU will be earned when the average closing price of
Portola’s stock on the NASDAQ Global Select Market is above $50.00 per share for 45 consecutive trading days, and an additional
half of the shares will be earned when the average closing price of Portola’s stock is above $60 per share for 45 consecutive trading
days during such four year period. Any shares earned will then vest on the one year anniversary of the date such shares were earned,
subject to continuous service as of each such date.

18. Quarterly Financial Data

The following table presents certain unaudited quarterly financial information. This information has been prepared on the same basis
as the audited consolidated financial statements and includes all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the unaudited quarterly results of operations set forth herein.

Collaboration and license
revenue ...........................
Operating expenses ......... $
Net loss ........................... $
Net loss per share:

2014

2013

2,372 $

2,415 $

2,427 $

2,411

3,108 $

2,601 $

2,766 $ 2,056

(33,396) $
(30,726) $

(33,920 ) $ (38,204) $ (41,671)
(31,350 ) $ (35,793) $ (39,256)

$ (20,761) $
$ (18,142) $

(24,541 ) $
(21,598 ) $

(21,995) $(27,412)
(18,550) $(25,062)

Basic and diluted.... $

(0.75) $

(0.76 ) $

(0.86) $

(0.82)

(12.94) $

(1.47 ) $

(0.53) $

(0.63)

107

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports
under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations thereunder, is recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and
procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and 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 Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2014.
Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2014, our
disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements
for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our
assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance
with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial
Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in
“Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Our management concluded that our internal control over financial reporting was effective as of December 31,
2014.

Our independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of our internal control over
financial reporting as of December 31, 2014 as stated in their report which is included herein.

Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over
financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in
evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting identified in connection with the evaluation required by Rule
13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2014 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

108

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Portola Pharmaceuticals, Inc.

We have audited Portola Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2014, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). Portola Pharmaceuticals, Inc.’s management is responsible for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Portola Pharmaceuticals, Inc. maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of Portola Pharmaceuticals, Inc. as of December 31, 2014 and 2013, and the related consolidated
statements of operations, comprehensive income (loss), convertible preferred stock and stockholders' equity (deficit) and cash flows
for each of the three years in the period ended December 31, 2014 of Portola Pharmaceuticals, Inc. and our report dated March 2, 2015,
expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP
Redwood City, California
March 2, 2015

109

PART III

Certain information required by Part III is omitted from this annual report on Form 10-K and is incorporated herein by reference to our
definitive Proxy Statement for our 2015 Annual Meeting of Stockholders, or the Proxy Statement, which we intend to file pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended, within 120 days after December 31, 2013.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item concerning our directors is incorporated by reference to the information set forth in the sections
titled “Election of Directors” and “Corporate Governance” in our Proxy Statement. Information required by this item concerning our
executive officers is incorporated by reference to the information set forth in the section entitled “Executive Officers of the Company”
in our Proxy Statement. Information regarding Section 16 reporting compliance is incorporated by reference to the information set
forth in the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement.

Our written code of ethics applies to all of our directors and employees, including our executive officers, including without limitation
our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar
functions. The code of ethics is available on our website at http://www.portola.com in the Investors section under “Corporate
Governance.” Changes to or waivers of the code of ethics will be disclosed on the same website. We intend to satisfy the disclosure
requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver of, any provision of the code of ethics in the future
by disclosing such information on our website.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item regarding executive compensation is incorporated by reference to the information set forth in
the sections titled “Executive Compensation” in our Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by
reference to the information set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management” and
“Equity Compensation Plan Information” in our Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item regarding certain relationships and related transactions and director independence is
incorporated by reference to the information set forth in the sections titled “Certain Relationships and Related Party Transactions” and
“Election of Directors”, respectively, in our Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item regarding principal accountant fees and services is incorporated by reference to the information
set forth in the section titled “Principal Accountant Fees and Services” in our Proxy Statement.

110

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

(1) FINANCIAL STATEMENTS

Financial Statements—See Index to Financial Statements at Item 8 of this report.

(2) FINANCIAL STATEMENT SCHEDULES

Financial statement schedules have been omitted in this report because they are not applicable, not required under the
instructions, or the information requested is set forth in the consolidated financial statements or related notes thereto.

(b) Exhibits. The exhibits listed in the accompanying index to exhibits are filed as part of, or incorporated by reference into, this

report.

111

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of South San Francisco, State of
California, on the 2nd day of March 2015.

SIGNATURES

PORTOLA PHARMACEUTICALS, INC.

By:

/s/ WILLIAM LIS
William Lis
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William
Lis and Mardi C. Dier, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him or her, and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to
this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act
and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact
and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

/ S / WILLIAM LIS
William Lis

/ S / MARDI C. DIER
Mardi C. Dier

/ S / HOLLINGS C. RENTON
Hollings C. Renton

/ S / CHARLES J. HOMCY, M.D.
Charles J. Homcy, M.D.

/ S / JEFFREY W. BIRD, M.D., PH.D.
Jeffrey W. Bird, M.D., Ph.D.

/ S / LAURA BREGE
Laura Brege

/ S / JOHN H. JOHNSON
John H. Johnson

/ S / H. WARD WOLFF
H. Ward Wolff

Title

Date

Chief Executive Officer and Director
(Principal Executive Officer)

March 2, 2015

Chief Financial Officer (Principal
Financial and Accounting Officer)

March 2, 2015

Chairman of the Board of Directors

March 2, 2015

Director

112

Exhibit Number

Exhibit Description

EXHIBIT INDEX

Amended and Restated Certificate of Incorporation of Portola
Pharmaceuticals, Inc.

Incorporation By Reference

Form SEC File No. Exhibit

Filing Date

8-K

001-35935

3.1

5/28/2013

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

10.1

10.2+

10.3+

10.4+

10.5+

10.6

10.7†

10.8†

10.9†

10.10†

10.11†

Amended and Restated Bylaws of Portola Pharmaceuticals, Inc.

8-K

001-35935

Form of Common Stock Certificate of Portola Pharmaceuticals, Inc.

S-1 333-187901

Warrant to Purchase Shares of Series A Preferred Stock by and between
the registrant and General Electric Capital Corporation, dated January 21,
2005.

10-Q

001-35935

3.2

4.1

4.4

5/28/2013

5/17/2013

11/06/13

Warrant to Purchase Shares of Series B Preferred Stock by and between
the registrant and Hercules Technology Growth Capital, Inc., dated
September 29, 2006.

Warrant to Purchase Shares of Series B Preferred Stock by and between
the registrant and Comerica Incorporated, dated September 26, 2006.

Warrant to Purchase Shares of Common Stock by and between the
registrant and Laurence Shushan and Magdalena Shushan Acosta,
Trustees, The Laurence and Magdalena Shushan Family Trust, Under
Agreement Dated October 8, 1997, dated December 15, 2006.

Warrant to Purchase Shares of Common Stock by and between the
registrant and HCP Life Science Assets TRS, LLC, dated December 15,
2006.

Warrant to Purchase Shares of Common Stock by and between the
registrant and Bristow Investments, L.P., dated December 15, 2006.

Form of Indemnity Agreement between the Registrant and its directors
and officers.

Portola Pharmaceuticals, Inc. 2003 Equity Incentive Plan, as amended,
and Form of Stock Option Grant Notice, Option Agreement and Form of
Notice of Exercise.

Portola Pharmaceuticals, Inc. 2013 Equity Incentive Plan and Form of
Stock Option Agreement and Form of Stock Option Grant Notice
thereunder.

Form of Executive Severance Benefits Agreement (amends and restates
Form of 2006 Executive Change in Control Severance Benefits
Agreement)

10-Q

001-35935

4.5

11/06/13

10-Q

001-35935

4.6

11/06/13

10-Q

001-35935

4.7

11/06/13

10-Q

001-35935

4.8

11/06/13

10-Q

001-35935

4.9

11/06/13

S-1 333-187901

10.1

4/12/2013

S-1 333-187901

10.2

4/12/2013

S-1 333-187901

10.3

4/12/2013

10-Q

001-35935

10.4

8/06/2014

Amended Non-Employee Director Compensation Policy.

10-Q

001-35935

10.5

5/13/2014

Third Amended and Restated Investor Rights Agreement, dated as of
November 11, 2011, by and among the registrant and certain of its
stockholders.

License and Collaboration Agreement by and between the registrant and
Biogen Idec MA Inc., dated as of October 26, 2011.

License Agreement by and between the registrant and Millennium
Pharmaceuticals, Inc., dated as of August 4, 2004.

Asset Purchase Agreement by and between the registrant and Millennium
Pharmaceuticals, Inc., dated as of November 7, 2003.

Letter by and between the registrant and Millennium Pharmaceuticals,
Inc., dated as of December 6, 2005.

Second Amended and Restated License Agreement by and between the
registrant and Astellas Pharma, Inc., dated as of December 20, 2010.

S-1 333-187901

10.6

4/12/2013

S-1 333-187901

10.7

5/7/2013

S-1 333-187901

10.8

4/12/2013

S-1 333-187901

10.9

4/12/2013

S-1 333-187901

10.10

4/12/2013

S-1 333-187901

10.11

4/12/2013

113

Exhibit Description

Clinical Collaboration Agreement by and among the registrant, Bristol-
Myers Squibb Company and Pfizer Inc., dated as of October 16, 2012.

Lease by and between the registrant and Britannia Pointe Grand Limited
Partnership, dated as of December 15, 2006.

First Amendment to Lease by and between the registrant and Britannia
Pointe Grand Limited Partnership, dated as of May 21, 2010.

Offer Letter by and between the Registrant and William Lis, dated as of
April 29, 2008.

Offer Letter by and between the Registrant and John T. Curnutte, M.D.,
Ph.D., dated as of January 6, 2011.

Incorporation By Reference

Form SEC File No. Exhibit

Filing Date

S-1 333-187901

10.12

4/12/2013

S-1 333-187901

10.13

4/12/2013

S-1 333-187901

10.14

4/12/2013

S-1 333-187901

10.15

4/12/2013

S-1 333-187901

10.16

4/12/2013

Offer Letter by and between the Registrant and Mardi C. Dier, dated as of
July 28, 2006.

S-1 333-187901

10.17

4/12/2013

Portola Pharmaceuticals, Inc. 2013 Employee Stock Purchase Plan.

S-1 333-187901

10.19

4/12/2013

S-1 333-187901

10.20

4/12/2013

8-K

001-35935

10.22 3/19/2014

10-Q

001-35935

10.23 5/13/2014

10-Q

001-35935

10.24 11/10/2014

Master Contract Services Agreement for Preclinical and Clinical
Services by and between the Registrant and PPD Development, LP, dated
as of January 2, 2012, as amended by Amendment No.1 between the
registrant and PPD Development, LLC (formerly PPD Development, LP).

Second Amendment to Lease made and entered into as of the 14th day of
March 2014, by and between Portola Pharmaceuticals, Inc.
and Britannia Pointe Grand Limited Partnership.

First Amendment of the License and Collaboration Agreement made and
effective as of April 7, 2014 by and between Biogen Idec MA Inc. and
Portola Pharmaceuticals, Inc.

Commercial Supply (Manufacturing Services) Agreement between CMC
ICOS Biologics, Inc. and Portola Pharmaceuticals, Inc. effective as of
July 1, 2014.

Form of Restricted Stock Unit Award Grant Notice and Award
Agreement—2013 Equity Incentive Plan.

Form of Performance Stock Unit Award Grant Notice and Award
Agreement—2013 Equity Incentive Plan.

Consent of Independent Registered Public Accounting Firm.

Power of Attorney (see signature page).

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Principal Executive Officer and Principal Financial
Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of
1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.(1)
XBRL Instance Document. (2)
XBRL Taxonomy Extension Schema Document. (2)

Exhibit Number

10.12†

10.13

10.14

10.15

10.16

10.17

10.19

10.20

10.22

10.23†

10.24†

10.25+*

10.26+*

23.1*

24.1

31.1*

31.2*

32.1*

101.INS

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE
†

XBRL Taxonomy Extension Calculation Linkbase Document. (2)
XBRL Taxonomy Extension Definition Linkbase Document. (2)
XBRL Taxonomy Extension Label Linkbase Document. (2)
XBRL Taxonomy Extension Presentation Linkbase Document. (2)

Confidential Treatment Granted

114

+ Management contract or compensatory plan
*

Filed herewith

(1) This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange

Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-
K), irrespective of any general incorporation language contained in such filing.

(2) Pursuant to applicable securities laws and regulations, the Registrant is deemed to have complied with the reporting

obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-
fraud provisions of the federal securities laws as long as the Registrant has made a good faith attempt to comply with the
submission requirements and promptly amends the interactive data files after becoming aware that the interactive data
files fail to comply with the submission requirements. These interactive data files are deemed not filed or part of a
registration statement or report for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, are deemed
not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to
liability under these sections.

115

CorPor ATE InF ormATIon

mAnA gement teAm

corPor Ate informA tion

wILLIAm LIS
Chief Executive officer

John T. C urnuTTE, m.d ., Ph.d.
Executive vice President, research and development

mArdI C. dIEr
Executive vice President, Chief Financial officer

ALEXAndEr m. GoLd , m.d ., F.A.C.C.
Senior vice President, Clinical development

mArk w. GoSSETT
Senior vice President, Commercial

STACy mArkEL
Senior vice President, human resources

r. AndrE w rAmELmEIEr, Ph.d .
Senior vice President, biologics Technical operations

PETEr STrumPh
Senior vice President, Technical and Clinical operations

mIChELE d . bronS on, Ph.d.
vice President, Program management

JAnICE CASTILL o
vice President, regulatory Affairs

PAmELA C onLEy, Ph.d.
vice President, biology

JEET mAhAL
vice President, business development

AnJALI PAndE y, Ph.d.
vice President, Chemistry

BoArd of directors

JEFFrE y w. bIrd , m.d ., Ph.d.
managing director, Sutter hill ventures

LAurA brEGE
President and Chief Executive officer, nodality, Inc.

dEnnIS FEnT on, Ph.d.
owner and Chief Executive officer, Fenton and Associates

nIChoLAS G. GALAkAT oS, Ph.d.
Co-Founder and managing director, Clarus ventures

ChArLES J. homC y, m.d .
Former President and Chief Executive officer,
Portola Pharmaceuticals, Inc.

John h. JohnS on
Founder, Plum brook Advisors

wILLIAm LIS
Chief Executive officer, Portola Pharmaceuticals, Inc.

hoLLInGS C. rEnT on
Chairman of the board

h. wArd woLFF
Executive vice President and Chief Financial officer,
Sangamo bioSciences, Inc.

CorPor ATE CounSEL CooLEy LLP

3175 hanover Street
Palo Alto, CA 94304
Phone: 650.843.5000

IndEPEndEnT AudITorS

Ernst & young LLP
275 Shoreline drive, Suite 600
redwood City, CA 94065
Phone: 650.802.4500

InvESTor rELATIonS

Inquiries and requests for information, including copies of
Portola’s Annual report on Form 10-k may be obtained without
charge by contacting Investor relations or visiting our website.

Portola Pharmaceuticals Inc.
270 E. Grand Avenue
South San Francisco, CA 94080
Phone: 650.246.7000
Fax: 650.246.7376
Email: Ir@portola.com
www.portola.com

TrAnSFEr A GEnT

For any inquiries regarding lost stock certificates, address
changes, and changes of ownership or name in which shares are
held, please contact our transfer agent.

American Stock Transfer & Trust Company
6201 15th Avenue
brooklyn, ny 11219
www.amstock.com
Phone: 800.937.5449
Email: info@amstock.com

AnnuAL mEETInG

Tuesday, June 16, 10:00 Am PT
Portola Pharmaceuticals, Inc.
270 E. Grand Avenue
South San Francisco, CA 94080

This annual report contains forward-looking statements that include,
but are not limited to, statements regarding Portola’s business, clinical
development plans and regulatory processes for its product candidates,
anticipated growth in the market for anticoagulants, and the potential
efficacy, safety and activity of andexanet alfa, betrixaban and cerdulatinib.
risks that contribute to the uncertain nature of the forward-looking
statements include: the accuracy of Portola’s estimates regarding its
ability to initiate and/or complete its clinical trials; the success of Portola’s
clinical trials and the demonstrated efficacy of Portola’s product candidates
thereunder; the accuracy of Portola’s estimates regarding its expenses
and capital requirements; regulatory developments in the united States
and foreign countries; Portola’s ability to obtain and maintain intellectual
property protection for its product candidates; and the loss of key scientific
or management personnel. For a more detailed description of the risks
that impact these forward looking statements, please refer to the
company’s most recent filings with the Securities and Exchange Commission.
Portola undertakes no obligation to update these forward-looking statements.

InnovATIvE S CIEnCE . PATIEnT FoCuSEd.

270 E. Grand Avenue

South San Francisco, CA 94080

TEL 650.246.7000

FAX 650.246.7376

http://www. portola.com

twitter: @Portola_Pharma