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                                                                    EXHIBIT 99.1

                                   DYAX CORP.

         Important Factors That May Affect Future Operations and Results

                                   March 2002

In this Exhibit 99.1, "we," "us," "our" and "Dyax" refer to Dyax Corp. and its
subsidiaries.

From time to time, we may make forward-looking public statements, such as
statements concerning our then expected future revenues or earnings or our
projected plans for research and development programs and collaborations, as
well as other estimates relating to future operations. Forward-looking
statements may be in reports filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in press releases or informal statements made with
the approval of an authorized executive officer. In some cases, words or phrases
of expectation or uncertainty like "expect," "believe," "continue,"
"anticipate," "estimate," "may," "will," "could," "opportunity," "future,"
"project," or similar expressions identify "forward-looking statements" within
the meaning of Section 21E of the Exchange Act and Section 27A of the Securities
Act of 1933, as amended, as enacted by the Private Securities Litigation Reform
Act of 1995.

We caution you not to place undue reliance on these forward-looking statements,
which speak only as of the date on which they are made. In addition, we advise
you that the factors listed below, as well as other factors we have not
currently identified, could affect our financial or other performance and could
cause our actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods or events in any
forward-looking statement.

We will not undertake and specifically decline any obligation to publicly
release revisions to these forward-looking statements to reflect either
circumstances after the date of the statements or the occurrence of events which
may cause us to re-evaluate our forward-looking statements.

In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act, we are hereby filing cautionary statements identifying
important factors that could cause our actual results to differ materially from
those projected in forward-looking statements made by us or on our behalf.

WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT TO INCUR SIGNIFICANT ADDITIONAL
OPERATING LOSSES.

We have incurred operating losses since our inception in 1989. As of
December 31, 2001, we had an accumulated deficit of approximately $84.0 million.
We expect to incur substantial additional operating losses over the next several
years as our research, development, preclinical testing and clinical trial
activities increase. We have not commercialized any therapeutic products, either
ourselves or with others, that have generated revenues from final product sales,
and we do not expect any of our product candidates to generate significant
product revenues for

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the next several years. Even if our research and development efforts eventually
generate revenues from sales of therapeutic products, those revenues may not
fully offset the expenses of our efforts. In addition, obtaining regulatory
approvals to market therapeutic products is a long and arduous process and we
cannot predict when, if ever, we will receive such approvals. We generate
revenue from collaborators through research and development funding and through
license and maintenance fees that we receive in connection with the licensing of
our phage display technology. We expect to continue to be dependent upon revenue
generated from our collaborative arrangements and our licensing efforts over the
next several years.

To date, our chromatography separations products business has not been
profitable. For sales of our separations business to increase, we must expand
the market penetration of our existing products as well as develop new products,
which are still in the early stages of development.

To date, we have received revenues principally from:

-  sales of chromatography separations systems and products;

-  research and development funding received from our collaborators; and

-  milestone payments and signing and maintenance fees paid by licensees of our
   phage display technology.

To become profitable, we must:

-  fully develop and commercialize biopharmaceuticals;

-  establish additional collaborative arrangements; and

-  achieve greater market penetration for our chromatography separations
   products.

WE MAY BE UNABLE TO RAISE THE CAPITAL THAT WE WILL NEED TO SUSTAIN OUR
OPERATIONS.

We expect that our existing resources will be sufficient to fund our operations
through 2002. We may, however, need to raise additional funds before then. We
will need additional funds if our cash requirements exceed our current
expectations or if we generate less revenue than we expect.

Our future capital requirements will depend on many factors, including:

-  the progress of our drug discovery development program using phage display;

-  our ability to develop and commercialize our product candidates;

-  maintaining our existing collaborative and license arrangements and entering
   into additional ones;

-  the progress of the development and commercialization of milestone and
   royalty-bearing compounds by our collaborators and licensees;

-  sales of chromatography separations products;

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-  our decision to manufacture some of our products;

-  competing technological and market developments;

-  costs of defending our patents and other intellectual property rights; and

-  the amount and timing of additional capital equipment purchases.

We also may seek additional funding through collaborative arrangements and
public or private financings. We may not be able to obtain financing on
acceptable terms or at all or we may not be able to enter into additional
collaborative arrangements. In addition, the terms of any financing may
adversely affect the holdings or the rights of our stockholders. If we are
unable to obtain funding on a timely basis, we may be required to curtail
significantly one or more of our research or development programs. We also could
be required to seek funds through arrangements with collaborators or others that
may require us to relinquish rights to some of our technologies, product
candidates or products that we would otherwise pursue on our own.

OUR BIOPHARMACEUTICAL OR DIAGNOSTIC PRODUCT CANDIDATES MUST UNDERGO RIGOROUS
CLINICAL TRIALS AND REGULATORY APPROVALS, WHICH COULD SUBSTANTIALLY DELAY OR
PREVENT THEIR DEVELOPMENT OR MARKETING.

Any biopharmaceutical or diagnostic product we develop will be subject to
rigorous clinical trials and an extensive regulatory approval process
implemented by the Food and Drug Administration. This approval process is
typically lengthy and expensive, and approval is never certain. Positive results
from preclinical studies and early clinical trials do not ensure positive
results in late stage clinical trials designed to permit application for
regulatory approval. We may not be able to conduct clinical trials at preferred
sites, enroll sufficient patients or begin or successfully complete clinical
trials in a timely fashion, if at all.

We expect to enter into contractual arrangements with collaborators and third
parties to conduct clinical trials on our behalf. Any failure of these
collaborators or third parties to perform may delay or terminate the trials.

Because of the risks and uncertainties in biopharmaceutical development,
products that we or our collaborators develop could take a significantly longer
time to gain regulatory approval than we expect or may never gain approval. If
we or our collaborators do not receive these necessary approvals, we will not be
able to generate substantial product or royalty revenues and may not become
profitable. We and our collaborators may encounter significant delays or
excessive costs in our efforts to secure regulatory approvals. Factors that
raise uncertainty in obtaining these regulatory approvals include:

-  we must demonstrate through clinical trials that the proposed product is safe
   and effective for its intended use;

-  we have limited experience in conducting the clinical trials necessary to
   obtain regulatory approval; and

-  data obtained from preclinical and clinical activities are susceptible to
   varying interpretations, which could delay, limit or prevent regulatory
   approvals.

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Regulatory authorities may delay, suspend or terminate clinical trials at any
time if they believe that the patients participating in trials are being exposed
to unacceptable health risks or if they find deficiencies in the clinical trial
procedures. In addition, our or our collaborators' failure to comply with
applicable regulatory requirements may result in criminal prosecution, civil
penalties and other actions that could impair our ability to conduct our
business.

BECAUSE WE CURRENTLY LACK THE RESOURCES, CAPABILITY AND EXPERIENCE NECESSARY TO
MANUFACTURE BIOPHARMACEUTICALS, WE WILL DEPEND ON THIRD PARTIES TO PERFORM THIS
FUNCTION, WHICH MAY ADVERSELY AFFECT OUR ABILITY TO COMMERCIALIZE ANY
BIOPHARMACEUTICALS WE MAY DEVELOP.

We do not currently operate manufacturing facilities for the clinical or
commercial production of biopharmaceuticals. We also lack the resources,
capability and experience necessary to manufacture biopharmaceuticals. As a
result, we will depend on collaborators, partners, licensees and other third
parties to manufacture clinical and commercial scale quantities of our
biopharmaceuticals. If we enter into these types of third party arrangements,
then we will be dependent on the efforts of others, which if not successful
could result in decreased revenue to us.

Because our existing contract manufacturer is limited in its current ability to
produce products on a scale necessary for commercialization, we may incur
substantial expenses to contract with others to manufacture products or we may
experience delays in bringing larger scale facilities on line. To date we have
identified only a few facilities that are capable of producing material for
preclinical and clinical studies and we cannot assure you that they will be able
to supply sufficient clinical materials during the clinical development of our
product candidates. We will also be dependent on contract manufacturers to
produce and test any biopharmaceuticals that are approved for market.

WE LACK EXPERIENCE IN CONDUCTING CLINICAL TRIALS, REGULATORY PROCESSES, AND
CONDUCTING SALES AND MARKETING ACTIVITIES, ANY OR ALL OF WHICH MAY ADVERSELY
IMPACT OUR ABILITY TO COMMERCIALIZE ANY BIOPHARMACEUTICALS THAT WE MAY DEVELOP.

We have begun the process of hiring experienced clinical development,
regulatory, and marketing staff to develop and supervise clinical trials,
regulatory processes, and sales and marketing activities. However, we will
remain dependent upon third party contract research organizations to carry out
most of our clinical and preclinical research studies for the foreseeable
future. While we will seek to establish contracts with experienced, resourceful
contractors who can carry out these activities efficiently, effectively, and
quickly, we cannot assure that these third party contractors will perform as
expected and required. Any failure to perform adequately may cause delays in one
or more products and might lead to a failure to gain regulatory approval.

Similarly, we may be unable to enter into third party arrangements for the
marketing and sale of biopharmaceuticals on acceptable terms. For certain
products, we may incur substantial expenses to develop our own marketing and
sales force in order to commercialize our biopharmaceuticals and our efforts may
not be successful or the product may not be approved.

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As a result we may experience delays in the commercialization of our
biopharmaceuticals and we may be unable to compete effectively.

WE DEPEND ON THE EXPERTISE, EFFORT, PRIORITIES AND CONTRACTUAL OBLIGATIONS OF
OUR COLLABORATORS; ANY CHANGES IN OUR COLLABORATORS' BUSINESS DIRECTION OR
PRIORITIES OR DEFAULTS IN THEIR OBLIGATIONS MAY HAVE AN ADVERSE IMPACT ON OUR
RESEARCH REVENUES AND ULTIMATELY OUR LICENSE REVENUES AND EXPENSES.

We depend on the expertise, effort, priorities and contractual obligations of
our collaborators to realize revenues from our phage display technology.
However, our collaborators:

-  are not obligated under our collaborative arrangements to develop or market
   product candidates discovered using our phage display technology;

-  may pursue alternative technologies or develop competing products;

-  control many of the decisions with respect to research, clinical trials and
   commercialization of product candidates we discover or develop with them;

-  may terminate their collaborative arrangements with us under specified
   circumstances with short notice; and

-  may disagree with us as to whether a milestone or royalty payment is due
   under the terms of our collaborative arrangements.

The termination of a significant number of our existing collaborative
arrangements or our inability to enter into other collaborative arrangements
would reduce our research revenues and our potential for royalties and milestone
payments.

WE AND OUR COLLABORATORS MAY NOT BE ABLE TO GAIN MARKET ACCEPTANCE OF OUR
BIOPHARMACEUTICALS, WHICH COULD ADVERSELY AFFECT OUR REVENUES.

We cannot be certain that any of our biopharmaceutical candidates, even if
successfully approved, will gain market acceptance among physicians, patients,
healthcare payors, pharmaceutical manufacturers or others. We may not achieve
market acceptance even if clinical trials demonstrate safety and efficacy of our
biopharmaceutical and diagnostic products and the necessary regulatory and
reimbursement approvals are obtained. The degree of market acceptance of our
biopharmaceutical candidates will depend on a number of factors, including:

-  their clinical efficacy and safety;

-  their cost-effectiveness;

-  their potential advantage over alternative treatment methods;

-  their marketing and distribution support;

-  reimbursement policies of government and third-party payors; and

-  market penetration and pricing strategies of competing and future products.

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If our products do not achieve significant market acceptance, our revenues could
be adversely affected.

COMPETITION AND TECHNOLOGICAL CHANGE MAY MAKE OUR POTENTIAL PRODUCTS AND
TECHNOLOGIES LESS ATTRACTIVE OR OBSOLETE.

We compete with major pharmaceutical and biotechnology companies that are
pursuing forms of treatment or prevention for the diseases that we target. Many
of our competitors have substantially greater financial and other resources than
we do and are conducting extensive research and development activities. Other
companies may succeed in developing products earlier than we do, obtaining
regulatory approval for products more rapidly than we do, or developing products
that are more effective or less costly than those we develop.

For our DX-88 product candidate, our competitors for the treatment of
hereditary angiodema (HAE) include Aventis Behring and Baxter Healthcare,
which currently market plasma-derived C1 esterase inhibitor products, which
are approved for the treatment of HAE in Europe. In addition, other
competitiors would be companies seeking to develop recombinant C1 inhibitors,
and companies that market and develop corticosteroid drugs or other
anti-inflammatory compounds. Bayer currently markets aprotinin, which is
indicated for reduction of blood loss in patients undergoing cardiopulmonary
bypass during cardiopulmonary bypass graft surgery. A number of companies,
including Alexion, are developing additional products to reduce the
complications of cardiopulmonary bypass.

For our DX-890 product candidate, our competitors in the development of
treatments for cystic fibrosis include Genentech, Genzyme, Xoma and Biogen. A
number of other companies are also developing neutrophil elastase inhibitors
for broader indications. These include Inhale Therapeutic Systems, Aventis,
Medea Research, Cortech, Inc., Roche, Ono, Eli Lilly, Lexin, SuperGen,
Teijin, GlaxoSmithkline, Arriva, Sanofi-Synthelabo, and Ivax.

For potential oncology product candidates coming out of our biopharmaceutical
discovery and development programs, competitors could include Bristol-Meyers
Squibb, Pfizer, GlaxoSmithkline, Genentech, Pharmacia, Wyeth and numerous
other pharmaceutical and biotechnology companies.

In addition, most large pharmaceutical companies seek to develop orally
available small molecule compounds against many of the targets for which we and
others are seeking to develop protein, peptide, and/or antibody products.

Our phage display technology is one of several technologies available for use in
drug discovery. The primary technologies that compete with our phage display
technology include combinatorial chemistry, single target high throughput
screening and hybridoma technology. Our business depends significantly on the
competitive position of phage display technology. If competing technologies
obtain broader market acceptance or technologies superior to phage display are
developed, our business would be adversely affected. We are aware of several
pharmaceutical and biotechnology companies that use in their operations
combinatorial chemistry, single target high throughput screening or peptide,
antibody technologies to identify molecules that bind to a desired target. In
addition, a number of companies are in the business of providing access to these
technologies and performing research for other companies. For example, our
patent

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licensees, Cambridge Antibody Technology Group plc, Morphosys AG and Crucell
provide research services in the field of phage display. In addition, these four
companies, as well as Abgenix, Inc., Medarex, Inc., Genmab and Protein Design
Labs, Inc. provide antibody services. Biosite Diagnostics, Inc., also a licensee
of ours, has partnered with Medarex, Inc. to combine phage display technology
with transgenic mouse technology to create antibody libraries derived from the
RNA of immunized mice. Other companies, including, Phylos, Diversys and Novagen,
are also attempting to develop new antibody engineering technology.

In addition, we may experience competition from companies that have acquired or
may acquire technology from universities and other research institutions. As
these companies develop their technologies, they may develop proprietary
positions which may prevent us from successfully commercializing our products.

Our chromatography separations business competes in mature markets with
several companies that manufacture, market and sell chromatography
separations and purification systems. We face active competition from other
suppliers of separations products. The principal competitors in our existing
product markets include Nova Sep, Isco, Inc. and Gilson, Inc., some of which
also have long-term relationships with our existing customers. Our principal
competitor in the chromatography separations system and cartridge market is
Isco, Inc. In addition, many therapeutic and diagnostic product manufacturers
have traditionally assembled their own chromatography systems. As a result,
any future innovative separations products that we develop may not become
accepted in the marketplace.

OUR SUCCESS DEPENDS SIGNIFICANTLY UPON OUR ABILITY TO OBTAIN AND MAINTAIN
INTELLECTUAL PROPERTY PROTECTION FOR OUR PRODUCTS AND TECHNOLOGIES.

We face risks and uncertainties related to our intellectual property rights. For
example:

-  we may be unable to obtain or maintain patent or other intellectual property
   protection for any products or processes that we may develop;

-  third parties may obtain patents covering the manufacture, use or sale of
   these products, which may prevent us from commercializing any of our products
   under development globally or in certain regions; or

-  our patents or any future patents that we may obtain may not prevent other
   companies from competing with us by designing their products or conducting
   their activities so as to avoid the coverage of our patents.

Our phage display patent rights are central to our non-exclusive patent
licensing program. As part of that licensing program, we generally seek to
negotiate a phage display license agreement with parties practicing technology
covered by our patents. In countries where we do not have and/or have not
applied for phage display patent rights, we will be unable to prevent others
from using phage display or developing or selling products or technologies
derived using phage display. In addition, in jurisdictions where we have phage
display patent rights, we may be unable to prevent others from selling or
importing products or technologies derived elsewhere using phage display. Any
inability to protect and enforce our phage display patent rights,

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whether by licensing or any invalidity of our patents or otherwise, would
negatively affect our research and revenues.

In all of our activities, we also rely substantially upon proprietary materials,
information, trade secrets and know-how to conduct our research and development
activities and to attract and retain collaborators, licensees and customers.
Although we take steps to protect our proprietary rights and information,
including the use of confidentiality and other agreements with our employees and
consultants and in our academic and commercial relationships, these steps may be
inadequate, these agreements may be violated, or there may be no adequate remedy
available for a violation. Also, our trade secrets or similar technology may
otherwise become known to, or be independently developed or duplicated by, our
competitors.

Other parties have patents and pending applications to various products and
methods related to phage display and may obtain additional patents in the
future. From time to time we learn of issued patents which may cover our product
development activities as well as commercialization of potential future
products. To date, we have filed oppositions against two European patents in the
general field of phage display. In the first of these oppositions, the
Opposition Division revoked a patent issued to Acambis Research Limited. An
appeal of this decision is pending. In the second opposition, the Opposition
Division maintained a patent issued to CAT. We intend to appeal that decision.
We do not believe these European patents cover any of our present activities,
but we cannot predict whether the claims in these patents may, in their current
or future form, cover our future activities or the activities of our
collaborators and licensees. We may file other oppositions in the future.

Before we and our collaborators can market some of our processes or products, we
and our collaborators may need to obtain licenses from other parties who have
patent or other intellectual property rights covering those processes or
products. There are several companies that have patents relating to phage
display, including for example, Applied Molecular Evolution, Biosite, Xoma,
Morphosys, CAT and Genentech. Third party patent owners may contend that we need
a license or other rights under their patents in order for us to commercialize a
process or product. In order for us to commercialize a process or product, we
may need to license the patent rights of other parties. We are aware of certain
patents for which we may need to obtain licenses to commercialize some of our
products and technologies. If a third party does not offer us a needed license
or offers us a license only on terms that are unacceptable, we may be unable to
commercialize one or more of our products. If a third party does not offer a
needed license to our collaborators and as a result our collaborators stop work
under the agreement, we might lose future milestone payments and royalties. If
we decide not to seek a license, or if licenses are not available on reasonable
terms, we may become subject to infringement claims or other legal proceedings,
which could result in substantial legal expenses. If we are unsuccessful in
these actions, adverse decisions may prevent us from commercializing the
affected process or products.

We seek affirmative rights of license or ownership under existing patent rights
relating to phage display technology of others. For example, through our patent
licensing program, we have secured a limited freedom to practice some of these
patent rights pursuant to our standard license agreement, which contains a
covenant by the licensee that it will not sue us under certain of the

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licensee's phage display improvement patents. We cannot guarantee, however, that
we will be successful in enforcing any agreements from our licensees, including
agreements not to sue under their phage display improvement patents, or in
acquiring similar agreements in the future, or that we will be able to obtain
commercially satisfactory licenses to the technology and patents of others. If
we cannot obtain and maintain these licenses and enforce these agreements, this
could have a negative effect on our business.

PROCEEDINGS TO OBTAIN, ENFORCE OR DEFEND PATENTS AND TO DEFEND AGAINST CHARGES
OF INFRINGEMENT ARE TIME CONSUMING AND EXPENSIVE ACTIVITIES. UNFAVORABLE
OUTCOMES IN THESE PROCEEDINGS COULD LIMIT OUR PATENT RIGHTS AND OUR ACTIVITIES,
WHICH COULD MATERIALLY AFFECT OUR BUSINESS.

Obtaining, protecting and defending against patent and proprietary rights can be
expensive. For example, if a competitor files a patent application claiming
technology also invented by us, we may have to participate in an expensive and
time-consuming interference proceeding before the U.S. Patent and Trademark
Office to address who was first to invent the subject matter of the claim and
whether that subject matter was patentable. Moreover, an unfavorable outcome in
an interference proceeding could require us to cease using the technology or to
attempt to license rights to it from the prevailing party. Our business would be
harmed if a prevailing third party does not offer us a license on terms that are
acceptable to us.

In patent offices outside the United States, we may be forced to respond to
third party challenges to our patents. For example, two companies filed
oppositions in late 1997 against the only phage display patent that the European
Patent Office issued to us to date. A hearing on these oppositions was held
April 6, 2000 and our patent was revoked. We have appealed this decision to the
European Patent Office's Technical Board of Appeals. This appeal suspends the
Opposition Division's decision and reinstates our patent pending the decision of
the Technical Board. Although we will be able to enforce this patent during the
appeal, any infringement action we file will likely be stayed pending the
results of the appeal. Oral proceedings are scheduled before the Technical Board
in our appeal on July 2, 2002. The decision of the Technical Board will be
final. We also have two other patent applications related to our phage display
technology pending in the European Patent Office. During the continued
prosecution of these applications, the Examining Division will consider the
grounds on which the Opposition Division revoked our first patent taken together
with the Technical Board's decision on our appeal. We may not be successful in
overturning the Opposition Division's decision or in obtaining allowance of our
other patent applications. We will not be able to prevent other parties from
using our phage display technology in Europe if we are not successful in the
reinstatement of our first European patent or if the European Patent Office does
not grant us another patent that we can maintain after any opposition.

We may need to resort to litigation to enforce any patent issued to us. Third
parties may assert that we are employing their proprietary technology without
authorization. In addition, third parties may have or obtain patents in the
future and claim that the use of our technology infringes these patents. For
example, we are engaged in a United States court proceeding brought by George
Pieczenik and I.C. Technologies America, Inc. alleging infringement of three
patents. A claim construction hearing was held on December 13, 2001. We are
awaiting a decision. After

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the court construes the claim asserted against us by the plaintiffs, the
court will determine whether or not our activities infringe these claims and
if these claims are valid and enforceable. We could incur substantial costs
in connection with any litigation or patent proceeding and our management's
efforts would be diverted, regardless of the results of the litigation. An
unfavorable result could subject us to significant liabilities to third
parties, require us to cease manufacturing or selling the affected products
or using the affected processes, require us to license the disputed rights
from third parties or result in awards of substantial damages against us. Our
business will be harmed if we cannot obtain a license, can obtain a license
only on terms we consider to be unacceptable or if we are unable to redesign
our products or processes to avoid infringement.

OUR REVENUES AND OPERATING RESULTS HAVE FLUCTUATED SIGNIFICANTLY IN THE PAST,
AND WE EXPECT THIS TO CONTINUE IN THE FUTURE.

Our revenues and operating results have fluctuated significantly on a quarter to
quarter basis. We expect these fluctuations to continue in the future.
Fluctuations in revenues and operating results will depend on:

-  the timing of our increased research and development expenses;

-  the establishment of new collaborative and licensing arrangements;

-  the timing and results of clinical trials;

-  the development and marketing programs of current and prospective
   collaborators;

-  the completion of certain milestones; and

-  the timing of customer purchases of larger separations equipment systems.

If the revenues we receive are less than the revenues we expect for a given
fiscal period, then we may be unable to reduce our expenses quickly enough to
compensate for the shortfall. Our revenues in any period are not a reliable
indicator of our future performance. In addition, our fluctuating revenues and
operating results may fail to meet the expectations of securities analysts or
investors. Our failure to meet these expectations may cause the price of our
common stock to decline.

IF WE LOSE OR ARE UNABLE TO HIRE AND RETAIN QUALIFIED PERSONNEL, THEN WE MAY NOT
BE ABLE TO DEVELOP OUR PRODUCTS OR PROCESSES.

We are highly dependent on qualified scientific and management personnel, and we
face intense competition from other companies and research and academic
institutions for qualified personnel. If we lose an executive officer, a manager
of one of our principal business units or research programs, or a significant
number of any of our staff or are unable to hire and retain qualified personnel,
then our ability to develop and commercialize our products and processes may be
delayed or prevented. We do not have employment agreements with any of our key
employees other than Robert Ladner, Scott Chappel and Stephen Galliker. We do
not maintain key-man life insurance with respect to any employees and we do not
intend to obtain such insurance.

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WE MAY ENCOUNTER DIFFICULTIES IN MANAGING OUR GROWTH.

We may be unable to manage our growth and expansion, and our failure to do so
may slow our growth rate or give rise to inefficiencies that would increase our
losses. Our ability to manage our operations and growth effectively depends upon
the continual improvement of our operational, financial and management controls,
reporting systems and procedures.

WE CURRENTLY DEPEND ON ONE SUPPLIER FOR A KEY COMPONENT IN OUR SEPARATIONS
PRODUCTS, AND IF WE LOSE THAT SUPPLIER WE COULD EXPERIENCE DELAYS IN THE
PRODUCTION AND SHIPMENT OF OUR SEPARATIONS PRODUCTS, WHICH WOULD ADVERSELY
IMPACT OUR SEPARATIONS PRODUCT SALES REVENUES.

We manufacture our chromatography separations products using compounds and
separations media manufactured by third parties. We currently purchase a
significant percentage of the silica that we use as separations media in our
prepacked disposable separations cartridges and other separations products from
Chemie Uetikon, a major bulk producer of silica located in Zurich, Switzerland.
While we have arranged to obtain separations media from alternative sources of
supply at prices and on terms and conditions substantially similar to those in
the agreement with our current supplier, any interruption in our source of
supply could slow production and delay shipments to our customers, which would
adversely impact our separations product sales revenues. To date, we have not
experienced any major difficulties in obtaining commercial quantities of
separations media from any of our current suppliers.

WE USE AND GENERATE HAZARDOUS MATERIALS IN OUR BUSINESS, AND ANY CLAIMS RELATING
TO THE IMPROPER HANDLING, STORAGE, RELEASE OR DISPOSAL OF THESE MATERIALS COULD
BE TIME-CONSUMING AND EXPENSIVE.

Our development and manufacture of chromatography separations systems and
products involves the controlled storage, use and disposal of hazardous
materials and chemicals. Our phage display research and development also
involves the controlled storage, use and disposal of chemicals and solvents, as
well as biological materials. We are subject to foreign, federal, state and
local laws and regulations governing the use, manufacture and storage and the
handling and disposal of materials and waste products. Although we believe that
our safety procedures for handling and disposing of these hazardous materials
comply with the standards prescribed by laws and regulations, we cannot
completely eliminate the risk of contamination or injury from hazardous
materials. If an accident occurs, an injured party could seek to hold us liable
for any damages that result and any liability could exceed the limits or fall
outside the coverage of our insurance. We may not be able to maintain insurance
on acceptable terms, or at all. We may incur significant costs to comply with
current or future environmental laws and regulations.

WE MAY HAVE SIGNIFICANT PRODUCT LIABILITY EXPOSURE.

We face exposure to product liability and other claims if products or processes
are alleged to have caused harm. These risks are inherent in the testing,
manufacturing and marketing of human therapeutic products. Although we currently
maintain product liability insurance, we may not have sufficient insurance
coverage, and we may not be able to obtain sufficient coverage at a

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reasonable cost. Our inability to obtain product liability insurance at an
acceptable cost or to otherwise protect against potential product liability
claims could prevent or inhibit the commercialization of any products that we or
our collaborators develop. We also have liability for products manufactured by
us on a contract basis for third parties. If we are sued for any injury caused
by our products or processes, then our liability could exceed our product
liability insurance coverage and our total assets.

OUR BUSINESS IS SUBJECT TO RISKS ASSOCIATED WITH INTERNATIONAL SALES AND
OPERATIONS AND COLLABORATIONS.

Since we sell our products worldwide, our business is subject to risks
associated with doing business internationally. Product revenues from the
conduct of business in the United Kingdom are received in pounds sterling and
represented 29% of our total product revenues in 2001. We anticipate that
revenues from our international operations will continue to represent a portion
of our total revenues. Accordingly, our future results could be harmed by the
effect of and compliance with foreign laws and regulations.

The laws of foreign countries do not protect our intellectual property rights to
the same extent as do the laws of the United States. In countries where we do
not have and/or have not applied for patents on our products, we will be unable
to prevent others from developing or selling similar products. In addition, in
jurisdictions outside the United States where we have phage display patent
rights, we may be unable to prevent unlicensed parties from selling or importing
products or technologies derived elsewhere using phage display.

Until we or our licensees obtain the required regulatory approvals for
biopharmaceuticals identified using phage display in any specific foreign
country, we or our licensees will be unable to sell these products in that
country. International regulatory authorities have imposed numerous and varying
regulatory requirements and the approval procedures can involve additional
testing. Approval by one regulatory authority does not ensure approval by any
other regulatory authority.

WE MAY NOT SUCCEED IN ACQUIRING TECHNOLOGY AND INTEGRATING COMPLEMENTARY
BUSINESSES.

We may acquire additional technology and complementary businesses in the future.
Acquisitions involve many risks, any one of which could materially harm our
business, including:

-  the diversion of management's attention from core business concerns;

-  the failure to exploit effectively acquired technologies or integrate
   successfully the acquired businesses;

-  the loss of key employees from either our current business or any acquired
   businesses; and

-  the assumption of significant liabilities of acquired businesses.

We may be unable to make any future acquisitions in an effective manner. In
addition, the ownership represented by the shares of our common stock held by
you will be diluted if we issue equity securities in connection with any
acquisition. If we make any significant acquisitions

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using cash consideration, we may be required to use a substantial portion of our
available cash. If we issue debt securities to finance acquisitions, then the
debtholders would have rights senior to the holders of shares of our common
stock to make claims on our assets and the terms of any debt could restrict our
operations, including our ability to pay dividends on our shares of common
stock. Acquisition financing may not be available on acceptable terms, or at
all. In addition, we may be required to amortize significant amounts of
intangible assets in connection with future acquisitions. We might also have to
recognize significant amounts of goodwill that will have to be tested
periodically for impairment. These amounts could be significant, which could
harm our operating results.

OUR COMMON STOCK MAY CONTINUE TO HAVE A VOLATILE PUBLIC TRADING PRICE AND LOW
TRADING VOLUME.

The market price of our common stock has been highly volatile. Since our initial
public offering in August 2000 through February 2002, the price of our common
stock on the Nasdaq National Market has ranged between $54.125 and $4.76.

The market has experienced significant price and volume fluctuations for reasons
unrelated to our operating performance.

Many factors may have a negative effect on the market price of our common stock,
including:

-  public announcements by us, our competitors or others;

-  developments concerning proprietary rights, including patents and litigation
   matters;

-  publicity regarding actual or potential results with respect to products or
   compounds we or our collaborators are developing;

-  regulatory developments in both the United States and abroad;

-  public concern about the safety or efficacy of new technologies;

-  general market conditions and comments by securities analysts; and

-  quarterly fluctuations in our revenues and financial results.

ANTI-TAKEOVER PROVISIONS IN OUR GOVERNING DOCUMENTS AND UNDER DELAWARE LAW AND
OUR SHAREHOLDER RIGHTS PLAN MAY MAKE AN ACQUISITION OF US MORE DIFFICULT.

We are incorporated in Delaware. We are subject to various legal and contractual
provisions that may make a change in control of us more difficult. Our board of
directors has the flexibility to adopt additional anti-takeover measures.

Our charter authorizes our board of directors to issue up to 1,000,000 shares of
preferred stock and to determine the terms of those shares of stock without any
further action by our stockholders. If the board of directors exercises this
power to issue preferred stock, it could be more difficult for a third party to
acquire a majority of our outstanding voting stock. Our charter also provides
staggered terms for the members of our board of directors. This may prevent

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stockholders from replacing the entire board in a single proxy contest, making
it more difficult for a third party to acquire control of us without the consent
of our board of directors. Our equity incentive plans generally permit our board
of directors to provide for acceleration of vesting of options granted under
these plans in the event of certain transactions that result in a change of
control. If our board of directors used its authority to accelerate vesting of
options, then this action could make an acquisition more costly, and it could
prevent an acquisition from going forward.

Our shareholder rights plan could result in the significant dilution of the
proportionate ownership of any person that engages in an unsolicited attempt to
take over our company and, accordingly, could discourage potential acquirors.

Section 203 of the Delaware General Corporation Law prohibits a corporation from
engaging in a business combination with any holder of 15% or more of its capital
stock until the holder has held the stock for three years unless, among other
possibilities, the board of directors approves the transaction. Our board of
directors could use this provision to prevent changes in management.

The provisions described above, as well as other provisions in our charter and
bylaws and under the Delaware General Corporation Law, may make it more
difficult for a third party to acquire our company, even if the acquisition
attempt was at a premium over the market value of our common stock at that time.

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