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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission file number:
    001-34637
 ANTHERA PHARMACEUTICALS,
    INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

20-1852016(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)25801 Industrial Boulevard, Suite B
    Hayward, California(Address of Principal
    Executive Offices)

94545(Zip Code)   (510) 856-5600
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K FORM 10-K FORM 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company þ   Rule 12b-2 o þ




---



##### 





ANTHERA
    PHARMACEUTICALS, INC.
  FORM 10-K
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
  INDEX
   
 PagePART IItem 1.

Business


4Item 1A.

Risk Factors


37Item 1B.

Unresolved Staff Comments


57Item 2.

Properties


57Item 3.

Legal Proceedings


57Item 4.

Removed and Reserved


57PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters, and Issuer Purchases of Equity
    Securities


58Item 6.

Selected Financial Data


60Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


61Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


70Item 8.

Financial Statements and Supplementary Data


70Item 9.

Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


70Item 9A.

Controls and Procedures


70Item 9B.

Other Information


71PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


72Item 11.

Executive Compensation


75Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


92Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


96Item 14.

Principal Accountant Fees and Services


99PART IVItem 15.

Exhibits and Financial Statement Schedules


101SIGNATURES


129EX-10.41EX-10.42EX-14.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  This Annual Report on
    Form 10-K,
    including the section entitled Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations, contains forward-looking statements regarding
    future events and our future results that are subject to the
    safe harbors created under the Securities Act of 1933, as
    amended (the Securities Act), and the Securities
    Exchange Act of 1934, as amended (the Exchange Act).
    Forward-looking statements relate to future events or our future
    financial performance. We generally identify forward-looking
    statements by terminology such as may,
    will, would, should,
    expects, plans, anticipates,
    could, intends, target,
    projects, contemplates,
    believes, estimates,
    predicts, assume, intend,
    potential, continue or other similar
    words or the negative of these terms. These statements are only
    predictions. We have based these forward-looking statements
    largely on our current expectations and projections about future
    events and financial trends that we believe may affect our
    business, financial condition and results of operations. The
    outcome of the events described in these forward-looking
    statements is subject to risks, uncertainties and other factors
    described in Risk Factors and elsewhere in this
    report. Accordingly, you should not place undue reliance upon
    these forward-looking statements. We cannot assure you that the
    events and circumstances reflected in the forward-looking
    statements will be achieved or occur, the timing of events and
    circumstances and actual results could differ materially from
    those projected in the forward looking statements.
    Forward-looking statements contained in this report include, but
    are not limited to, statements about:
  
    the progress of, timing of and amount of expenses associated
    with our research, development and commercialization
    activities;
    the timing, conduct and success of our clinical studies for
    our product candidates;
    our ability to obtain U.S. and foreign regulatory
    approval for our product candidates and the ability of our
    product candidates to meet existing or future regulatory
    standards;
    our expectations regarding federal, state and foreign
    regulatory requirements;
    the therapeutic benefits and effectiveness of our product
    candidates;
    the accuracy of our estimates of the size and characteristics
    of the markets that may be addressed by our product
    candidates;
    our ability to manufacture sufficient amounts of our product
    candidates for clinical studies and products for
    commercialization activities;
    our intention to seek to establish strategic collaborations
    or partnerships for the development or sale of our product
    candidates;
    our expectations as to future financial performance, expense
    levels and liquidity sources;
    the timing of commercializing our product candidates;
    our ability to compete with other companies that are or may
    be developing or selling products that are competitive with our
    product candidates;
    anticipated trends and challenges in our potential
    markets;
    our ability to attract and retain key personnel; and
    other factors discussed elsewhere in this report.  The forward-looking statements made in this report relate
    only to events as of the date on which the statements are made.
    We have included important factors in the cautionary statements
    included in this report, particularly in the section entitled
    Risk Factors that we believe could cause actual
    results or events to differ materially from the forward-looking
    statements that we make. Our forward-looking statements do not
    reflect the potential impact of any future acquisitions,
    mergers, dispositions, joint ventures or investments we may
    make. Except as required by law, we do not assume any intent to
    update any forward-looking statements after the date on which
    the statement is made, whether as a result of new information,
    future events or circumstances or otherwise.
 3




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  Unless the context otherwise requires, we use the terms
    Anthera Pharmaceuticals, Anthera,
    we, us, the Company and
    our in this report to refer to Anthera
    Pharmaceuticals, Inc. and its sole subsidiary. We use various
    trademarks, service marks and trade names in our business,
    including without limitation Anthera Pharmaceuticals
    and Anthera. This report also contains trademarks,
    services marks and trade names of other businesses that are the
    property of their respective holders.
  Overview
  A-623 A-001. A-001, 2 2 2 A-623,
  (510) 856-5600.
  Summary
    of Product Development Programs
  
 4




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##### Table of Contents



2
  Inflammation
    and Diseases
    Our
    sPLA2
    Inhibition Portfolio
  2 2 2 2 2
  A-001), 2
  A-001, 2 A-001.
  2 2 A-003, A-001 A-003 A-003
  A-001 2
 5




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##### Table of Contents



A-001
  sPLA2
    Biology
  2 2 2 2
  2 2 2 2
  2 2 2 2
  2 2 2 2 2 2 2 2 2
  
    is synergistic with HMG-CoA reductase inhibitors, or statins,
    including Lipitor (atorvastatin), in reducing LDL-C, total
    cholesterol and non-HDL cholesterol in patients with CAD;
    lowers circulating small, dense and pro-atherogenic, or
    plaque-building LDL-C particles, while
    Lp-PLA2
    inhibition has not demonstrated similar effects;
    has been shown to lower CRP, a well-established marker of
    inflammation in a statistically significant manner; and
    reduces plaque volume and aneurysms in standard rodent models of
    atherosclerosis and has demonstrated synergistic reductions of
    plaque volume in standard rodent models of atherosclerosis when
    used in combination with statins. 6




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2 2 2 2
  2
  Our
    BAFF Antagonism Portfolio
  A-623, A-623 A-623,
  A-623 A-623
  
    convenient, at-home, patient-administered subcutaneous dosing
    with a range of dosing frequencies including monthly and weekly;
    the ability to inhibit the activity of both membrane-bound and
    soluble BAFF;
    selective modulation and reduction of relevant B-cell
    sub-types in
    lupus patients;
    a novel molecular structure, which may confer differentiating
    pharmacokinetic and pharmacodynamic characteristics, potentially
    providing efficacy and dosing benefits, as well as manufacturing
    benefits and lower cost of goods based on a bacterial
    fermentation manufacturing process; and
    multiple binding domains achieve highest reported affinity for
    inhibition of BAFF. 7




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##### Table of Contents



Product
    Development Programs
    WorldwideDevelopment

ProductProduct Candidate

Phase

Rights

Description

Next Milestone(s)Lead Development ProgramsVarespladib with Lipitor (atorvastatin)

Phase 3

Anthera(1)

   Orally administered
    sPLA2
    inhibitor
       Target indication for the prevention of
    secondary MACE following an acute coronary syndrome
    (16-week
    treatment)

   Biomarker analysis on independent
    markers of cardiovascular risk
       Data Safety Monitoring Board, or DSMB,
    review of clinical data
       Interim efficacy review of MACEA-623

Phase 2b

Anthera

   Selective subcutaneous administered
    dual action peptibody antagonist of soluble and
    membrane bound BAFF cytokine
       Being developed for the treatment of
    B-cell mediated autoimmune diseases
       Target indication for lupus

   Completion of technology transfer to
    contract manufacturer
       Establish comparability plan with U.S.
    FDA
       Initiation of Phase 3 manufacturing
    campaignAdditional ProgramsA-001-varespladib
    sodium

Phase 2

Anthera(1)

   Intravenous
    sPLA2
    inhibitor with orphan drug and fast track status
       Indicated for prevention of acute chest
    syndrome in hospitalized patients with sickle cell disease

   Publish final impacts dataA-623

Phase 2

Anthera

   Selective subcutaneous administered
    antagonist of soluble and membrane bound BAFF for the treatment
    of B-cell mediated disease e.g. Sjogrens syndrome or small
    vessel vasculitis or transplant rejection

   Submit orphan product protocol to U.S.
    FDA     (1)
    
    Shionogi & Co., Ltd. retains product rights in Japan    Varespladib
  A-001, 2
 8




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##### Table of Contents



2 A-001,
  Market
    Opportunity  Acute Coronary Syndrome
          Inflammation
    in Cardiovascular Disease
  2
 9




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##### Table of Contents



LDL-C
    in Cardiovascular Disease
      2
 10




---



##### Table of Contents



2
  Pivotal
    VISTA-16 Study  Acute Coronary Syndrome
    2
       11




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##### Table of Contents



Components
    of VISTA-16 Primary (MACE) Endpoint
  
    Cardiovascular Death
    Non-Fatal Myocardial Infarction
    Non-Fatal Stroke
    Documented UA with Objective Evidence of Ischemia Requiring
    Hospitalization  2
  Historical
    Clinical Studies
  Phase 2b
    Acute Coronary Syndrome Study  FRANCIS (Fewer
    Recurrent Acute coronary events with Near-term Cardiovascular
    Inflammation Suppression)
    > > > < < Follow-up
    
    changes in established markers of inflammation such as
    sPLA2,
    CRP and IL-6; and
    the occurrence of secondary MACE (for purposes of this clinical
    study, all-cause mortality, non-fatal myocardial infarction,
    documented UA requiring urgent hospitalization,
    revascularization occurring > 60 days
    post the index event or non-fatal stroke).   12




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2
  2 2 A-001 2
             13




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##### Table of Contents



Phase 2
    Stable Coronary Artery Disease Study  PLASMA
    (Phospholipase Levels and Serological Markers of
    Atherosclerosis): Varespladib Twice-Daily Versus
    Placebo
  2
  2
  2
  2 2
      Phase 2
    Stable Coronary Artery Disease Study  PLASMA-2
    (Phospholipase Levels and Serological Markers of Atherosclerosis
    -2): Once-Daily of Varespladib Versus Placebo
   14




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##### Table of Contents



2
  2 2 2 24-hour
        LDL


Total


Non-HDL


OxidizedsPLA2


Cholesterol


Cholesterol


Cholesterol


LDL-CPLASMA


81.9
%


9.7
%


4.9
%


7.2
%


5.4
%(All doses varespladib)


(p < 0.0001
)


(p = 0.0035
)


(p = 0.0069
)


(p = 0.0009
)


(p = 0.0065
)PLASMA-2


86.1
%


13.9
%


9.2
%


14.2
%


7.3
%(500 mg varespladib)*


(p < 0.0001
)


(p = 0.0007
)


(p = 0.0006
)


(p = 0.0001
)


(pNS
)()     *
    
    Dose selected for Phase 3
    
    Probability not significant  Investigator-Sponsored
    Phase 2 Percutaneous Intervention Study  SPIDER-PCI
    (sPLA2 )
    Inhibition to Decrease Enzyme Release After PCI): Varespladib
    Once-Daily Versus Placebo for up to 10 Days.
  2 2 follow-up. 2
  2
 15




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Previous
    Experience at Eli Lilly and Shionogi & Co.,
    Ltd.
  A-001 A-001 A-001
    Non-Clinical
    Studies with Varespladib and
    A-001
  A-001,
  A-623
  A-623
  A-623 A-623 50-70%
  A-623 A-623 A-623.
  A-623, A-623, Escherichia coli A-623
  
    convenient, at-home, patient-administered subcutaneous dosing
    with a range of dosing frequencies including monthly and weekly;
    ability to inhibit the activity of both membrane-bound and
    soluble BAFF, which may confer differentiating pharmacodynamic
    characteristics;
    non-glycosylated protein that is produced in a bacterial
    fermentation manufacturing process, which may reduce the
    potential to be immunogenic and may provide manufacturing
    benefits and lower cost of goods; and
    multiple binding domains achieve highest reported affinity for
    inhibition of BAFF. 16




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Market
    Opportunity
        PEARL-SC
    Phase 2b Clinical Study in Patients with Lupus
    PEARL-SC
  Future
    Development of
    A-623
  A-623
    Manufacturing Strategy
  A-623 A-623 A-623,
   17




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##### Table of Contents



and/or
  A-623.
  
  A-623
    Regulatory Strategy
  A-623. A-623
  A-623 and/or
  Historical
    Clinical Studies
  A-623, A-623 A-623,
  A-623 A-623. A-623. A-623 A-623 A-623
  A-623 A-623 A-623. A-623 A-623 60-70%
 18




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##### Table of Contents



A-623
  
  A-623 A-623 A-623
  A-001
  A-001 2 A-001 2 A-001 at-risk A-001
  2 2 2 A-001 2
  Market
    Opportunity
     19




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##### Table of Contents



3 A-001
  Historical
    Clinical Studies
  Phase 2
    Acute Chest Syndrome in Hospitalized Patients with Sickle Cell
    Disease Study  Investigation of the Modulation of
    Phospholipase in Acute Chest Syndrome, or IMPACTS.
  A-001 48-hour
 20




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##### Table of Contents



2 2
  A-001 48-hour A-001 2 2 A-001 2
  2 A-001). 2
  48-Hour
    sPLA2
    Activity asa Percentage of Baseline

0.0% < 25.0%


3
    25%
    3
    50%


3
    50%
    3
    75%


3
    75%Number of Subjects


7



7



3



12Number of Subjects Developing Acute Chest Syndrome (%)


0
(0)


2
(28)


1
(33)


4
(25)   Our
    Strategy
    Advancing
    Varespladib Through Phase 3.
    Advancing
    Clinical Development of
    A-623.
  A-623
  Potential
    Development of
    A-00.1
  A-001, 2 2 A-001.
 21




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##### Table of Contents



Leveraging
    Our
    sPLA2
    Expertise to Develop Products for Additional Disease
    Indications.
  2 2 2 2
  2 A-003 A-003
  Developing
    Commercial Strategies Designed to Maximize Our Product
    Candidates Market Potential.
    Competition
      2 2
  sPLA2
    in Acute Coronary Syndrome
    22




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##### Table of Contents



Compound

Stage

Company

Indications

NotesDarapladib

Phase 3

GlaxoSmithKline plc

Acute coronary syndrome

   Lp-PLA2
    Inhibitor
       Collaboration with Human Genome
    Sciences, Inc.
       Various back-up compoundsVIA-2291

Phase 2

Via Pharmaceuticals, Inc.

Acute coronary syndrome or atherosclerosis

 5-lipoxygenase inhibitor
   Discussions on-going with FDAE-5555

Phase 2

Eisai Inc.

Acute coronary syndrome or atherosclerosis

   600 patient study completed
    October 2009
       Thrombin receptor antagonist
       Evaluating biomarkers and eventsVT-111(a)

Phase 2b

Viron

Acute coronary syndrome

   SERPINS family glycoprotein
       Inhibits monocyte migration during
    vascular inflammation
       Phase 2a completed   Other
    Agents Under Development
  5-LO, 2
  Approved
    Categories of Drugs
  Statins 
  Other Lipid-Lowering
    Therapies
  Lupus
   23




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##### Table of Contents



B-cell A-623
  Compound

Stage

Company

Indications

NotesBenlysta
    (intravenous and
    subcutaneous)

BLA Submission
    (PDUFA in
    March 2011)

Human Genome Sciences, Inc./
    GlaxoSmithKline plc

Lupus

   Monoclonal antibody against BAFF, an
    agent that demonstrated partial reduction in B-cells
       Inhibits soluble BAFF only
       Positive results reported in two Phase 3
    clinical studiesLY2127399
    (subcutaneous)

Phase 3

Eli Lilly and Company

Lupus,
    Rheumatoid
    Arthritis,
    Multiple
    Myelomas

   Monoclonal antibody against BAFF
    inhibits soluble and membrane-bound BAFF
       Recent positive results in RA studyAtacicept
    (intravenous)

Phase 3

ZymoGenetics Inc./Merck
    Serono S.A.

Lupus

   Fusion protein against BAFF and APRIL;
    Phase 3 clinical study in lupus on-goingEpratuzumab
    (intravenous)

Phase 3

Immunomedics, Inc./UCB S.A.

Lupus, Non-Hodgkins
    Lymphoma

   Humanized antibody against
    CD-22, an
    agent that specifically targets
    B-cells and
    leads to partial depletion of peripheral B-cells
       Initiating Phase 3 clinical studyLupuzor
    (subcutaneous)

Phase 3

Cephalon, Inc./
    ImmuPharma
    PLC

Lupus

   Modulates CD 4 T cells
   Positive Phase 2b clinical study results reported   sPLA2
    for Acute Chest Syndrome Associated with Sickle Cell
    Disease
    Intellectual
    Property
      
    obtain and maintain patent and other proprietary protection for
    the technology, inventions and improvements we consider
    important to our business;
    defend our patents;
    preserve the confidentiality of our trade secrets; and 24




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##### Table of Contents




    operate our business without infringing the patents and
    proprietary rights of third parties.  Varespladib
    and
    A-001
  A-001
  
    13 U.S. patents;
    One pending U.S. non-provisional patent application;
    Five European, or EP, patents, each validated in one or more of
    Austria, Belgium, Denmark, France, Germany, Greece, Ireland,
    Italy, Liechtenstein, Luxembourg, the Netherlands, Portugal,
    Spain, Sweden, Switzerland and the United Kingdom;
    One pending EP patent application;
    20 non-EP foreign patents in Argentina, Australia, Brazil,
    Canada, China, Finland, India, Malaysia, Mexico, the
    Philippines, South Korea, Taiwan and Turkey; and
    Three pending non-EP foreign patent applications in Brazil,
    Japan and Thailand.  A-001 A-001, A-00l
  A-001
  
    Four pending U.S. non-provisional patent applications;
    Two pending U.S. provisional patent applications;
    Two pending Patent Cooperation Treaty, or PCT, patent
    applications; and
    National phase applications in the European Patent Office, the
    Eurasian Patent Organization and 17 other countries (Australia,
    Brazil, Canada, China, Hong Kong, India, Indonesia, Israel,
    Japan, Malaysia, Mexico, New Zealand, The Philippines,
    Singapore, South Africa, South Korea and Vietnam).  A-001
  non-U.S. A-001
  A-003
  A-003
  
    Two U.S. patents;
    One licensed pending U.S. non-provisional patent
    application (also listed above as covering varespladib and
    A-001);
    Five EP patents (two also listed above as covering varespladib
    and A-001),
    each validated in one or more of Albania, Austria, Belgium,
    Denmark, Finland, France, Germany, Greece, Ireland, Italy,
    Latvia, Liechtenstein, Lithuania, Luxembourg, the Netherlands,
    Portugal, Romania, Slovenia, Spain, Sweden, Switzerland and the
    United Kingdom; 25




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##### Table of Contents




    15 non-EP foreign patents (six also listed above as covering
    varespladib and
    A-001) in
    Argentina, Australia, Canada, China, India, Mexico, South Korea
    and Taiwan; and
    One pending non-EP foreign patent application in Brazil (also
    listed above as covering varespladib and
    A-001).  A-003 A-003,
  A-003
  
    Three U.S. non-provisional patent applications (all also
    listed above as covering varespladib and
    A-001);
    Two pending U.S. provisional patent applications (both also
    listed above as covering varespladib and
    A-001);
    Two pending PCT patent applications (both also listed above as
    covering varespladib and
    A-001); and
    National phase applications in the European Patent Office, the
    Eurasian Patent Organization and 17 other countries (Australia,
    Brazil, Canada, China, Hong Kong, India, Indonesia, Israel,
    Japan, Malaysia, Mexico, New Zealand, The Philippines,
    Singapore, South Africa, South Korea and Vietnam).  A-003
  New
    sPLA2
    Compounds
  2 A-001, A-003. 2 2
  A-623
  A-623
  
    Two U.S. patents;
    One pending U.S. non-provisional patent application;
    One EP patent validated in Albania, Austria, Belgium, Cyprus,
    Denmark, Finland, France, Germany, Greece, Ireland, Italy,
    Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, the
    Netherlands, Portugal, Romania, Slovenia, Spain, Sweden,
    Switzerland, Turkey and the United Kingdom;
    Two pending EP patent applications;
    Eleven non-EP foreign patents in Australia, China, Estonia,
    Eurasia (validated in all nine Eurasian countries), Japan, New
    Zealand, the Philippines, Singapore, South Korea and South
    Africa; and
    13 pending non-EP foreign patent applications in Brazil,
    Bulgaria, Canada, China, the Czech Republic, Hong Kong, Hungary,
    Israel, Mexico, Norway, Poland, Serbia and Slovakia.     26




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##### Table of Contents



A-623, A-001, A-003 2
  A-101
  A-101
  A-101
  
    One pending U.S. non-provisional patent application.  A-101
  Licenses
  Eli Lilly
    and Shionogi & Co., Ltd.
  2
  2 A-001, A-003 2
   27




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##### Table of Contents



A-001,
  product-by-product country-by-country
  Amgen
  A-623,
  A-623, A-623
  A-623
  A-623
 28




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##### Table of Contents



Manufacturing
    and Supply
    Sales and
    Marketing
    A-001,
  A-623 A-001
  Regulatory
    Matters
  Government
    Regulation and Product Approval
   29




---



##### Table of Contents



A-623,
  United
    States Drug Development Process
    
    completion of preclinical laboratory tests, animal studies and
    formulation studies according to Good Laboratory Practices
    regulations;
    submission to the FDA of an IND, which must become effective
    before human clinical studies may begin;
    performance of adequate and well-controlled human clinical
    studies according to Good Clinical Practices, or GCP, to
    establish the safety and efficacy of the proposed drug or
    biological product for its intended use;
    submission to the FDA of an NDA for a new drug or BLA for a
    biological product;
    satisfactory completion of an FDA inspection of the
    manufacturing facility or facilities at which the drug or
    biological product is produced to assess compliance with
    cGMP; and
    FDA review and approval of the NDA or BLA.    30-day
     30




---



##### Table of Contents




    Phase 1.  The product is initially introduced
    into healthy human subjects and tested for safety, dosage
    tolerance, absorption, metabolism, distribution and excretion.
    In the case of some products for severe or life-threatening
    diseases, especially when the product may be too inherently
    toxic to ethically administer to healthy volunteers, the initial
    human testing is often conducted in patients.
    Phase 2.  Involves studies in a limited patient
    population to identify possible adverse effects and safety risks
    to preliminarily evaluate the efficacy of the product for
    specific targeted diseases and to determine dosage tolerance and
    optimal dosage and schedule.
    Phase 3.  Clinical studies are undertaken to
    further evaluate dosage, clinical efficacy and safety in an
    expanded patient population at geographically dispersed clinical
    study sites. These studies are intended to establish the overall
    risk/benefit ratio of the product and provide an adequate basis
    for product labeling.      U.S.
    Review and Approval Processes
      re-submitted cGMP-compliant
 31




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Patent
    Term Restoration and Marketing Exclusivity
     32




---



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Orphan
    Drug Designation
        Expedited
    Development and Review Programs
     33




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##### Table of Contents



A-001, A-001, A-001
  Post-Approval
    Requirements
           34




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##### Table of Contents



direct-to-consumer direct-to-consumer
  Foreign
    Regulation
       35




---



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Reimbursement
             36




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##### Table of Contents



Employees
    Other
    Available Information
  1-800-SEC-0330.
  510-856-5600. Form 10-K; Form 10-Q; Form 8-K;
  ITEM 1A.
    RISK
    FACTORS  Before you decide to invest in our common stock, you should
    carefully consider the risks described below, together with the
    other information contained in this Annual Report on
    Form 10-K,
    including the financial statements and the related notes that
    appear at the end of this report. We believe the risks described
    below are the risks that are material to us as of the date of
    this report. If any of the following risks occur, our business,
    financial condition, results of operations and future growth
    prospects would likely be materially and adversely affected. In
    these circumstances, the market price of our common stock could
    decline, and you may lose all or part of your investment.
 37




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Risks
    Related to Our Financial Condition and Capital
    Requirements
  We
    have incurred significant losses since our inception and
    anticipate that we will incur continued significant losses for
    the foreseeable future.
  A-623 (A-001).
  A-623 A-623.
  We
    have never generated any revenue and may never be
    profitable.
    
    obtain favorable results for and advance the development of our
    lead product candidate, varespladib, for the treatment of acute
    coronary syndrome, including successfully launching and
    completing the VISTA-16 study;
    obtain favorable results for and advance the development of our
    product candidate
    A-623 for
    the treatment of B-cell mediated autoimmune diseases, including
    successfully launching and completing a Phase 2b clinical study
    in patients with systemic lupus erythematosus, or lupus, or
    other indications related to the development of
    A-623;
    obtain favorable results for and advance the development of our
    product candidate
    A-001 for
    the prevention of acute chest syndrome associated with sickle
    cell disease, including completing a multi-center Phase 2
    clinical study;
    successfully execute our planned preclinical studies in animals
    and clinical studies in human beings for our other product
    candidates;
    obtain regulatory approval for varespladib,
    A-623,
    A-001 and
    our other product candidates;
    if regulatory approvals are obtained, begin the commercial
    manufacturing of our product candidates with our third-party
    manufacturers;
    launch commercial sales and effectively market our product
    candidates, either independently or in strategic collaborations
    with third parties; and
    achieve broad market acceptance of our product candidates in the
    medical community and with third-party payors.   38




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A-623 A-001.
      We
    will need substantial additional capital in the future to fund
    our operations. If additional capital is not available, we will
    have to delay, reduce or cease operations.
    
    the rate of progress of our Phase 3 clinical study named
    VISTA-16 study for varespladib and our Phase 2b clinical study
    named PEARL-SC for
    A-623;
    the scope, size, rate of progress, results and costs of our
    preclinical studies, clinical studies and other development
    activities for one or more of our other product candidates;
    manufacturing campaign of
    A-623
    clinical matters, including formulation development and
    enhancement;
    non-clinical activities that we may pursue parallel to clinical
    trials for each clinical compound;
    the cost, timing and outcomes of regulatory proceedings;
    payments received under any strategic collaborations;
    the filing, prosecution and enforcement of patent claims;
    the costs associated with commercializing our product candidates
    if they receive regulatory approval, including the cost and
    timing of developing sales and marketing capabilities, or
    entering into strategic collaboration with others relating to
    the commercialization of our product candidates; and
    revenues received from approved products, if any, in the future.    
    terminate, reduce or delay preclinical studies, clinical studies
    or other development activities for one or more of our product
    candidates; or
    terminate, reduce or delay our (i) establishment of sales
    and marketing capabilities, (ii) pursuit of strategic
    collaborations with others relating to the sales, marketing and
    commercialization of our product candidates or (iii) other
    activities that may be necessary to commercialize our product
    candidates, if approved for sale. 39




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The
    timing of the milestone and royalty payments we are required to
    make to each of Eli Lilly and Company, Shionogi & Co.,
    Ltd. and Amgen Inc. is uncertain and could adversely affect our
    cash flows and results of operations.
  2 2 2 A-001, A-001, A-623. A-623 2 A-623,
  Our
    limited operating history makes it difficult to evaluate our
    business and prospects.
  A-623 A-001,
  Risks
    Associated with Development and Commercialization of Our Product
    Candidates
  We
    depend substantially on the success of our three primary product
    candidates, varespladib,
    A-623 and
    A-001, which
    are still under clinical development. We cannot assure you that
    these product candidates or any of our other product candidates
    will receive regulatory approval or be successfully
    commercialized.
    A-623,
 40




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(A-001), 2 A-001, 2 2
    
    offer therapeutic or other improvement over existing, comparable
    therapeutics;
    be proven safe and effective in clinical studies;
    meet applicable regulatory standards;
    be capable of being produced in sufficient quantities at
    acceptable costs;
    be successfully commercialized; or
    obtain favorable reimbursement.  A-001 A-623
    Any
    termination or suspension of, or delays in the commencement or
    completion of, clinical testing of our product candidates could
    result in increased costs to us, delay or limit our ability to
    generate revenue and adversely affect our commercial
    prospects.
    
    obtaining regulatory approval to commence a clinical study or
    complying with conditions imposed by a regulatory authority
    regarding the scope or design of a clinical study;
    reaching agreement on acceptable terms with prospective clinical
    research organizations, or CROs, and study sites, the terms of
    which can be subject to extensive negotiation and may vary
    significantly among different CROs and study sites; 41




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
    manufacturing, including manufacturing sufficient quantities of
    a product candidate or other materials for use in clinical
    studies;
    obtaining institutional review board, or IRB, approval or the
    approval of other reviewing entities to conduct a clinical study
    at a prospective site;
    recruiting and enrolling patients to participate in clinical
    studies for a variety of reasons, including size of patient
    population, nature of clinical study protocol, the availability
    of approved effective treatments for the relevant disease and
    competition from other clinical study programs for similar
    indications;
    severe or unexpected drug-related adverse effects experienced by
    patients in a clinical study; and
    retaining patients who have initiated a clinical study, but may
    withdraw due to treatment protocol, adverse effects from the
    therapy, lack of efficacy from the treatment, personal issues or
    who are lost to further
    follow-up.    
    failure to conduct the clinical study in accordance with
    regulatory requirements or our clinical protocols;
    inspection of the clinical study operations or study sites by
    the FDA or other regulatory authorities resulting in the
    imposition of a clinical hold;
    unforeseen safety issues or any determination that a clinical
    study presents unacceptable health risks; and
    lack of adequate funding to continue the clinical study,
    including the incurrence of unforeseen costs due to enrollment
    delays, requirements to conduct additional clinical studies and
    increased expenses associated with the services of our CROs and
    other third parties.      The
    results of biomarker assays in earlier clinical studies in
    varespladib are not necessarily predictive of future results,
    and therefore the results of biomarker assays in the VISTA-16
    study may not be similar to those observed
    previously.
  2
 42




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Because
    the results of preclinical testing or earlier clinical studies
    are not necessarily predictive of future results, varespladib,
    A-623,
    A-001 or any
    other product candidate we advance into clinical studies may not
    have favorable results in later clinical studies or receive
    regulatory approval.
  A-623 A-001,
  If we
    breach the license agreements for our primary product
    candidates, we could lose the ability to continue the
    development and commercialization of our primary product
    candidates.
  2 A-623.
  re-obtain A-623 A-001 A-623 A-001.
  Our
    industry is subject to intense competition. If we are unable to
    compete effectively, our product candidates may be rendered
    non-competitive or obsolete.
    2
 43




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2 2 2
    Our
    product candidates may cause undesirable adverse effects or have
    other properties that could delay or prevent their regulatory
    approval or limit the commercial profile of any approved
    label.
    
    regulatory authorities may withdraw their approval of the
    product;
    regulatory authorities may require the addition of labeling
    statements, such as warnings or contraindications;
    we may be required to change the way the product is
    administered, conduct additional clinical studies or change the
    labeling of the product;
    we could be sued and held liable for harm caused to
    patients; and
    our reputation may suffer. 44




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After
    the completion of our clinical studies, we cannot predict
    whether or when we will obtain regulatory approval to
    commercialize our product candidates and we cannot, therefore,
    predict the timing of any future revenue from these product
    candidates.
    Our
    agreement with the FDA on an SPA for our VISTA-16 study of
    varespladib for the potential treatment of acute coronary
    syndrome does not guarantee any particular outcome from
    regulatory review of the study or the product
    candidate.
  (16-week)
  Even
    if our product candidates receive regulatory approval, they may
    still face future development and regulatory
    difficulties.
    
    issue warning letters or untitled letters;
    seek an injunction or impose civil or criminal penalties or
    monetary fines;
    suspend or withdraw regulatory approval;
    suspend any ongoing clinical studies; 45




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
    refuse to approve pending applications or supplements to
    applications filed by us;
    suspend or impose restrictions on operations, including costly
    new manufacturing requirements; or
    seize or detain products, refuse to permit the import or export
    of products, or require us to initiate a product recall.    New
    legal and regulatory requirements could make it more difficult
    for us to obtain approvals for our product candidates and could
    limit or make more burdensome our ability to commercialize any
    approved products.
    If any
    of our product candidates for which we receive regulatory
    approval does not achieve broad market acceptance, the revenue
    that we generate from its sales, if any, will be
    limited.
    
    demonstration of clinical safety and efficacy compared to other
    products;
    the relative convenience, ease of administration and acceptance
    by physicians and payors of varespladib in the treatment of
    acute coronary syndrome,
    A-623 in the
    treatment of lupus and
    A-001 in the
    prevention of acute chest syndrome associated with sickle cell
    disease;
    the prevalence and severity of any adverse effects;
    limitations or warnings contained in a products
    FDA-approved labeling;
    availability of alternative treatments, including, in the case
    of varespladib, a number of competitive products being studied
    for anti-inflammatory benefits in patients with acute coronary
    syndrome or expected to be commercially launched in the near
    future;
    pricing and cost-effectiveness;
    the effectiveness of our or any future collaborators sales
    and marketing strategies;
    our ability to obtain and maintain sufficient third-party
    coverage or reimbursement from government health care programs,
    including Medicare and Medicaid; and
    the willingness of patients to pay
    out-of-pocket
    in the absence of third-party coverage. 46




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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.
    Recently
    enacted and future legislation or regulatory reform of the
    health care system in the United States and foreign
    jurisdictions may affect our ability to sell our products
    profitably.
         47




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We
    face potential product liability exposure, and, if successful
    claims are brought against us, we may incur substantial
    liability.
    
    impairment of our business reputation;
    withdrawal of clinical study participants;
    costs of related litigation;
    distraction of managements attention from our primary
    business;
    substantial monetary awards to patients or other claimants;
    the inability to commercialize our product candidates; and
    decreased demand for our product candidates, if approved for
    commercial sale.    If we
    use hazardous and biological materials in a manner that causes
    injury or violates applicable law, we may be liable for
    damages.
   48




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We
    rely on third parties to conduct, supervise and monitor our
    clinical studies, and those third parties may perform in an
    unsatisfactory manner, such as by failing to meet established
    deadlines for the completion of these clinical studies, or may
    harm our business if they suffer a catastrophic
    event.
    Any
    failure by our third-party manufacturers on which we rely to
    produce our preclinical and clinical drug supplies and on which
    we intend to rely to produce commercial supplies of any approved
    product candidates may delay or impair our ability to
    commercialize our product candidates.
      A-623, A-623 A-623 A-623 A-623
 49




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A-623 A-623 A-623
      If we
    are unable to establish sales and marketing capabilities or
    enter into agreements with third parties to market and sell our
    product candidates, we may be unable to generate any
    revenue.
    Guidelines
    and recommendations published by various organizations may
    adversely affect the use of any products for which we may
    receive regulatory approval.
   50




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Risks
    Related to Our Intellectual Property
  If our
    or our licensors patent positions do not adequately
    protect our product candidates or any future products, others
    could compete with us more directly, which would harm our
    business.
  A-001; 2 A-003; A-623.
      
    we or our licensors were the first to make the inventions
    covered by each of our pending patent applications;
    we or our licensors were the first to file patent applications
    for these inventions;
    others will not independently develop similar or alternative
    technologies or duplicate any of our technologies;
    any of our or our licensors pending patent applications
    will result in issued patents;
    any of our or our licensors patents will be valid or
    enforceable;
    any patents issued to us or our licensors and collaborators will
    provide a basis for commercially viable products, will provide
    us with any competitive advantages or will not be challenged by
    third parties;
    we will develop additional proprietary technologies or product
    candidates that are patentable; or
    the patents of others will not have an adverse effect on our
    business.  We may
    be unable to adequately prevent disclosure of trade secrets and
    other proprietary information.
   51




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We
    license patent rights from third-party owners. If we, or such
    owners, do not properly maintain or enforce the patents
    underlying such licenses, our competitive position and business
    prospects will be harmed.
  2 A-623,
  2 A-623,
    If we
    do not obtain protection under the Hatch-Waxman Act and similar
    foreign legislation to extend our licensed patent terms and to
    obtain market exclusivity for our product candidates, our
    business will be materially harmed.
  A-623s A-623s
 52




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##### Table of Contents



A-623 A-623 10-year
  Our
    current patent positions and license portfolio may not include
    all patent rights needed for the full development and
    commercialization of our product candidates. We cannot be sure
    that patent rights we may need in the future will be available
    for license to us on commercially reasonable terms, or at
    all.
    non-U.S. countries
    Litigation
    regarding patents, patent applications and other proprietary
    rights may be expensive and time consuming. If we are involved
    in such litigation, it could cause delays in bringing product
    candidates to market and harm our ability to
    operate.
   53




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Risks
    Related to the Securities Markets and Investment in Our Common
    Stock
  Market
    volatility may affect our stock price and the value of your
    investment.
    
    plans for, progress in and results from clinical studies for
    varespladib,
    A-623,
    A-001 and
    our other product candidates;
    announcements of new products, services or technologies,
    commercial relationships, acquisitions or other events by us or
    our competitors;
    developments concerning proprietary rights, including those
    pertaining to patents held by Eli Lilly and Shionogi &
    Co., Ltd. concerning our
    sPLA2
    inhibitors and Amgen concerning
    A-623;
    failure of any of our product candidates, if approved, to
    achieve commercial success;
    fluctuations in stock market prices and trading volumes of
    securities of similar companies;
    general market conditions and overall fluctuations in
    U.S. equity markets;
    variations in our operating results, or the operating results of
    our competitors;
    changes in our financial guidance or securities analysts
    estimates of our financial performance;
    changes in accounting principles;
    sales of large blocks of our common stock, including sales by
    our executive officers, directors and significant stockholders;
    additions or departures of any of our key personnel;
    announcements related to litigation;
    changing legal or regulatory developments in the United States
    and other countries; and
    discussion of us or our stock price by the financial press and
    in online investor communities.   54




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Because
    a small number of our existing stockholders own a majority of
    our voting stock, your ability to influence corporate matters
    will be limited.
    Future
    sales of our common stock may cause our stock price to
    decline.
    lock-up
  We may
    need to raise additional capital to fund our operations, which
    may cause dilution to our existing stockholders, restrict our
    operations or require us to relinquish rights.
    Operating
    as a public company increases our expenses and administrative
    burden.
   55




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##### Table of Contents



We do
    not intend to pay dividends on our common stock so any returns
    will be limited to the value of our stock.
    Anti-takeover
    provisions in our charter documents and under Delaware law could
    make an acquisition of us, which may be beneficial to our
    stockholders, more difficult and may prevent attempts by our
    stockholders to replace or remove our current
    management.
    
    a classified and staggered board of directors whose members can
    only be dismissed for cause;
    the prohibition on actions by written consent of our
    stockholders;
    the limitation on who may call a special meeting of stockholders;
    the establishment of advance notice requirements for nominations
    for election to our board of directors or for proposing matters
    that can be acted upon at stockholder meetings;
    the ability of our board of directors to issue preferred stock
    without stockholder approval, which would increase the number of
    outstanding shares and could thwart a takeover attempt; and
    the requirement of at least 75% of the outstanding common stock
    to amend any of the foregoing provisions.    Our
    ability to use our net operating loss carryforwards may be
    subject to limitation and may result in increased future tax
    liability to us.
   56




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    REMOVED
    AND RESERVED 57




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Price
    Range of Common Stock
    High


LowFirst Quarter 2010 (beginning March 1, 2010)

$
7.39


$
6.86Second Quarter 2010

$
8.55


$
5.07Third Quarter 2010

$
5.99


$
2.82Fourth Quarter 2010

$
6.90


$
4.12   Holders
    of our Common Stock
   58




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##### Table of Contents



Performance
    Graph
    COMPARISON
    OF TOTAL RETURN
    Among Anthera Pharmaceuticals, Inc., The NASDAQ Composite
    Index
    And The NASDAQ Biotech Index
  
  3/1/2010



3/31/2010



6/30/2010



9/30/2010



12/31/2010Anthera Pharmaceuticals, Inc.


$
100.00



$
99.71



$
76.46



$
59.77



$
69.61Nasdaq Composite


$
100.00



$
105.47



$
92.77



$
104.18



$
116.68Nasdaq Biotech


$
100.00



$
104.08



$
88.66



$
99.24



$
107.53   Dividend
    Policy
    Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Recent
    Sales of Unregistered Securities
  Form 8-K,
  Issuer
    Purchases of Equity Securities
   59




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  CumulativePeriod fromSeptember 92004 (Date ofInception) toYear Ended December 31,


December 31,2010


2009


2008


2007


2006


2010Statement of Operations Data:Operating expensesResearch and development

$
29,456,742


$
8,415,414


$
10,882,322


$
23,921,932


$
7,759,106


$
80,780,723General and administrative


6,300,849



3,425,690



2,980,170



2,468,607



822,732



16,218,416Total operating expenses


(35,757,591
)


(11,841,104
)


(13,862,492
)


(26,390,539
)


(8,581,838
)


(96,999,139
)Other Income (Expense)Other expense and interest income, net


(859,733
)


(362,388
)


(118,174
)


696,962



92,592



(539,593
)Mark-to-market
    adjustment of warrant liability


(3,796,491
)


















(3,796,491
)Beneficial conversion feature










(4,118,544
)






(190,000
)


(4,308,544
)Total other income (expense)


(4,656,224
)


(362,388
)


(4,236,718
)


696,962



(97,408
)


(8,644,628
)Net loss

$
(40,413,815
)

$
(12,203,492
)

$
(18,099,210
)

$
(25,693,577
)

$
(8,679,246
)

$
(105,643,767
)Net loss per share  basic and diluted(1)

$
(1.76
)

$
(8.06
)

$
(13.47
)

$
(28.15
)

$
(13.82
)Weighted-average number of shares used in per share
    calculation  basic and diluted(2)


22,909,802



1,513,598



1,343,420



912,668



627,904     (1)
    
    Diluted earnings per share, or EPS, is identical to basic EPS
    since common equivalent shares are excluded from the
    calculation, as their effect is anti-dilutive.(2)
    
    For accounting purposes only, the number of issued and
    outstanding shares for the years ended December 31, 2006,
    2007, 2008, 2009 and 2010 do not include weighted-average shares
    of unvested stock of 297,596, 261,649, 230,028, 110,079 and
    47,654, respectively. These shares are subject to a risk of
    repurchase by us until such shares are vested. See Note 2
    of our financial statements for more information.  As of December 31,2010


2009


2008


2007


2006Balance Sheet Data:Cash and cash equivalents

$
40,029,972


$
3,803,384


$
7,895,113


$
152,744


$
20,781,916Short-term investments


23,350,922











5,825,000



Working capital


57,240,395



(14,344,436
)


(495,836
)


(2,907,995
)


19,629,639Total assets


65,263,062



5,888,789



8,034,154



6,193,213



20,856,892Total liabilities


8,005,382



18,167,645



8,494,417



12,058,184



1,174,621Convertible preferred stock






52,123,859



52,123,859



28,892,004



28,892,004Deficit accumulated during the development stage


(105,643,767
)


(65,229,952
)


(53,026,460
)


(34,927,250
)


(9,233,673
)Total stockholders (deficit) equity


57,257,680



(12,278,856
)


(460,263
)


(5,864,971
)


19,682,271  60




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ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion and analysis should be read together
    with our financial statements and the related notes set forth
    under Item 8. Financial Statements and Supplementary
    Data. This discussion contains forward-looking statements
    reflecting our current expectations that involve risks and
    uncertainties. See Special Note Regarding Forward-Looking
    Statements for a discussion of the uncertainties, risks
    and assumptions associated with these statements. Actual results
    and the timing of events could differ materially from those
    discussed in our forward-looking statements as a result of many
    factors, including those set forth under Risk
    Factors and elsewhere in this report.
  Overview
  A-623 A-001. A-001, 2 2 2 A-623,
      Revenue
    Research
    and Development Expenses
   61




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A-623,
      For the PeriodSeptember 9,2004 (Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Allocated costs:A-001

$
(11,688
)(1)

$
192,979


$
456,633


$
6,508,358
(1)Varespladib


19,229,868
(1)(2)


5,535,529



7,370,850



47,090,513
(1)(2)(4)A-623


5,826,475
(3)


34,179



100,851



11,969,892
(3)(5)Unallocated costs


4,412,087



2,652,727



2,953,988



15,211,960Total development

$
29,456,742


$
8,415,414


$
10,882,322


$
80,780,723     (1)
    
    Includes Qualifying Therapeutic Discovery Project Credit under
    Section 48D of approximately $244,000. See Note 2 of
    our financial statements for more information.(2)
    
    Includes milestone payments of $3.5 million pursuant to
    amendments to the license agreements with each of Eli Lilly and
    Shionogi & Co. Ltd., which were paid in the form of
    shares of common stock.(3)
    
    Includes Qualifying Therapeutic Discovery Project Credit under
    Section 48D of approximately $488,000. See Note 2 of
    our financial statements for more information.(4)
    
    Includes license fees of $4.0 million pursuant to a license
    agreement with each of Eli Lilly and Shionogi & Co.
    Ltd., which were paid in cash and shares of preferred stock in
    2006.(5)
    
    Includes a one-time license initiation fee of $6.0 million
    pursuant to a license agreement with Amgen.  A-623
    
    the number of sites included in the studies; 62




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
    the length of time required to enroll suitable patient subjects;
    the number of patients that participate in the studies;
    the number of doses that patients receive;
    the drop-out or discontinuation rates of patients; and
    the duration of patient
    follow-up.        General
    and Administrative Expenses
    Critical
    Accounting Policies and Estimates
      Accrued
    Clinical Expenses
   63




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##### Table of Contents




    fees paid to CROs in connection with clinical studies;
    fees paid to investigative sites in connection with clinical
    studies;
    fees paid to contract manufacturers in connection with the
    production of clinical study materials; and
    fees paid to vendors in connection with the preclinical
    development activities.    Stock-Based
    Compensation
  Compensation  Stock
    Compensation
    Fair
    Value Measurements and Impairments
  available-for-sale other-than-temporary. other-than-temporary,
   64




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##### Table of Contents




    Level 1  Valuations are based on quoted
    prices in active markets for identical assets or liabilities,
    and readily accessible by us at the reporting date. Examples of
    assets and liabilities utilizing Level 1 inputs are certain
    money market funds, U.S. Treasuries and trading securities
    with quoted prices on active markets.
    Level 2  Valuations based on inputs other
    than the quoted prices in active markets that are observable
    either directly or indirectly in active markets. Examples of
    assets and liabilities utilizing Level 2 inputs are
    U.S. government agency bonds, corporate bonds, commercial
    paper, certificates of deposit and
    over-the-counter
    derivatives.
    Level 3  Valuations based on unobservable
    inputs in which there is little or no market data, which require
    us to develop our own assumptions. Examples of assets and
    liabilities utilizing Level 3 inputs are cost method
    investments, auction rate securities (ARS) and the Primary Fund.  available-for-sale Available-for-sale
  available-for-sale other-than-temporary
  other-than-temporary. available-for-sale Available-for-sale
    Comprehensive
    Income (Loss)
    Results
    of Operations
  Comparison
    of Years Ended December 31, 2010 and 2009
  Research and development expenses.
 65




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##### Table of Contents



2010


2009


$ Change


% ChangeResearch and development expense

$
29.4


$
8.4


$
21.0



250
%   A-623,
  General and administrative expenses.
    2010


2009


$ Change


% ChangeGeneral and administrative expense

$
6.3


$
3.4


$
2.9



85
%     Other expense and interest income, net. mark-to-market
    2010


2009


$ Change


% ChangeOther expense and interest income, net

$
(0.9
)

$
(0.4
)

$
(0.6
)


138
%Mark-to-market
    adjustment of warrant liability

$
(3.8
)





$
(3.8
)


100
%   mark-to-market
  Comparison
    of Years Ended December 31, 2009 and 2008
  Research and development expenses.
    2009


2008


$ Change


% ChangeResearch and development expense

$
8.4


$
10.9


$
(2.5
)


(23
)%  66




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##### Table of Contents



General and administrative expenses.
    2009


2008


$ Change


% ChangeGeneral and administrative expense

$
3.4


$
3.0


$
0.4



13
%   Other expense and interest income, net.
    2009


2008


$ Change


% ChangeOther expense and interest income, net

$
(0.4
)

$
(0.1
)

$
0.3



200
%   Beneficial conversion feature. Series B-2
  Liquidity
    and Capital Resources
      2010


2009Cash and cash equivalents

$
40,029,972


$
3,803,384Short-term investments


23,350,922



Total

$
63,380,894


$
3,803,384     Cash
    Flows
  Year
    ended December 31, 2010
    mark-to-market
   67




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##### Table of Contents



Year
    Ended December 31, 2009
        Contractual
    Obligations and Commitments
    Payments Due by PeriodLess Than








AfterTotal


1 Year


1-3 Years


3-5 Years


5 YearsOperating lease obligations(1)

$
15,594


$
10,914


$
4,680


$



$
     (1)
    
    Operating lease obligations reflect our obligation to make
    payments in connection with a sublease that commenced in October
    2008 and expired in January 2011, which sublease was
    subsequently extended through July 2011, for approximately
    7,800 square feet of office space, and office equipment
    leases that commenced in October 2007 and will expire in June
    2013.  2
  A-623. A-623, country-by-country product-by-licensed
 68




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##### Table of Contents



Funding
    Requirements
    
    continue clinical development of the Phase 3 VISTA-16 study for
    varespladib;
    continue clinical development of the Phase 2b PEARL-SC study for
    A-623;
    hire additional clinical, scientific and management
    personnel; and
    implement new operational, financial and management information
    systems.    
    the progress of preclinical development and clinical studies of
    our product candidates;
    the time and costs involved in obtaining regulatory approvals;
    delays that may be caused by evolving requirements of regulatory
    agencies;
    the costs involved in filing and prosecuting patent applications
    and enforcing or defending patent claims;
    our ability to establish, enforce and maintain selected
    strategic alliances; and
    the acquisition of technologies, product candidates and other
    business opportunities that require financial commitments.         69




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##### Table of Contents



Off-Balance
    Sheet Arrangements
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    other-than-temporary. other-than-temporary
  ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e) Rules 13a-15(e) 15d-15(e)
 70




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##### Table of Contents



Changes
    in Internal Control over Financial Reporting
  Rule 13a-15(d) 15d-15(d)
  Managements
    Annual Report on Internal Control over Financial Reporting and
    Attestation Report of the Registered Accounting Firm
    ITEM 9B.
    OTHER
    INFORMATION   71




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##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Members
    of the Board of Directors
    Name

Age

PositionPaul F. Truex


42


Chief Executive Officer, President and DirectorChristopher S. Henney, Ph.D.


70


Chairman of the Board of DirectorsAnnette Bianchi


52


DirectorJames I. Healy, M.D., Ph.D.


46


DirectorDonald J. Santel


50


DirectorDaniel K. Spiegelman


52


DirectorDavid E. Thompson


63


DirectorPeter A. Thompson, M.D.


51


Director     Paul F. Truex.
  Christopher S.
    Henney, Ph.D.
  Annette Bianchi.
  James I.
    Healy, M.D., Ph.D.
 72




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##### Table of Contents



Donald J. Santel.
  Daniel K. Spiegelman.
  David E. Thompson.
  Peter A. Thompson, M.D.
    Code of
    Ethics
  http://www.anthera.com
  Committees
    of the Board of Directors
     73




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##### Table of Contents



Regulation S-K http://www.anthera.com.
  Audit Committee.
  Compensation Committees Role in Risk
    Management.
  Executive
    Officers
    Name

Age

PositionPaul F. Truex


42


Chief Executive Officer, President and DirectorChristopher P. Lowe


43


Chief Business Officer and Chief Financial OfficerColin Hislop, M.D.


53


Senior Vice President and Chief Medical OfficerDebra Odink, Ph.D.


47


Senior Vice President, Pharmaceutical Research and DevelopmentGeorgina Kilfoil


42


Senior Vice President, Product Development and Clinical
    Operations   Christopher P. Lowe.
  Colin Hislop, M.D.
  Debra Odink, Ph.D.
 74




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##### Table of Contents



Georgina Kilfoil.
  Section 16(a)
    Beneficial Ownership Reporting Compliance
      ITEM 11.
    EXECUTIVE
    COMPENSATION  Director
    Compensation
       75




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##### Table of Contents



Director
    Compensation Table  2010
    Fees Earned


Optionor Paid


AwardsName

in Cash ($)


($)(1)


Total ($)Christopher S. Henney, Ph.D. (Chairman)

$
80,000


$
37,089
(2)

$
117,089Annette Bianchi

$
40,000


$
29,671
(3)

$
69,671James I. Healy, M.D., Ph.D.

$
40,000


$
29,671


$
69,671A. Rachel Leheny, Ph.D(4)

$
40,000


$
29,671
(5)

$
69,671Donald J. Santel

$
41,250


$
29,671
(6)

$
70,921Daniel K. Spiegelman(7)

$
50,417


$
29,671
(7)

$
80,088David E. Thompson

$
50,000


$
29,671
(8)

$
79,671Peter A. Thompson(9)

$



$



$
     (1)
    
    This column reflects the aggregate grant date fair value of
    equity awards granted in 2010 and calculated in accordance with
    FASB ASC 718, excluding the effect of estimated
    forfeitures. See Note 11 to our financial statements for a
    discussion of the assumptions made in determining the valuation
    of option awards.(2)
    
    Dr. Henney held 15,000 shares underlying stock options
    as of December 31, 2010.(3)
    
    Ms. Bianchi held 32,443 shares underlying stock
    options as of December 31, 2010.(4)
    
    Dr. Leheny resigned from our Board of Directors on
    February 1, 2011.(5)
    
    Dr. Leheny held 26,602 shares underlying stock options
    as of December 31, 2010.(6)
    
    Mr. Santel held 32,443 shares underlying stock options
    as of December 31, 2010.(7)
    
    Mr. Spiegelman joined our Board of Directors on
    February 2, 2010. He held 37,000 shares underlying
    stock options as of December 31, 2010.(8)
    
    Mr. Thompson held 29,523 shares underlying stock
    options as of December 31, 2010.(9)
    
    Dr. Thompson joined our Board of Directors on
    February 1, 2011.  Compensation
    Discussion and Analysis
    Background
    and Objectives
    Role of
    Compensation Committee and Executive Officers
   76




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##### Table of Contents




    reviewing and recommending corporate goals and objectives
    relevant to the compensation of our Chief Executive Officer and
    named executive officers;
    evaluating the performance of our Chief Executive Officer and
    named executive officers in light of such corporate goals and
    objectives and determining the compensation of our Chief
    Executive Officer; and
    reviewing and approving the level of equity awards, annual
    salary and bonuses for our named executive officers and other
    employees.      Role of
    Compensation Consultant
    50-149 employees
 77




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##### Table of Contents





Affymax, Inc.



Neurogesx Inc.

Alexza Pharmaceuticals, Inc.



Omeros Corp.

Amarin Corp.



Optimer Pharmaceuticals Inc.

Avanir Pharmaceuticals



Orexigen Therapeutics, Inc.

AVI BioPharma Inc.



Pain Therapeutics Inc.

Cell Therapeutics, Inc.



Pharmacyclics Inc.

Cytokinetics, Inc.



Sunesis Pharmaceuticals Inc.

Depomed Inc.



Supergen Inc.

DURECT Corporation



Transcept Pharmaceuticals Inc.

Ligand Pharmaceuticals Inc.



Vical, Inc.

Map Pharmaceuticals Inc.



Xenoport, Inc.     Compensation
    Elements
  Base Salary.
    Annual Base Salary Prior


Annual Base Salaryto May 1,


Effective May 1,Named Executive Officer

2010


2010Paul F. Truex,

$
300,000


$
425,000President and Chief Executive OfficerChristopher P. Lowe,

$
250,000


$
300,000Chief Business Officer and Chief Financial OfficerColin Hislop, M.D.,

$
270,000


$
320,000Senior Vice President and Chief Medical OfficerDebra Odink, Ph.D.,

$
200,000


$
225,000Senior Vice President, Pharmaceutical Research and Development  78




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##### Table of Contents



Currant Annual


Annual Base SalaryNamed Executive Officer

Base Salary


Effective February 1, 2011Paul F. Truex,

$
425,000


$
500,000President and Chief Executive OfficerChristopher P. Lowe,

$
300,000


$
340,000Chief Business Officer and Chief Financial OfficerColin Hislop, M.D.,

$
320,000


$
340,000Senior Vice President and Chief Medical OfficerDebra Odink, Ph.D.,

$
250,000


$
270,000Senior Vice President, Pharmaceutical Research and Development   Cash Bonuses.
    A-623 follow-up
 79




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##### Table of Contents




    continued development of our product candidates, including
    initiating enrollment of our VISTA-16 clinical study for
    varespladib and obtaining at least a certain level of enrollment
    by the end of the year,
    initiating Phase 2 enrollment for
    A-623 and
    completing enrollment by the end of the year,
    considering strategic partnership opportunities for our product
    candidates, and
    opportunistically supporting our corporate development
    objectives with appropriate financing and budgeting efforts.    Equity Incentive Compensation.
       80




---



##### Table of Contents



Other Compensation.
      Tax and Accounting Treatment of
    Compensation.
 81




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##### Table of Contents



Compensation
    of Executive Officers
  Summary
    Compensation Table
    Non-EquityStock


Incentive PlanName and Principal Position as of




Salary


Bonus


Awards


Compensation


TotalDecember 31, 2010

Year


($)


($)


($)(1)


($)(2)


($)Paul F. Truex


2010


$
383,333






$
460,960


$
398,000


$
1,242,293President, Chief Executive Officer


2009


$
281,837






$
88,125






$
369,962and Director


2008


$
300,000














$
300,000Christopher P. Lowe


2010


$
283,333






$
214,400


$
184,000


$
681,733Chief Business Officer and Chief


2009


$
241,174






$
23,500






$
264,674Financial Officer


2008


$
250,000






$
117,411






$
367,411Colin Hislop, M.D.


2010


$
303,333






$
214,400


$
132,000


$
649,733Senior Vice President,


2009


$
259,621


$
1,247


$
28,795






$
289,663Cardiovascular Products


2008


$
270,000














$
270,000Debra Odink, Ph.D.


2010


$
232,179






$
134,000


$
80,000


$
446,179Senior Vice President, Pharmaceutical


2009


$
158,580


$
3,996


$
29,375






$
191,951Research and Development


2008


$
200,000














$
200,000Georgina Kilfoil(3)


2010


$
197,917






$
120,600


$
37,000


$
355,517Senior Vice President, Development


2009



















And Clinical Operations


2008



















     (1)
    
    This column reflects the aggregate grant date fair value of
    equity awards granted in 2010, 2009 and 2008. During 2010, we
    granted restricted stock units to our executive officers and the
    grant date fair value is calculated based on the closing sales
    price of our common stock on the grant date and in accordance
    with FASB ASC 718. During 2009 and 2008, we granted stock
    options to our executive officers and the grant date fair value
    is calculated in accordance with FASB ASC 718, excluding
    the effect of estimated forfeitures. See Note 11 to our
    financial statements for a discussion of the assumptions made in
    determining the valuation of option awards.(2)
    
    Includes performance cash bonus awards paid following our
    initial public offering and annual cash performance bonus awards
    paid in 2011 for 2010 performance.(3)
    
    Ms. Kilfoil joined us on March 16, 2010. 82




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##### Table of Contents



Grants of
    Plan-Based Awards
    Estimated Future Payouts


All Other StockUnder Non-Equity Incentive


Awards: Number


Grant Date FairPlan Awards (4)


of Shares of Stock


Value of StockGrant


Target


Maximum


or Units


AwardsName

Date


($)


($)(5)


(#)


($)(3)Paul F. Truex


6/30/2010
(1)










50,000


$
268,0006/30/2010
(2)










36,000


$
192,960$
212,500


$
531,250Christopher P. Lowe


6/30/2010
(1)










22,000


$
117,9206/30/2010
(2)










18,000


$
96,480$
105,000


$
375,000Colin Hislop, M.D.


6/30/2010
(1)










30,000


$
160,8006/30/2010
(2)










10,000


$
53,600$
96,000


$
400,000Debra Odink, Ph.D.


6/30/2010
(1)










20,000


$
107,2006/30/2010
(2)










5,000


$
26,800$
75,000


$
312,500Georgina Kilfoil


6/30/2010
(1)










22,500


$
120,600$
59,400
(6)

$
247,396
(6)     (1)
    
    These restricted stock units vest in equal annual installments
    over four years. The vesting commencement date of these grants
    is June 30, 2010.(2)
    
    These restricted stock units vest in one annual installment. The
    vesting commencement date of these grants is June 30, 2010.(3)
    
    The grant date fair value of each equity award is calculated
    based on the closing sales price of our common stock on the date
    of grant in accordance with FASB ASC 718, excluding the
    effect of estimated forfeitures.(4)
    
    The plan does not have a threshold.(5)
    
    The plan allows for a bonus payment of up to 125% of the
    executive officers salary.(6)
    
    Ms. Kilfoil joined us on March 16, 2010. This number
    is prorated based on her service for the year. 83




---



##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year-End
    Option Awards


Stock AwardsNumber of


Number of








Number of


Market ValueSecurities


Securities








Shares or


of SharesUnderlying


Underlying








Units of


or UnitsUnexercised


Unexercised


Option





Stock That


of StockOptions


Options


Exercise


Option


Have Not


That HaveExercisable


Unexercisable


Price


Expiration


Vested


Not VestedName

(#)


(#)*


($)


Date


(#)


($)(1)Paul F. Truex


362,826






$
0.26



1/23/2017







52,548



13,828
(2)

$
1.51



2/18/2019







16,815



4,425
(3)

$
1.51



2/18/2019







50,000
(7)

$
244,00036,000
(8)

$
175,680Christopher P. Lowe


2,920
(4)





$
0.14



3/6/2016







57,725



17,161
(5)

$
1.34



2/21/2018







36,828



10,949
(6)

$
1.34



2/21/2018







18,497



4,867
(2)

$
1.51



2/18/2019







22,000
(7)

$
107,36018,000
(8)

$
87,840Colin Hislop, M.D.


130,447






$
0.26



1/23/2017



18,497



4,867
(2)

$
1.51



2/18/2019



5,257






$
1.51



4/15/2019



30,000
(7)

$
146,40010,000
(8)

$
48,800Debra Odink, Ph.D.


23,121



6,084
(2)

$
1.51



2/18/2019







20,000
(7)

$
97,6005,000
(8)

$
24,400Georgina Kilfoil


















22,500
(7)

$
109,800     *
    
    Unless otherwise noted in the footnotes, these options vest over
    four years as follows: 25% of the shares vest one year following
    the vesting commencement date, with the remaining 75% vesting in
    equal monthly installments over the next three years. All
    unvested options, pursuant to the 2005 Plan, contain an early
    exercise feature subject to the Companys right of
    repurchase.(1)
    
    Represents the closing market price of our common stock as of
    December 31, 2010 ($4.88) multiplied by the number of
    restricted stock units.(2)
    
    This incentive stock option vests in equal monthly installments
    over four years commencing on August 12, 2008.(3)
    
    This non-statutory stock option vests in equal monthly
    installments over four years commencing on August 12, 2008.(4)
    
    These options were granted to Mr. Lowe on March 6,
    2006 in his capacity as a consultant to the Company and vested
    immediately on the grant date.(5)
    
    The vesting commencement date of this incentive stock option is
    November 26, 2007.(6)
    
    The vesting commencement date of this non-statutory stock option
    is November 26, 2007.(7)
    
    These restricted stock units vest in equal annual installments
    over four years. The vesting commencement date of these grants
    is June 30, 2010.(8)
    
    These restricted stock units vest in one annual installment. The
    vesting commencement date of these grants is June 30, 2010. 84




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##### Table of Contents



Option
    Exercises and Stock Vested
  Options
    Exercised  2010
    Option AwardsNumber ofSharesAcquired


Value Realizedon Exercise


on ExerciseName

(#)


($)(1)Paul F. Truex


23,364


$
158,642Christopher P. Lowe






Colin Hislop, M.D.


14,683


$
43,021Debra Odink, Ph.D.






Georgina Kilfoil






     (1)
    
    This column reflects the value realized for vested options
    exercised in 2010, which represents the difference between the
    market price of our common stock on the date of exercise and the
    exercise price of the stock option.  Stock and
    Benefit Plans
  2005
    Equity Incentive Plan
            Amended
    and Restated 2010 Stock Option and Incentive Plan
   85




---



##### Table of Contents



and/or and/or
       86




---



##### Table of Contents



2010
    Employee Stock Purchase Plan
             87




---



##### Table of Contents



401(k)
    Savings Plan
    Pension
    Benefits
    Nonqualified
    Defined Contribution and Other Nonqualified Defined Compensation
    Plans
    Severance
    and Change in Control Arrangements
        Constructive termination
 88




---



##### Table of Contents



Paul
    F. Truex
    Christopher
    P. Lowe
    Colin
    Hislop, M.D.
    Debra
    Odink, Ph.D.
    Georgina
    Kilfoil
   89




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##### Table of Contents



Potential
    Payments Upon Change in Control and Termination
    Named
    Executive Officer Benefits and Payments Upon
    Termination(1)
  InvoluntaryTermination withinOne Year of ChangeName

in Control(2)Paul F. Truex

$
431,704Christopher P. Lowe

$
305,847Colin Hislop, M.D.

$
163,261Debra Odink, Ph.D.

$
127,878Georgina Kilfoil

$
256,265     (1)
    
    Assumes triggering event effective as of December 31, 2010.
    Upon a voluntary termination or termination for cause, each
    named executive officer would receive any earned but unpaid base
    salary until December 31, 2010. These payments would be
    available to all employees upon termination.(2)
    
    Includes continuation of base salary determined as of
    December 31, 2010 and health, dental and vision benefits
    for 12 months for Mr. Truex, Mr. Lowe and
    Ms. Kilfoil. All other named executive officers receive six
    months continuation of base salary and benefits.  Acceleration
    of Vesting of Options and Stock upon
    Termination(1)
  Number of Shares ofAccelerated Stock and Valueupon InvoluntaryTermination and inConnection with aName

Change in Control(2)Paul F. Truex

$
456,588
(3)Christopher P. Lowe

$
304,550
(4)Colin Hislop, M.D.

$
200,120
(5)Debra Odink, Ph.D.

$
128,150
(6)Georgina Kilfoil

$
109,800
(7)     (1)
    
    Assumes triggering event effective as of December 31, 2010
    and excludes vested stock held as of such date. The market value
    of the accelerated option shares is based on the difference
    between our closing price of $4.88 per share on
    December 31, 2010 and the exercise price of such
    accelerated options. The market value of the accelerated
    restricted stock units is based on the closing price of $4.88
    per share on December 31, 2010.(2)
    
    Includes acceleration of options for 12 months for
    Mr. Truex, Mr. Lowe and Ms. Kilfoil. All other
    named executive officers have six months acceleration of
    options.(3)
    
    10,952 of Mr. Truexs options and 86,000 shares
    of Mr. Truexs restricted stock units would accelerate
    upon involuntary termination and in connection with a change of
    control.(4)
    
    31,030 of Mr. Lowes options and 40,000 shares of
    Mr. Lowes restricted stock units would accelerate
    upon involuntary termination and in connection with a change of
    control.(5)
    
    1,460 of Dr. Hislops options and 40,000 shares
    of Dr. Hislops restricted stock units would
    accelerate upon involuntary termination and in connection with a
    change of control. 90




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##### Table of Contents



(6)
    
    1,825 of Dr. Odinks options and 25,000 shares of
    Dr. Odinks restricted stock units would accelerate
    upon involuntary termination and in connection with a change of
    control.(7)
    
    22,500 shares of Ms. Kilfoils restricted stock
    units would accelerate upon involuntary termination and in
    connection with a change of control.  Compensation
    Committee Interlocks and Insider Participation
    The following Compensation Committee Report is not deemed
    filed with the Securities and Exchange Commission.
    Notwithstanding anything to the contrary set forth in any of the
    Companys filings made under the Securities Act of 1933 or
    the Exchange Act that might incorporate filings made by the
    Company under those statutes, the Compensation  Committee Report
    shall not be incorporated by reference into any prior filings or
    into any future filings made by the Company under those
    statutes.
  Compensation
    Committee Report
  Rule 16b-3
  Regulation S-K,
         David E. Thompson,
    Chairman
 Donald J. Santel
 Peter A. Thompson, M.D.
 91




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##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.  Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Equity Compensation Plan InformationNumber ofSecuritiesRemainingWeighted

Available forNumber of

Average

Future IssuanceSecurities

Exercise

Under Equityto be Issued

Price of

CompensationUpon Exercise of

Outstanding

Plan (ExcludingOutstanding

Options,

SecuritiesOptions, Warrants

Warrants

Referenced inand Rights

and Rights

Column (a))Plan Category

(a) (1)

(b) (2)

(c)Equity compensation plans approved by security holders(3)


1,578,491


$
1.26



110,473
(4)Equity compensation plans not approved by security holders


N/A



N/A



N/ATotal


1,578,491


$
1.26



110,473
(4)     (1)
    
    Includes 302,500 shares issuable upon settlement of outstanding
    restricted stock units with a weighted average grant date fair
    value of $5.13 per share.(2)
    
    Does not take into account shares issuable upon settlement of
    restricted stock units, which have no exercise price.(3)
    
    Consists of our 2005 Plan, our Amended and Restated 2010 Plan
    and our ESPP.(4)
    
    This number includes 75,084 shares that were available for
    future issuance under the ESPP, as of December 31, 2010.
    The 2010 Plan provides that the number of shares reserved and
    available for issuance under the plan will automatically
    increases each January 1, beginning in 2011, by 4% of the
    outstanding number of shares or common stock on the immediately
    preceding December 31. This number is subject to adjustment
    in the event of a stock split, stock dividend or other change in
    our capitalization. Under the ESPP, we have reserved
    100,000 shares of common stock for issuance thereunder plus
    on January 1, 2011 and each January 1 thereafter, the
    number of shares of stock reserved and available for issuance
    under the plan is cumulatively increased by the lesser of
    (i) one percent (1%) of the number of shares of common
    stock issued and outstanding on the immediately preceding
    December 31 or (ii) 250,000 shares of common stock. 92




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##### Table of Contents



Security
    Ownership of Certain Beneficial Owners and Management
          Number of SharesBeneficially


Percent ofName of Beneficial Owner

Owned


Class5% or Greater Stockholders:VantagePoint Venture Partners IV, L.P. and affiliated entities,
    or VantagePoint(1)


6,472,646



19.56
%Caduceus Private Investments IV, LP(2)


4,783,068



13.97
%Sofinnova Venture Partners VI, L.P. and affiliated entities, or
    Sofinnova(3)


4,177,621



12.65
%FRM LLC(4)


2,926,000



8.89
%Visium Balanced Master Fund, Ltd.(5)


2,599,197



7.78
%Columbia Wanger Asset Management, LLC(6)


1,823,600



5.54
%A.M. Pappas Life Science Ventures III, L.P. and affiliated
    entities(7)


1,813,140



5.47
%HBM BioCapital, L.P. and affiliated entities(8)


1,702,471



5.15
%All 5% or greater stockholders as a group


26,297,743



74.27
%Named Executive Officers and Directors:Paul F. Truex(9)


1,133,302



3.40
%Christopher P. Lowe(10)


161,648



*Colin Hislop, M.D.(11)


179,676



*Debra Odink, Ph.D.(12)


120,961



*Georgina Kilfoil(13)


87,616



*Christopher S. Henney, Ph.D.(14)


122,408



*Annette Bianchi(15)


23,332



*James I. Healy, M.D., Ph.D.(16)


4,211,175



12.75
%Donald J. Santel(17)


24,244



*Daniel K. Spiegelman(18)


14,250



*David E. Thompson(19)


37,690



*Peter A. Thompson






All named executive officers and directors as a group
    (12 persons)


6,116,302



17.64
%  93




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##### Table of Contents



*
    
    Represents beneficial ownership of less than 1% of the shares of
    common stock.(1)
    
    Includes (i) 5,695,228 shares of common stock and
    147,861 shares of common stock issuable upon exercise of
    warrants, all owned of record by VantagePoint Venture
    Partners IV (Q), L.P., (ii) 570,147 shares of
    common stock and 14,801 shares of common stock issuable
    upon exercise of warrants, all owned of record by VantagePoint
    Venture Partners IV, L.P., (iii) 20,739 shares of
    common stock and 538 shares of common stock issuable upon
    exercise of warrants, all owned of record by VantagePoint
    Venture Partners IV Principals Fund, L.P., and
    (iv) options to purchase an additional 23,332 shares
    of common stock that are exercisable within 60 days of
    January 31, 2011 that are owned of record by Annette
    Bianchi, over which VantagePoint has sole voting and investment
    power. Ms. Bianchi, a director of Anthera, is a Managing
    Director at VantagePoint. Alan E. Salzman, through his authority
    to cause the general partner of the limited partnerships that
    directly hold such shares to act, may be deemed to have voting
    and investment power with respect to such shares.
    Mr. Salzman disclaims beneficial ownership with respect to
    such shares except to the extent of his pecuniary interest
    therein. The address for VantagePoint Venture Partners is 1001
    Bayhill Drive, Suite 300, San Bruno, CA 94066.(2)
    
    Includes 3,449,734 shares of common stock and
    1,333,334 shares of common stock issuable upon exercise of
    warrants, all owned of record by Caduceus Private Investments,
    LP. OrbiMed Advisors LLC, a registered investment adviser under
    the Investment Advisers Act of 1940, as amended, is the sole
    managing member of OrbiMed Capital GP IV LLC, which is the sole
    general partner of Caduceus Private Investments IV, LP. Samuel
    D. Isaly is the owner of a controlling interesting in OrbiMed
    Advisors LLC. As such, OrbiMed Advisors LLC, OrbiMed Capital GP
    IV LLC and Mr. Isaly may be deemed to have voting and
    investment power with respect to such shares. The address for
    OrbiMed Advisors LLC is 767 Third Avenue, 30th Floor, New York,
    New York 10017.(3)
    
    Includes: (i) 3,360,574 shares of common stock and
    86,996 shares of common stock issuable upon exercise of
    warrants all owned of record by Sofinnova Venture Partners VI,
    L.P.; (ii) 665,820 shares of common stock and
    17,237 shares of common stock issuable upon exercise of
    warrants all owned of record by Sofinnova Venture Partners VI
    GmbH & Co. KG; and (iii) 45,809 shares of
    common stock, all owned of record by Sofinnova Venture
    Affiliates VI, L.P. Alain Azan, Eric Buatois, Michael Powell and
    Dr. James I. Healy are the managing members of the general
    partner of the limited partnership, that directly hold such
    shares, and as such, may be deemed to share voting and
    investment power with respect to such shares. Dr. Healy is
    a director of Anthera. Messrs. Azan, Buatois and Powell and
    Dr. Healy disclaim beneficial ownership, except to the
    extent of their proportionate pecuniary interest in Sofinnova.
    The address for Sofinnova Ventures is 850 Oak Grove Ave., Menlo
    Park, CA 94025.(4)
    
    Based on Schedule 13G filed on February 14, 2011 filed
    on behalf of FMR LLC and Edward C. Johnson 3d, Chairman of FMR
    LLC. Reported holdings consist of 2,926,000 shares of
    common stock beneficially owned by Fidelity
    Management & Research Company (Fidelity),
    a wholly-owned subsidiary of FMR LLC. Edward C. Johnson 3d and
    FMR LLC, through its control of Fidelity, and the funds each has
    sole power to dispose of the 2,926,000 shares owned by the
    funds. Members of the family of Edward C. Johnson 3d, Chairman
    of FMR LLC, are the predominant owners, directly or through
    trusts, of Series B voting common shares of FMR LLC,
    representing 49% of the voting power of FMR LLC. The Johnson
    family group and all other Series B shareholders have
    entered into a shareholders voting agreement under which
    all Series B voting common shares will be voted in
    accordance with the majority vote of Series B voting common
    shares. Accordingly, through their ownership of voting common
    shares and the execution of the shareholders voting
    agreement, members of the Johnson family may be deemed, under
    the Investment Company Act of 1940, to form a controlling group
    with respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson
    3d, Chairman of FMR LLC, has the sole power to vote or direct
    the voting of the shares owned directly by the Fidelity Funds,
    which power resides with the Funds Boards of Trustees.
    Fidelity carries out the voting of the shares under written
    guidelines established by the Funds Boards of Trustees.
    The address for Fidelity is 82 Devonshire Street, Boston,
    Massachusetts 02109.(5)
    
    Based on Schedule 13G/A filed February 10, 2011 on
    behalf of the following persons: Visium Balanced Master Fund,
    LTD, a Cayman Islands corporation (VBMF),Visium
    Asset Management, LP, a Delaware limited partnership
    (VAM), JG Asset, LLC, a Delaware limited liability
    company (JG Asset), and Jacob 94




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##### Table of Contents



Gottlieb. Reported holdings consist of 2,099,197 shares of
    common stock and 500,000 shares of commons stock issuable
    upon exercise of warrants, all owned of record by VBMF. Jacob
    Gottlieb, Managing Member of JG Asset, which is the General
    Partner of VAM, which is the investment manager to pooled
    investment funds, may be deemed to have voting and investment
    power with respect to such shares. The address for Visium
    Balanced Master Fund, Ltd. is 950 Third Avenue, New York, NY
    10022.(6)
    
    Based on Schedule 13G filed on February 10, 2011 on
    behalf of Columbia Wanger Asset Management, LLC.(7)
    
    Based on Schedule 13G/A filed February 10, 2011 on
    behalf of the following persons: A.M. Pappas Life Science
    Ventures III, LP, a Delaware limited partnership (Pappas
    Ventures III), PV III CEO Fund, LP, a Delaware limited
    partnership (the CEO Fund), AMP&A Management
    III, LLC, a Delaware limited liability company (AMP&A
    Management), and Arthur M. Pappas
    (Mr. Pappas). Reported holdings consist of
    (i) 1,505,394 shares of common stock and
    201,638 shares of common stock issuable upon exercise of
    warrants, all owned of record by Pappas Ventures III and
    (ii) 93,572 shares of common stock and
    12,536 shares of common stock issuable upon exercise of
    warrants, all owned of record by the CEO Fund. Mr. Pappas,
    in his role as chairman of the investment committee of
    AMP&A Management, the general partner of Pappas
    Ventures III and CEO Fund, has voting and investment
    authority over these shares. Mr. Pappas disclaims
    beneficial ownership of these shares except to the extent of his
    pecuniary interest arising therein. The address for both Pappas
    Ventures III and CEO Fund is 2520 Meridian Parkway,
    Suite 400, Durham, NC 27713.(8)
    
    Based on Schedule 13G/A filed February 14, 2011 on
    behalf of the following persons: HBM BioCapital (EUR) L.P., a
    Cayman Islands limited partnership (BioCapital EUR),
    HBM BioCapital (USD) L.P., a Cayman Islands limited partnership
    (BioCapital USD) and HBM BioCapital Ltd., a Cayman
    Islands limited company (BioCapital Ltd.). Reporting
    holdings consist of (i) 1,307,840 shares of common
    stock and 139,263 shares of common stock issuable upon
    exercise of warrants, all owned of record by BioCapital (EUR)
    and (ii) 230,793 shares of common stock and
    24,575 shares of common stock issuable upon exercise of
    warrants, all owned of record by BioCapital (USD), together with
    Biocapital (EUR), the HBM BioCapital Funds. The board of
    directors of BioCapital Ltd., the general partner of the HBM
    BioCapital Funds, has sole voting and dispositive power with
    respect to such shares. The board of directors of BioCapital
    Ltd. consists of John Arnold, Sophia Harris, Richard Coles,
    Dr. Andreas Wicki and John Urquhart, none of whom has
    individual voting or investment power with respect to the
    shares. The address for the HBM BioCapital Funds is
    c/o HBM
    BioCapital Ltd., Centennial Towers, 3rd Floor, 2454 West
    Bay Road, Grand Cayman, Cayman Islands.(9)
    
    Includes 698,375 shares of common stock and options to
    purchase an additional 434,927 shares of common stock that
    are exercisable within 60 days of January 31, 2011,
    owned of record by Paul F. Truex.(10)
    
    Includes (i) 9,637 shares of common stock owned of
    recorded by Dina Gonzalez, Mr. Lowes spouse,
    (ii) 27,645 shares of common stock and
    (iii) options to purchase 124,366 shares of common
    stock that are exercisable within 60 days of
    January 31, 2011, owned of record by Mr. Lowe. On
    February 11, 2011, Mr. Lowe transferred his position
    as manager of BioVest III for no consideration and
    transferred 80,997 shares of common stock owned of record
    by BioVest III. The address for BioVest III is 25801
    Industrial Blvd., Suite B, Hayward, CA 94545.(11)
    
    Includes (i) 20,851 shares of common stock,
    (ii) 3,894 shares received by Dr. Hislop on
    February 11, 2011 in a pro rata distribution to the
    partners in Biovest III for no additional consideration,
    and (iii) options to purchase an additional
    154,931 shares of common stock that are exercisable within
    60 days of January 31, 2011, owned of record by
    Dr. Hislop.(12)
    
    Includes 96,928 shares of common stock and options to
    purchase an additional 24,033 shares of common stock that
    are exercisable within 60 days of January 31, 2011,
    all owned of record by the Debra A. Odink Living Trust, for
    which Dr. Odink serves as trustee.(13)
    
    Includes 87,616 shares of common stock held by certain
    family members and for which Ms. Kilfoil is the beneficial
    owner.(14)
    
    Includes 112,408 shares of common stock, 9,979 shares
    of which are subject to the Companys right of repurchase
    and options to purchase an additional 10,000 shares of
    common stock that are exercisable within 60 days of
    January 31, 2011, owned of record by Dr. Henney. 95




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##### Table of Contents



(15)
    
    Includes options to purchase 23,332 shares of common stock
    that are exercisable within 60 days of January 31,
    2011, owned of record by Ms. Bianchi. VantagePoint has sole
    voting and investment power with respect to these shares, and
    Ms. Bianchi disclaims beneficial ownership thereof except
    to the extent of her pecuniary interest in the shares of common
    stock issuable upon exercise of the option.(16)
    
    Includes 20,443 shares of common stock owned of record by
    Dr. Healy, 5,111 shares of which are subject to the
    Companys right of repurchase and options to purchase an
    additional 8,000 shares of common stock that are
    exercisable within 60 days of January 31, 2011, owned
    of record by Dr. Healy.(17)
    
    Includes options to purchase 24,244 shares of common stock
    that are exercisable within 60 days of January 31,
    2011, owned of record by the Donald J. Santel and Kelly L.
    McGinnis Revocable Living Trust.(18)
    
    Includes options to purchase 14,250 shares of common stock
    that are exercisable within 60 days of January 31,
    2011, owned of record by Mr. Spiegelman.(19)
    
    Includes 28,594 shares of common stock and options to
    purchase an additional 9,096 shares of common stock that
    are exercisable within 60 days of January 31, 2011,
    owned of record by Mr. Thompson.  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Transactions
    with Related Persons, Promoters and Certain Control
    Persons
    Private
    Placements of Securities
  2009
    Equity Financing and 2010 Amendments
   96




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##### Table of Contents



Aggregate Consideration


Shares Issuedto be Paid upon Closing


upon Release ofName

of the 2009 Equity Financing


Escrow Account(a)VantagePoint Venture Partners IV, L.P. and affiliated entities,
    or Vantage Point

$
7,586,035
(1)


1,152,891Sofinnova Venture Partners VI, L.P. and affiliated entities, or
    Soffinova

$
4,898,784



744,496A.M. Pappas Life Sciences Ventures III, L.P. and affiliated
    entities, or Pappas

$
1,279,265
(2)


194,416HBM BioCapital, L.P. and affiliated entities, or HBM BioCapital

$
1,417,958
(3)


215,495TOTAL:

$
15,182,042



2,307,298     (a)
    
    Numbers in this column calculated by dividing the
    Aggregate Consideration to be Paid upon Closing of the
    2009 Equity Financing by $6.58 (which equals the price per
    share to the public in our initial public offering less the
    underwriting discounts, commissions and fees).(1)
    
    Includes approximately $6,872,948 to be paid by VantagePoint
    Ventures IV (Q), L.P., approximately $688,053 to be paid by
    VantagePoint Venture Partners IV, L.P. and approximately $25,034
    to be paid by VantagePoint Venture Partners IV Principals
    Fund, L.P.(2)
    
    Includes approximately $1,204,428 to be paid by A.M. Pappas
    Life Science Ventures III, L.P. and approximately $74,837 to be
    paid by PV III CEO Fund, L.P.(3)
    
    Includes approximately $1,205,264 to be paid by HBM BioCapital
    (EUR) L.P. and approximately $212,694 to be paid by HBM
    BioCapital (USD) L.P.    2009
    Escrow Notes and 2010 Amendments
  Series B-2
 97




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##### Table of Contents



Aggregate


Shares Issued uponConsideration


ConversionName

Paid


of Escrow Notes(a)VantagePoint

$
1,553,766
(1)


240,222Sofinnova

$
1,003,366



155,127Pappas

$
262,018
(2)


40,509HBM BioCapital

$
290,425
(3)


44,901TOTAL:

$
3,109,575



480,759     (a)
    
    Calculated by dividing (x) the sum of
    (i) Aggregate Consideration to be Paid and
    (ii) accrued interest by (y) $6.58 (which equals the
    price per share to the public in our initial public offering
    less the underwriting discounts, commissions and fees).(1)
    
    Consists of (i) a convertible promissory note with a
    principal amount of $1,407,712 purchased by VantagePoint Venture
    Partners IV (Q), L.P., (ii) a convertible promissory
    note with a principal amount of $140,927 purchased by
    VantagePoint Venture Partners IV, L.P. and (iii) a
    convertible promissory note with a principal amount of $5,127
    purchased by VantagePoint Venture Partners IV Principals
    Fund, L.P.(2)
    
    Consists of (i) a convertible promissory note with a
    principal amount of $246,690 purchased by A.M. Pappas Life
    Science Ventures III, L.P. and (ii) a convertible
    promissory note with a principal amount of $15,328 purchased by
    PV III CEO Fund, L.P.(3)
    
    Consists of (i) a convertible promissory note with a
    principal amount of $246,861 purchased by HBM BioCapital (EUR)
    L.P. and (ii) a convertible promissory note with a
    principal amount of $43,564 purchased by HBM BioCapital (USD)
    L.P.  September
    2010 Private Placement
   98




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##### Table of Contents



Shares of CommonAggregate


Shares of Common


Stock UnderlyingName

Consideration Paid


Stock Issued


Outstanding WarrantsHBM BioCapital(1)

$
999,999



333,333



133,333Pappas(2)

$
1,400,001



466,667



186,667Caduceus Private Investments IV, LP

$
10,000,002



3,333,334



1,333,334Visium Balanced Master Fund, Ltd.

$
3,750,000



1,250,000



500,000Total

$
16,150,002



5,383,334



2,153,334     (1)
    
    Includes 283,333 shares of common stock and a Warrant to
    purchase 113,333 shares of common stock issued to HBM
    BioCapital (EUR), L.P. and 50,000 shares of common stock
    and a warrant to purchase 20,000 shares of common stock
    issued to HBM BioCapital (USD), L.P.(2)
    
    Includes 439,352 shares of common stock and a Warrant to
    purchase 175,741 shares of common stock issued to
    A.M. Pappas Life Science Ventures III, L.P. and
    27,315 shares of common stock and a Warrant to purchase
    10,926 shares of common stock issued to PV III CEO Fund,
    L.P.  Other
    Related-Party Transaction
    Procedures
    for Approval of Related Person Transactions
    Director
    Independence
    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES  Independent
    Registered Public Accountants Fee Information
    2010


2009Audit Fees(1)

$
486,575


$
362,316Audit Related Fees(2)






Tax Fees(3)

$
65,000



All Other Fees(4)

$
2,200



Total

$
553,775


$
362,316     (1)
    
    Includes fees associated with the annual audit of our financial
    statements, the reviews of our interim financial statements and
    the issuance of consent and comfort letters in connection with
    registration statements, including filing our registration
    statement on
    Form S-1
    for our IPO.(2)
    
    We did not incur any audit related fees. 99




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##### Table of Contents



(3)
    
    Includes fees associated with tax advice and tax planning.(4)
    
    Includes fees associated with our subscription to an online
    library of accounting literatures.  Audit
    Committee Pre-Approval Policies
   100




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##### Table of Contents



PART IV  ITEM 15.  EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES(a) The following documents are filed as part of this
    report:(1)  Index list to Financial Statements:PageReport of Independent Registered Public
    Accounting Firm


102Audited Financial Statements:Balance Sheets


103Statements of Operations


104Statements of Stockholders Equity (Deficit)
    and Comprehensive Income


105Statements of Cash Flows


107Notes to Financial Statements


108   (2)
    Financial Statement Schedules    (3)
    Exhibits   101




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
               102




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC
    (A Development Stage Company)BALANCE SHEETS
  December 31,


December 31,2010


2009ASSETSCURRENT ASSETS:Cash and cash equivalents

$
40,029,972


$
3,803,384Short term investments


23,350,922



Prepaid expenses and other current assets


1,864,883



19,825Total current assets


65,245,777



3,823,209Property and equipment  net


17,285



12,994Deferred financing cost






1,922,183Other assets






130,403TOTAL

$
65,263,062


$
5,888,789LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIES:Accounts payable

$
3,791,693


$
3,145,706Accrued clinical study


3,136,786



565,034Accrued liabilities


467,817



767,663Accrued payroll and related costs


609,086



153,235Warrant and derivative liabilities






406,130Convertible promissory notes






13,129,877Total current liabilities


8,005,382



18,167,645Total liabilities


8,005,382



18,167,645Commitments and Contingencies (Note 5)Stockholders equity (deficit)Preferred stock, $0.001 par value, 5,000,000 and
    11,948,557 shares authorized, 0 and 8,146,308 shares
    issued and outstanding as of December 31, 2010 and 2009,
    respectively; (aggregate liquidation value of $0 and $52,597,692
    as of December 31, 2010 and 2009, respectively)






8,146Common stock, $0.001 par value, 95,000,000 and
    18,443,341 shares authorized; 32,853,032 and
    1,566,199 shares issued and outstanding as of
    December 31, 2010 and 2009, respectively


32,853



1,566Additional paid-in capital


162,919,216



52,941,384Accumulated comprehensive loss


(50,622
)


Deficit accumulated the during the development stage


(105,643,767
)


(65,229,952
)Total stockholders equity (deficit)


57,257,680



(12,278,856
)TOTAL

$
65,263,062


$
5,888,789    103




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)STATEMENTS OF OPERATIONS
  CumulativePeriod fromSeptember 9,2004(Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010OPERATING EXPENSES:Research and development

$
29,456,742


$
8,415,414


$
10,882,322


$
80,780,723General and administrative


6,300,849



3,425,690



2,980,170



16,218,416Total operating expenses


35,757,591



11,841,104



13,862,492



96,999,139LOSS FROM OPERATIONS


(35,757,591
)


(11,841,104
)


(13,862,492
)


(96,999,139
)OTHER INCOME (EXPENSE):Other expense and interest income, net


(859,733
)


(362,388
)


(118,174
)


(539,593
)Mark-to-market
    adjustment of warrant liability


(3,796,491
)










(3,796,491
)Beneficial conversion features










(4,118,544
)


(4,308,544
)Total other income (expense)


(4,656,224
)


(362,388
)


(4,236,718
)


(8,644,628
)NET LOSS

$
(40,413,815
)

$
(12,203,492
)

$
(18,099,210
)

$
(105,643,767
)Net loss per share  basic and diluted

$
(1.76
)

$
(8.06
)

$
(13.47
)Weighted-average number of shares used in per share
    calculation  basic and diluted


22,909,802



1,513,598



1,343,420    104




---



##### Table of Contents



Anthera
    Pharmaceuticals, Inc.
    (A Development Stage Company)STATEMENTS OF STOCKHOLDERS
    EQUITY (DEFICIT)
    AND COMPREHENSIVE LOSS
  DeficitAccumulated

Accumulated

TotalConvertible





Additional

Other

During

StockholdersPreferred Stock

Common Stock

Paid-In

Comprehensive

Development

EquityShares

Amount

Shares

Amount

Capital

Loss

Stage

(Deficit)DATE OF INCEPTION  September 9, 2004Issuance of common stock to founders for cash





$




140,186


$
140


$
100


$



$



$
240Issuance of common stock to founders for service










735,981



736



524











1,260Repurchase of common stock from founder










(73,014
)


(73
)


(52
)










(125
)Issuance of Series A convertible preferred stock for cash
    at $1.47 per share, net of issuance cost of $8,555


526,955



527











766,768











767,295Issuance of Series A convertible preferred stock in
    exchange for service at $1.47 per share


25,575



25











37,631











37,656Issuance of common stock upon exercise of stock options










33,292



33



4,527











4,560Reclass of early exercise of stock options to liability










(29,204
)


(29
)


(3,971
)










(4,000
)Stock-based compensation expense related to consultant options


















842











842Net loss


























(554,427
)


(554,427
)BALANCE  December 31, 2005


552,530



552



807,241



807



806,369







(554,427
)


253,301Conversion of Series A convertible preferred stock to
    Series A-1 convertible preferred stock at a ratio of 1:1






























Issuance of Series A-2 convertible preferred stock for cash
    at $5.14 per share  net of issuance cost of $202,019


1,138,677



1,139











5,645,093











5,646,232Issuance of Series A-2 convertible preferred stock upon
    conversion of convertible promissory notes at $3.85 and $5.14
    per share


224,248



224











961,527











961,751Issuance of Series A-2 convertible preferred stock in
    exchange for licensed technology at $5.14 per share


257,744



258











1,323,524











1,323,782Beneficial conversion feature related to conversion of
    convertible promissory notes into Series A-1 convertible
    preferred stock


















190,000











190,000Issuance of Series B convertible preferred stock for cash
    at $7.28 per share  net of issuance cost of $20,930


2,619,568



2,620











19,036,450











19,039,070Issuance of Series B convertible preferred stock in
    exchange for licensed technology at $7.28 per share


127,297



127











926,091











926,218Issuance of common stock upon exercise of stock options










125,581



126



17,074











17,200Reclass of early exercise of stock options to liability










(36,810
)


(37
)


(5,006
)










(5,043
)Stock-based compensation expense related to consultant options


















4,358











4,358Stock-based compensation expense related to employee options


















4,648











4,648Net loss


























(8,679,246
)


(8,679,246
)BALANCE  December 31, 2006


4,920,064


$
4,920



896,012


$
896


$
28,910,128


$



$
(9,233,673
)

$
19,682,271Issuance of common stock upon exercise of stock options










493,605



494



118,426











118,920Reclass of early exercise of stock options liability










(240,165
)


(240
)


(60,333
)










(60,573
)Issuance of common stock for service










16,355



16



2,434











2,450Stock-based compensation expense related to consultant options


















12,489











12,489Stock-based compensation expense related to employee options


















74,861











74,861Change in other comprehensive loss  unrealized loss
    on investments






















(1,812
)






(1,812
)Net loss


























(25,693,577
)


(25,693,577
)Comprehensive loss






























(25,695,389
)BALANCE  December 31, 2007 (carried forward)


4,920,064



4,920



1,165,807



1,166



29,058,005



(1,812
)


(34,927,250
)


(5,864,971
)  105




---



##### Table of Contents



Anthera Pharmaceuticals, Inc.
 (A Development Stage Company)
  STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 AND COMPREHENSIVE LOSS  (Continued)
   DeficitAccumulated

Accumulated

TotalConvertible





Additional

Other

During

StockholdersPreferred Stock

Common Stock

Paid-In

Comprehensive

Development

EquityShares

Amount

Shares

Amount

Capital

Loss

Stage

(Deficit)BALANCE  December 31, 2007 (brought forward)


4,920,064


$
4,920



1,165,807


$
1,166


$
29,058,005


$
(1,812
)

$
(34,927,250
)

$
(5,864,971
)Conversion of Series B convertible preferred stock to
    Series B-1
    convertible preferred stock at a ratio of 1:1






























Issuance of
    Series B-2
    convertible preferred stock for cash at $7.28 per share
     net of issuance cost of $242,327 and warrants
    issuance (below)


962,066



962











6,512,241











6,513,203Issuance of
    Series B-2
    convertible preferred stock upon conversion of convertible
    promissory notes at $5.46 per share


2,235,661



2,235











12,197,765











12,200,000Issuance of
    Series B-2
    convertible preferred stock in lieu of interest payment at $5.46
    per share


28,517



29











155,601











155,630Issuance of warrants in connection with issuance of
    Series B-2
    convertible preferred stock


















244,478











244,478Beneficial conversion feature related to conversion of
    convertible promissory notes into
    Series B-2
    convertible preferred stock


















4,118,544











4,118,544Issuance of common stock upon exercise of stock options










179,886



180



67,925











68,105Release of early exercise of stock options liability










128,180



128



12,773











12,901Repurchase of common stock upon employee termination










(18,983
)


(19
)


(4,856
)










(4,875
)Stock-based compensation expense related to consultant options


















51,874











51,874Stock-based compensation expense related to employee options


















143,406











143,406Change in other comprehensive loss  unrealized gain
    on investments






















652







652Net loss


























(18,099,210
)


(18,099,210
)Comprehensive loss






























(18,098,558
)BALANCE  December 31, 2008


8,146,308



8,146



1,454,890



1,455



52,557,756



(1,160
)


(53,026,460
)


(460,263
)Issuance of common stock upon exercise of stock options










19,089



19



15,255











15,274Release of early exercise of stock options liability










92,220



92



26,027











26,119Stock-based compensation expense related to consultant options


















88,382











88,382Stock-based compensation expense related to employee options


















253,964











253,964Change in other comprehensive loss  unrealized gain
    on investments






















1,160







1,160Net loss


























(12,203,492
)


(12,203,492
)Comprehensive loss






























(12,202,332
)Balance  December 31, 2009


8,146,308


$
8,146



1,566,199


$
1,566


$
52,941,384


$



$
(65,229,952
)

$
(12,278,856
)Conversion of convertible preferred stock to common stock at a
    ratio of 1:1


(8,146,308
)


(8,146
)


8,146,308



8,146















Issuance of common stock for cash at $7.00 per share
     net of issuance cost of $3,039,257










6,000,000



6,000



37,075,034











37,081,034Issuance of common stock upon conversion of convertible
    promissory notes and accrued interest at $5.25 and $6.28 per
    share










2,511,235



2,511



13,880,601











13,883,112Issuance of common stock upon release of escrow funds










2,598,780



2,599



17,097,373











17,099,972Issuance of common stock upon cashless exercise of warrants










194,474



194



218











412Issuance of common stock to collaborator in lieu of milestone
    payment










531,914



532



3,499,468











3,500,000Issuance of common stock upon exercise of overallotment by
    underwriters net of issuance cost of $17,291










604,492



605



3,959,661











3,960,266Issuance of common stock upon exercise of stock options










138,878



139



115,847











115,986Issuance of common stock pursuant to employee stock purchase plan










24,916



25



81,201











81,226Issuance of common stock upon private placement transaction, net
    of issuance cost of $508,384










10,500,000



10,500



23,767,172











23,777,672Issuance of warrants in conjunction with private placement
    transaction


















5,323,944











5,323,944Net change of early exercise of stock options and liability










35,836



36



1,492











1,528Reclass of warrant and derivative liability to equity in
    conjunction with conversion of convertible promissory notes into
    common stock


















4,473,491











4,473,491Stock-based compensation expense related to consultant options


















8,399











8,399Stock-based compensation expense related to employee options


















693,931











693,931Change in other comprehensive loss  unrealized loss
    on investments and foreign currency translation






















(50,622
)






(50,622
)Net loss


























(40,413,815
)


(40,413,815
)Comprehensive loss






























(40,464,437
)BALANCE  December 31, 2010










32,853,032


$
32,853


$
162,919,216


$
(50,622
)

$
(105,643,767
)

$
57,257,680    106




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)STATEMENTS OF CASH
    FLOWS
  September 9,2004(Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010CASH FLOW FROM OPERATING ACTIVITIES:Net loss

$
(40,413,815
)

$
(12,203,492
)

$
(18,099,210
)

$
(105,643,767
)Adjustments to reconcile net loss to net cash used in operating
    activities:Depreciation


17,281



18,451



21,997



89,608Amortization of premium/(discount) on short-term investments


102,116











(28,132
)Realized loss on short-term investments






1,160



7,522



8,682Realized gain from disposal of property and equipment






(214
)






(214
)Stock-based compensation expense  employees


693,931



253,964



143,406



1,170,810Stock-based compensation expense  consultants


8,399



88,382



51,874



166,344Issuance of common stock for consulting service














41,366Issuance of preferred stock for service and license fee


3,500,000











5,750,000Issuance of preferred stock in lieu of interest payment


173,194







155,630



330,575Beneficial conversion feature










4,118,544



4,308,544Amortization of discount on convertible promissory notes


540,993



136,722







677,715Amortization of debt issuance cost


227,955



79,644







307,599Mark-to-market adjustment on warrant liability


3,796,491



(715
)






3,795,776Changes in assets and liabilities:Prepaid expenses and other assets


(1,845,059
)


51,437



31,182



(1,864,885
)Accounts payable


2,664,378



(212,623
)


(2,176,982
)


4,049,054Accrued clinical study


2,571,752



(896,145
)


65,013



3,136,786Accrued liabilities


(271,223
)


473,889



135,137



460,969Accrued payroll and related costs


455,851



37,190



(578,910
)


609,086License fee payable






(5,000,000
)


(1,000,000
)


Net cash used in operating activities


(27,777,756
)


(17,172,350
)


(17,124,797
)


(82,634,084
)INVESTING ACTIVITIES:Property and equipment purchases


(21,572
)


(3,852
)


(6,752
)


(107,079
)Proceeds from disposal of property and equipment






400







400Purchase of short-term investments


(24,948,692
)










(39,749,256
)Proceeds from sale of short-term investments


1,610,000







5,818,132



16,532,132Restricted cash






40,000



30,000



Net cash provided by (used in) investing activities


(23,360,264
)


36,548



5,841,380



(23,323,803
)FINANCING ACTIVITIES:Proceeds from issuance of convertible notes






13,400,000



12,200,000



26,560,000Payment of debt issuance cost


(210,282
)


(97,317
)






(307,599
)Net proceeds from issuance of preferred stock










6,757,681



32,210,278Payment of financing cost for initial public and private offering


(3,246,255
)


(273,884
)






(3,520,139
)Proceeds from issuance of common stock


90,788,900











90,789,015Proceeds from issuance of common stock pursuant to employee
    stock purchase plan


81,226











81,226Proceeds from exercise of stock options


115,985



15,274



68,105



340,044Net cash provided by financing activities


87,529,574



13,044,073



19,025,786



146,152,825Effect of exchange rate changes on cash


(164,966
)










(164,966
)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


36,226,588



(4,091,729
)


7,742,369



40,029,972CASH AND CASH EQUIVALENTS  Beginning of period


3,803,384



7,895,113



152,744



CASH AND CASH EQUIVALENTS  End of period

$
40,029,972


$
3,803,384


$
7,895,113


$
40,029,972SUPPLEMENTAL CASH DISCLOSURES OF CASH FLOW INFORMATION:Interest paid

$



$



$
1,413


$
15,229Taxes paid

$
23,159


$
4,900


$
4,379


$
52,746NONCASH INVESTING AND FINANCING ACTIVITIES:Conversion of convertible promissory notes and accrued interest
    into common stock,
    Series A-2
    convertible preferred stock and
    Series B-2
    convertible preferred stock

$
13,883,112


$



$
12,355,630


$
27,200,493Beneficial conversion feature

$



$



$
4,118,544


$
4,308,544Unamortized debt discount charged to equity in conjunction with
    conversion of promissory notes into common stock

$
185,883


$



$



$
185,883Reclassification of warrant and derivative liabilities to
    additional paid-in capital

$
406,130


$



$



$
406,130Issuance costs charged to equity

$
3,564,932


$



$



$
3,564,932Accrued and deferred financing and debt issuance costs

$
27,503


$
1,761,029


$



$
27,503    107




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)NOTES TO FINANCIAL STATEMENTS
  1.
    ORGANIZATION
    AND DESCRIPTION OF BUSINESS  A-001, 2 2 A-623,
    Form S-1
     108




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Use of
    Estimates
    Cash
    and Cash Equivalents
    Short-Term
    Investments
    Concentration
    of Credit Risk
    Property
    and Equipment  Net
    Deferred
    Financing Cost
  ASC 340-10, Other Assets and Deferred Costs
 109




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  Long-Lived
    Assets
  ASC 360-10, Property, Plant, and Equipment
  Fair
    Value of Financial Instruments
  ASC 820-10, Fair Value Measurements and Disclosures
    Level 1
  Level 2
  Level 3
        Research
    and Development Costs
   110




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    Research and
    Development
      Accounting for Government Grants and Disclosure of Government
    Assistance
  Comprehensive
    Income (Loss)
    Income
    Taxes
  Income Taxes
  Segments
   111




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  Net
    Loss Per Share
  Earnings Per Share
    Years Ended December 31,2010


2009


2008Net loss per shareNumeratorNet loss

$
(40,413,815
)

$
(12,203,492
)

$
(18,099,210
)DenominatorWeighted-average common shares outstanding


22,957,456



1,623,677



1,573,448Less: Weighted-average shares subject to repurchase


(47,654
)


(110,079
)


(230,028
)Denominator for basic and diluted net loss per share


22,909,802



1,513,598



1,343,420Basic and diluted net loss per share

$
(1.76
)

$
(8.06
)

$
(13.47
)     Years Ended December 31,2010


2009


2008Options to purchase common stock


978,231



932,544



539,234Common stock subject to repurchase


47,654



110,079



230,028Warrants to purchase common stock


1,496,314
(2)


240,516
(1)


94,230
(1)Convertible preferred stock (on an as-if-converted basis)






8,146,308



6,184,045Restricted stock units


153,658







2,675,857



9,429,447



7,047,537     (1)
    
    The warrants were exercised upon the closing of the
    Companys IPO in March 2010.(2)
    
    Consists of 357,136 warrants which carry a contractual term of
    five years and terminate upon the earlier of i) five years
    from the date of issuance which will be July 17 or
    September 9, 2014 and ii) upon certain corporate
    transactions and 1,139,178 warrants which carry a contractual
    term of five years expiring September 24, 2015. Each of the
    warrants contains a customary net issuance feature, which allows
    the warrant holder to pay the 112




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  exercise price of the warrant by forfeiting a portion of the
    executed warrant shares with a value equal to the aggregate
    exercise price.  Stock-Based
    Compensation
  Compensation 
    Stock Compensation
    Expected Term
  Expected Volatility
  Expected Dividend
  Risk-Free Interest Rate
  Estimated Forfeitures
  ASC 505-50, Equity
  3.
    DEFERRED
    FINANCING COST    4.
    PREPAID
    EXPENSES AND OTHER CURRENT ASSETS    December 31,2010


2009Prepaid insurance

$
405,385


$
4,331Grant receivable


977,917



Interest receivable


446,949



11Other current assets


34,632



15,483Prepaid expense and other current assets

$
1,864,883


$
19,825  113




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  5.
    PROPERTY
    AND EQUIPMENT    December 31,2010


2009Computers and software

$
77,318


$
66,548Office equipment and furniture


16,730



16,730Leasehold improvements


10,802



Total property and equipment


104,850



83,278Less accumulated depreciation


(87,565
)


(70,284
)Property and equipment, net

$
17,285


$
12,994     Period fromSeptember 9,2004 (Date ofInception) toYears Ended December 31,

December 31,2010

2009

2008

2010Depreciation expense

$
17,281


$
18,451


$
21,997


$
89,608   6.
    CASH
    EQUIVALENTS AND INVESTMENTS    GrossAmortized


UnrealizedCost


Losses


Fair ValueCash

$
15,499,182


$



$
15,499,182Money market funds


19,467,096







19,467,096Certificates of deposit


14,478,000



(6,765
)


14,471,235Corporate bonds


4,010,563



(83
)


4,010,480Investments in foreign sovereign debt


10,017,010



(84,109
)


9,932,901Total


63,471,851



(90,957
)


63,380,894Less amounts classified as cash and cash equivalents


(40,045,129
)


15,157



(40,029,972
)Total

$
23,426,722


$
(75,800
)

$
23,350,922     7.
    FAIR
    VALUE OF INSTRUMENTS  other-than-temporarily
 114




---



##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    EstimatedFair Value


Level 1


Level 2


Level 3Money market funds

$
19,467,096


$
19,467,096


$



$
Certificates of deposit


14,471,235







14,471,235



Corporate bonds


4,010,480







4,010,480



Investments in foreign sovereign debt


9,932,901







9,932,901



Total

$
47,881,712


$
19,467,096


$
28,414,616


$
     8.
    COMMITMENTS
    AND CONTINGENCIES  Leases
    Period fromSeptember 9,2004 (Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Office rental expense

$
134,231


$
165,016


$
111,506


$
532,256Equipment rental expense


23,302



17,219



15,216



58,557Total

$
157,533


$
182,235


$
126,722


$
590,813     Other
    Commitments
  2 2 A-001. Series A-2 Series B-1 VISTA-16
 115




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    A-623
  country-by-country product-by-licensed
  9.
    CONVERTIBLE
    PROMISSORY NOTES AND EQUITY FINANCING    Series A-2 Series A-2
  Series A-2 Series A-2 Series A-2
  Series B-2
 116




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  Series B-2
  Series B-2 Series B-2 Series B-2
      10.
    STOCKHOLDERS
    EQUITY  Common
    Stock
      Common stock warrants outstanding


4,557,136Common stock options outstanding


1,275,991Restricted stock units outstanding


302,500Common stock options available for future grant under stock
    option plan


35,389Total


6,171,016   Convertible
    Preferred Stock
   117




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    Warrants
  Series B-2
  , Distinguishing
    Liabilities from Equity
  March 31,


December 31,


September 30,2010


2009


2009Expected Volatility


94
%


78
%


78
%Dividend Yield


0
%


0
%


0
%Risk-Free Interest Rate


2.28
%


2.34
%


2.38
%Expected Term (years)


5.00



5.00



5.00   paid-in-capital
   118




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
      Embedded
    Derivative
  Derivatives and
    Hedging
 119




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  11.
    STOCK-BASED
    AWARDS  Option
    Plan
         120




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    Weighted-Weighted-

AverageAverage

Remaining

AggregateNumber of


Exercise

Contractual

IntrinsicOptions


Price

Life in Years

ValueBalance at December 31, 2007


847,735



$0.26



8.08Options granted


327,973



$1.34Options exercised


(179,886
)


$0.38Options cancelled


(38,697
)


$0.42Repurchase






$0.26Balance at December 31, 2008


957,125



$0.60



8.28Options granted


405,358



$1.69Options exercised


(19,089
)


$0.80Options cancelled


(19,618
)


$0.92Balance at December 31, 2009


1,323,776



$0.92



7.94Options granted


112,000



$4.82Options exercised


(138,878
)


$0.84Options cancelled


(20,907
)


$1.50Repurchase






$0.26Balance at December 31, 2010


1,275,991



$1.26



7.07



$4,700,543Ending vested at December 31, 2010


1,049,865



$0.97



6.81



$4,138,497Ending vested and expected to vest at December 31, 2010


1,275,991



$1.26



7.07



$4,700,543   in-the-money
  Period fromSeptember 9,2004 (Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Weighted-average fair value per share granted

$
3.10


$
1.01


$
0.96


$
0.57Intrinsic value of options exercised

$
699,366


$
13,550


$
109,741


$
828,200Proceeds received from the exercise of stock options

$
115,986


$
15,274


$
68,105


$
345,151Grant date fair value of options vested

$
235,232


$
358,121


$
113,166


$
819,565    121




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    Outstanding, Vested and Expected to Vest


Options VestedWeighted-AverageRemaining


Weighted AverageNumber of


Contractual Life


Exercise


Number ofRange of Exercise Price

Shares


(In Years)


Price


Shares$0.14  $0.14


4,672



3.33


$
0.14



4,672$0.26  $0.26


567,161



6.14


$
0.26



559,969$1.34  $1.34


246,352



7.16


$
1.34



180,053$1.51  $1.51


334,124



7.71


$
1.51



257,239$4.19  $7.70


123,682



9.56


$
5.09



47,9321,275,991



7.07


$
1.26



1,049,865     Restricted
    Stock Units
      Weighted-AverageGrantDate FairShares


ValueOutstanding at December 31, 2009






Restricted stock units granted


333,000


$
5.15Restricted stock units vested






Restricted stock units forfeitures and cancellations


(30,500
)

$
5.36Outstanding at December 31, 2010


302,500


$
5.13   Early
    Exercise of Employee Options
   122




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
      Weighted-AverageUnvested Shares

Shares


Grant PriceBalance as of December 31, 2007


289,824


$
0.24Early exercise of options


59,191


$
0.62Vested


(168,386
)

$
0.22Repurchases


(18,983
)

$
0.26Balance as of December 31, 2008


161,646


$
0.34Early exercise of options


4,381


$
1.51Vested


(96,603
)

$
0.35Balance as of December 31, 2009


69,424


$
0.45Early exercise of options


18,011


$
1.37Vested


(53,847
)

$
0.34Repurchases


(6,267
)

$
0.26Balance as of December 31, 2010


27,321


$
1.02   2010
    Employee Stock Purchase Plan
    ASC 718-50-25-2, Compensation  Stock Compensation 
    Employee Share Purchase Plans  Recognition
 123




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    Period fromSeptember 9,2004 (Date ofYear Ended


Inception) toDecember 31,


December 31,2010


2010Expected Volatility


67
%


67
%Dividend Yield


0
%


0
%Risk-Free Interest Rate


0.16
%


0.16
%Expected Term (years)


0.33



0.33     Stock-Based
    Compensation Expense
    Period fromSeptember 9,2004 (Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Research and development

$
223,229


$
101,395


$
45,544


$
417,231General and administrative


470,702



152,569



97,862



753,579Total employee stock-based compensation

$
693,931


$
253,964


$
143,406


$
1,170,810     Period fromSeptember 9,2004 (Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Expected Volatility


69
%


74
%


81
%


79
%Dividend Yield


0
%


0
%


0
%


0
%Risk-Free Interest Rate


1.91
%


2.10
%


3.08
%


3.86
%Expected Term (years)


6.25



6.25



6.25



6.25   Nonemployee
    Stock-Based Compensation
   124




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    Period fromSeptember 9,2004 (Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Expected Volatility


98
%


98
%


98
%


98
%Dividend Yield


0
%


0
%


0
%


0
%Risk-Free Interest Rate


3.16
%


3.57
%


3.67
%


3.67
%Expected Term (years)


7.86



9.94



9.26



9.63     12.
    EMPLOYEE
    BENEFIT PLAN    13.
    INCOME
    TAXES        December 31,2010


2009Deferred tax assets:Net operating loss carryforwards

$
33,300,399


$
20,254,375Tax credits


3,543,005



2,378,197Intangible assets


3,014,136



3,279,699Accrued bonus


230,189



61,040Accrued liabilities


1,249,792



91,529Stock-based compensation


269,661



68,439Other


34,109



5,828Total deferred tax assets


41,641,291



26,139,107Deferred tax liabilities






Valuation allowance


(41,641,291
)


(26,139,107
)Net deferred tax asset

$



$
  125




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
    December 31,2010


2009


2008Statutory rate


34
%


34
%


34
%State tax


7
%


6
%


5
%Tax credit


2
%


1
%


2
%Beneficial conversion feature


0
%


0
%


(8
)%Other


(4
)%


(3
)%


0
%Valuation allowance


(38
)%


(38
)%


(33
)%Effective tax rates


0
%


0
%


0
%       Amount


Expiration YearsNet operating losses  federal

$
83,553,933


Beginning 2024Net operating losses  state

$
83,848,589


Beginning 2014Tax return credits  federal

$
2,491,822


Beginning 2024Tax return credits  state

$
1,592,701


Not applicable       AmountBalance as December 31, 2007

$
646,181Additions based on tax positions related to current year


162,381Balance as of December 31, 2008


808,562Additions based on tax positions related to current year


83,848Balance as of December 31, 2009


892,410Additions based on tax positions related to current year


469,098Balance as of December 31, 2010

$
1,361,508  126




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
      14.
    SELECTED
    QUARTERLY FINANCIAL DATA (unaudited)  Quarter EndedMarch 31,


June 30,


September 30,


December 31,2010OPERATING EXPENSES:Research and development

$
5,241,814


$
6,438,149


$
6,885,125


$
10,891,654General and administrative


1,224,110



1,509,869



1,510,021



2,056,849LOSS FROM OPERATIONS


(6,465,924
)


(7,948,018
)


(8,395,146
)


(12,948,503
)Other expense and interest income, net


(4,637,868
)


11,655



61,606



(91,617
)NET LOSS

$
(11,103,792
)

$
(7,936,363
)

$
(8,333,540
)

$
(13,040,120
)Net loss per share  basic and diluted

$
(0.83
)

$
(0.36
)

$
(0.36
)

$
(0.40
)Shares used in computing basic and diluted net loss per share


13,344,231



22,223,941



22,964,279



32,828,697   Quarter EndedMarch 31,


June 30,


September 30,


December 31,2009OPERATING EXPENSES:Research and development

$
2,914,766


$
2,286,415


$
2,525,948


$
688,285General and administrative


846,243



999,331



884,908



695,208LOSS FROM OPERATIONS


(3,761,009
)


(3,285,746
)


(3,410,856
)


(1,383,493
)Other expense and interest income, net


(24,351
)


(50,310
)


(193,556
)


(94,171
)NET LOSS

$
(3,785,360
)

$
(3,336,056
)

$
(3,604,412
)

$
(1,477,664
)Net loss per share  basic and diluted

$
(2.57
)

$
(2.23
)

$
(2.37
)

$
(0.95
)Shares used in computing basic and diluted net loss per share


1,470,722



1,496,011



1,520,875



1,557,708  127




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##### Table of Contents



ANTHERA
    PHARMACEUTICALS, INC.
    (A Development Stage Company)
    NOTES TO FINANCIAL
    STATEMENTS  (Continued)
  15.
    RELATED
    PARTY TRANSACTIONS    Period fromSeptember 9,2004(Date ofInception) toYears Ended December 31,


December 31,2010


2009


2008


2010Project management fees

$
533,617


$
38,274


$
22,200


$
665,191     16.
    SUBSEQUENT
    EVENTS    17.
    RECENT
    ACCOUNTING PRONOUNCEMENTS   128




---



##### Table of Contents



SIGNATURES      By:
    /s/  Paul
    F. Truex        POWER OF
    ATTORNEY
      Signature

Title

Date/s/  Paul
    F. TruexPaul
    F. Truex

President, Chief Executive
    Officer and Director
    (Principal Executive Officer)

March 7, 2011/s/  Christopher
    P. LoweChristopher
    P. Lowe

Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 7, 2011/s/  Christopher
    S. HenneyChristopher
    S. Henney

Chairman of the Board of Directors

March 7, 2011/s/  Annette
    BianchiAnnette
    Bianchi

Director

March 7, 2011/s/  James
    I. HealyJames
    I. Healy

Director

March 7, 2011/s/  Donald
    J. SantelDonald
    J. Santel

Director

March 7, 2011/s/  Daniel
    K. SpiegelmanDaniel
    K. Spiegelman

Director

March 7, 2011/s/  David
    E. ThompsonDavid
    E. Thompson

Director

March 7, 2011/s/  Peter
    A. ThompsonPeter
    A. Thompson

Director

March 7, 2011  129




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##### Table of Contents



Exhibit
    Index  Number

Description3
.1

Fifth Amended and Restated Certificate of Incorporation(1)3
.2

Amended and Restated Bylaws(2)4
.1

Specimen certificate evidencing shares of common stock(3)4
.2

Second Amended and Restated Investor Rights Agreement by and
    among the Company and the other persons and entities party
    thereto, dated as of July 17, 2009(3)# 10
.1

2005 Equity Incentive Plan and form agreements thereunder(4)# 10
.2

Amended and Restated 2010 Stock Option and Incentive Plan(5)# 10
.3

Form of Amended and Restated Indemnification Agreement(4)# 10
.4

Form of Amended and Restated Change in Control Agreement(6)# 10
.5

Form of Amended and Restated Severance Benefits Agreement(6)+ 10
.6

License Agreement among Eli Lilly and Company, Shionogi &
    Co., Ltd. and the Company, dated as of July 31, 2006(4)+ 10
.7

Agreement between Shionogi & Co., Ltd. and the Company,
    dated as of September 7, 2009 (amending License Agreement among
    Eli Lilly and Company, Shionogi & Co., Ltd. and the
    Company, dated as of July 31, 2006)(4)+ 10
.8

Agreement between Eli Lilly and Company and the Company, dated
    as of September 15, 2009 (amending License Agreement among Eli
    Lilly Company, Shionogi & Co., Ltd. and the Company, dated
    as of July 31, 2006)(4)+ 10
.9

Amended and Restated Technology Transfer Letter Agreement
    between Eli Lilly and Company and the Company, dated as of July
    12, 2006(4)+ 10
.10

License Agreement between Amgen Inc. and the Company, dated as
    of December 18, 2007(4)10
.11

Consent to Sublease, by and among the Company, NewTower Trust
    Company Multi-Employer Property Trust and Guava Technologies,
    dated as of September 12, 2008(4)10
.12

Sublease by and between the Company and Guava Technologies,
    dated as of August 1, 2008(4)10
.13

Note and Warrant Purchase Agreement by and among the Company and
    the other persons and entities party thereto, dated as of July
    17, 2009(4)10
.14

Form of Senior Secured Promissory Note sold pursuant to that
    Note and Warrant Purchase Agreement, dated as of July 17, 2009(4)10
.15

Form of Stock Purchase Warrant sold pursuant to that Note and
    Warrant Purchase Agreement, dated as of July 17, 2009(4)10
.16

Stock Purchase Agreement by and among the Company and the other
    persons and entities party thereto, dated as of September 25,
    2009(6)10
.17

Escrow Agreement by and among the Company, Fremont Bank and the
    other persons and entities party thereto, dated as of September
    25, 2009(6)10
.18

Amendment No. 1 to License Agreement between Amgen Inc. and the
    Company, dated as of October 16, 2009(6)10
.19

Amendment No. 1 to Stock Purchase Agreement and Escrow Agreement
    by and among the Company and the other persons and entities
    party thereto, dated as of November 3, 2009(7)10
.20

Amendment No. 2 to Stock Purchase Agreement and Escrow Agreement
    by and among the Company and the other persons and entities
    party thereto, dated as of December 11, 2009(3)10
.21

Note Purchase Agreement by and among the Company and the other
    persons and entities party thereto, dated as of December 11,
    2009(3)10
.22

Form of Senior Secured Promissory Note sold pursuant to that
    certain Note Purchase Agreement, dated as of December 11, 2009(3)10
.23

Form of Senior Secured Promissory Note to be exchanged pursuant
    to that certain Note Purchase Agreement, dated as of December
    11, 2009(3)10
.24

Form of Stock Purchase Warrant issued pursuant to that certain
    Note Purchase Agreement, dated as of December 11, 2009(3)




---



##### Table of Contents



Number

Description10
.25

Agreement between Eli Lilly and Company and the Company, dated
    as of January 28, 2010 (amending Agreement between the parties,
    dated as of September 15, 2009)(3)10
.26

Agreement between Shionogi & Co., Ltd. and the Company,
    dated as of February 24, 2010 (amending the Agreement between
    the parties, dated as of September 7, 2009)(8)10
.27

Amendment No. 3 to Stock Purchase Agreement and Escrow Agreement
    by and among the Company and the other persons and entities
    party thereto, dated as of February 24, 2010(8)10
.28

Amendment No. 1 to Note Purchase Agreement by and between the
    Company and the other persons and entities party thereto, dated
    as of February 24, 2010(8)# 10
.29

2010 Employee Stock Purchase Plan(9)# 10
.30

Employment Agreement by and between the Company and James
    Pennington, effective as of May 1, 2010(10)# 10
.32

Form of Non-Qualified Stock Option Agreement for Company
    Employees Under the Anthera Pharmaceuticals, Inc. 2010 Stock
    Option and Incentive Plan(11)# 10
.33

Form of Non-Qualified Stock Option Agreement for Non-Employee
    Directors Under the Anthera Pharmaceuticals, Inc. 2010 Stock
    Option and Incentive Plan(11)# 10
.34

Form of Incentive Stock Option Agreement Under the Anthera
    Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(11)# 10
.35

Form of Restricted Stock Award Agreement Under the Anthera
    Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(11)# 10
.36

Restricted Stock Unit Award Agreement Under the Anthera
    Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(12)10
.37

Form of Securities Purchase Agreement, among the Company and the
    purchasers thereto, dated September 20, 2010(13)10
.38

Form of Registration Rights Agreement, between the Company and
    the Holders thereto, dated September 20, 2010(14)10
.39

Form of Warrant sold pursuant to that Securities Purchase
    Agreement, among the Company and the purchasers thereto, dated
    September 20, 2010(15)10
.40

First Addendum to Sublease by and between the Company and
    Millipore Corporation, as successor in interest to Guava
    Technologies, dated as of September 24, 2010(16)10
.41

Second Addendum to Sublease by and between the Company and
    Millipore Corporation, as a successor in interest to Guava
    Technologies, dated as of January 12, 2011.10
.42

Amendment No. 1 to 2010 Employee Stock Purchase Plan14
.1

Code of Ethics21
.1

Subsidiary of Anthera Pharmaceuticals, Inc.(4)23
.1

Consent of Deloitte & Touche LLP, independent registered
    public accounting firm24
.1

Power of Attorney (included on signature page hereto)31
.1

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.31
.2

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.32
.1

Certification of Principal Executive 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 2002.32
.2

Certification of 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 Section 906
    of the Sarbanes-Oxley Act of 2002.     +
    
    Certain provisions of this Exhibit have been omitted pursuant to
    a request for confidential treatment#
    
    Indicates management contract or compensatory plan, contract or
    agreement(1)
    
    Filed as Exhibit 3.6 to the registrants Amendment
    No. 4 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed February 3, 2010 and incorporated herein by reference.




---



##### Table of Contents



(2)
    
    Filed as Exhibit 3.7 to the registrants Amendment
    No. 4 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed February 3, 2010 and incorporated herein by reference.(3)
    
    Filed as the same numbered exhibit to the registrants
    Amendment No. 3 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed January 29, 2010 and incorporated herein by reference.(4)
    
    Filed as the same numbered exhibit to the registrants
    Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed September 15, 2009 and incorporated herein by
    reference.(5)
    
    Filed as Appendix A to the registrants Definitive
    Proxy Statement on Schedule 14A filed June 8, 2010 and
    incorporated herein by reference.(6)
    
    Filed as the same numbered exhibit to the registrants
    Amendment No. 1 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed October 19, 2009 and incorporated herein by reference.(7)
    
    Filed as the same numbered exhibit to the registrants
    Amendment No. 2 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed November 16, 2009 and incorporated herein by
    reference.(8)
    
    Filed as the same numbered exhibit to the registrants
    Post-Effective Amendment No. 1 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed February 26, 2010 and incorporated herein by
    reference.(9)
    
    Filed as Appendix B to the registrants Definitive
    Proxy Statement on Schedule 14A filed June 8, 2010 and
    incorporated herein by reference.(10)
    
    Filed as Exhibit 10.1 to the registrants Current
    Report on
    Form 8-K
    filed June 4, 2010 and incorporated herein by reference(11)
    
    Filed as Exhibit 10.2 to the registrants Amendment
    No. 4 to Registration Statement on
    Form S-1
    (File
    No. 333-161930),
    filed February 3, 2010 and incorporated herein by reference.(12)
    
    Filed as Exhibit 10.1 to the registrants Quarterly
    Report on
    Form 10-Q
    filed May 14, 2010 and incorporated herein by reference.(13)
    
    Filed as Exhibit 10.1 to the registrants Current
    Report on
    Form 8-K
    filed September 22, 2010 and incorporated herein by
    reference.(14)
    
    Filed as Exhibit 10.2 to the registrants Current
    Report on
    Form 8-K
    filed September 22, 2010 and incorporated herein by
    reference.(15)
    
    Filed as Exhibit 4.1 to the registrants Current
    Report on
    Form 8-K
    filed September 22, 2010 and incorporated herein by
    reference.(16)
    
    Filed as the same numbered exhibit to the registrants
    Registration Statement on
    Form S-1
    (File
    No. 333-170099),
    filed October 22, 2010 and incorporated herein by reference.