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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 00-50626
 CYCLACEL PHARMACEUTICALS, INC.
  Delaware
(State or Other Jurisdiction 
of Incorporation or Organization)
    
    91-1707622
(I.R.S. Employer
Identification No.)200 Connell Drive 
Suite 1500
Berkeley Heights, New Jersey
(Address of principal executive offices)
    
    07922
(Zip Code)
   Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value
    
    The NASDAQ Stock Market LLCPreferred Stock, $0.001 par value
    
    The NASDAQ Stock Market LLC
  o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    

Smaller
reporting company þ[Do not check if a smaller reporting company]
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    5Item 1A. Risk Factors
    
    
    29Item 1B. Unresolved Staff Comments
    
    
    53Item 2. Properties
    
    
    53Item 3. Legal Proceedings
    
    
    53Item 4. (Removed and Reserved)
    
    
    53PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    54Item 6. Selected Financial Data
    
    
    56Item 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    58Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    75Item 8. Financial Statements and Supplementary Data
    
    
    76Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
    
    
    128Item 9A. Controls and Procedures
    
    
    128Item 9B. Other Information
    
    
    130PART IIIItem 10. Directors; Executive Officers and Corporate Governance
    
    
    131Item 11. Executive Compensation
    
    
    137Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    147Item 13. Certain Relationships and Related Transactions, and Director
Independence
    
    
    150Item 14. Principal Accountant Fees and Services
    
    
    150PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    152Exhibit 3.2Exhibit 10.13Exhibit 10.14Exhibit 21Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Explanatory Note
 Overview of Restatement
  (a)
    
    consolidated balance sheets as of March 31, 2009, June 30, 2009, September 30, 2009,
December 31, 2009, March 31, 2010, June 30, 2010, and September 30, 2010 and statement of
stockholders equity for the year ended December 31, 2009; and
 (b)
    
    Selected Financial Data as of and for the year ended December 31, 2009.
  (a)
    
    restates its consolidated balance sheet as of December 31, 2009 and its statement of
stockholders equity for the year ended December 31, 2009;
 (b)
    
    amends its Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) as it relates to the year ended December 31, 2009;
 (c)
    
    restates its Selected Financial Data as of and for the year ended December 31, 2009;
and
 (d)
    
    restates its unaudited consolidated balance sheets as of March 31, 2009, June 30, 2009,
September 30, 2009, March 31, 2010, June 30, 2010, and September 30, 2010.
 Background on the Restatement
  Accounting for Preferred Stock Dividends
   3




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Effects of the Restatement
  As ofMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,
    
    
    March 31,
    
    
    June 30,
    
    
    September 30,2009
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    2010
    
    
    2010
    
    
    2010$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    
    
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Other current liabilitiesAs originally reported
    
    
    578
    
    
    
    777
    
    
    
    1,336
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aAdjustment
    
    
    (307
    )
    
    
    (614
    )
    
    
    (921
    )
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aAs restated
    
    
    271
    
    
    
    163
    
    
    
    415
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aAccrued and other current
liabilitiesAs originally reported
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    6,709
    
    
    
    5,818
    
    
    
    5,255
    
    
    
    5,641Adjustment
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    (1,228
    )
    
    
    (1,443
    )
    
    
    (1,032
    )
    
    
    (1,213
    )As restated
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    5,481
    
    
    
    4,375
    
    
    
    4,223
    
    
    
    4,428Current liabilitiesAs originally reported
    
    
    8,549
    
    
    
    10,686
    
    
    
    9,328
    
    
    
    9,822
    
    
    
    9,511
    
    
    
    8,155
    
    
    
    7,965Adjustment
    
    
    (307
    )
    
    
    (614
    )
    
    
    (921
    )
    
    
    (1,228
    )
    
    
    (1,443
    )
    
    
    (1,032
    )
    
    
    (1,213
    )As restated
    
    
    8,242
    
    
    
    10,072
    
    
    
    8,407
    
    
    
    8,594
    
    
    
    8,068
    
    
    
    7,123
    
    
    
    6,752Total liabilitiesAs originally reported
    
    
    9,966
    
    
    
    11,212
    
    
    
    9,595
    
    
    
    9,822
    
    
    
    9,511
    
    
    
    8,155
    
    
    
    7,965Adjustment
    
    
    (307
    )
    
    
    (614
    )
    
    
    (921
    )
    
    
    (1,228
    )
    
    
    (1,443
    )
    
    
    (1,032
    )
    
    
    (1,213
    )As restated
    
    
    9,659
    
    
    
    10,598
    
    
    
    8,674
    
    
    
    8,594
    
    
    
    8,068
    
    
    
    7,123
    
    
    
    6,752Additional paid-in capitalAs originally reported
    
    
    222,886
    
    
    
    222,932
    
    
    
    225,864
    
    
    
    226,881
    
    
    
    244,991
    
    
    
    248,314
    
    
    
    250,466Adjustment
    
    
    307
    
    
    
    614
    
    
    
    921
    
    
    
    1,228
    
    
    
    1,528
    
    
    
    1,632
    
    
    
    1,813As restated
    
    
    223,193
    
    
    
    223,546
    
    
    
    226,785
    
    
    
    228,109
    
    
    
    246,519
    
    
    
    249,946
    
    
    
    252,279Deficit accumulated during the development stageAs originally reported
    
    
    (207,778
    )
    
    
    (214,824
    )
    
    
    (217,948
    )
    
    
    (222,285
    )
    
    
    (227,815
    )
    
    
    (234,240
    )
    
    
    (238,049
    )Adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    (600
    )
    
    
    (600
    )As restated
    
    
    (207,778
    )
    
    
    (214,824
    )
    
    
    (217,948
    )
    
    
    (222,285
    )
    
    
    (227,900
    )
    
    
    (234,840
    )
    
    
    (238,649
    )Total stockholders equityAs originally reported
    
    
    15,201
    
    
    
    8,248
    
    
    
    7,947
    
    
    
    4,644
    
    
    
    17,265
    
    
    
    14,154
    
    
    
    12,426Adjustment
    
    
    307
    
    
    
    614
    
    
    
    921
    
    
    
    1,228
    
    
    
    1,443
    
    
    
    1,032
    
    
    
    1,213As restated
    
    
    15,508
    
    
    
    8,862
    
    
    
    8,868
    
    
    
    5,872
    
    
    
    18,708
    
    
    
    15,186
    
    
    
    13,639
 
 n/a  not applicable     4




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PART I
 
 Item 1.
    
    Business
  General
  Recent Developments
   Corporate information
  Overview
  Clinical programs
  
    
    AML in the elderly;
    
    Myelodysplastic syndromes, or MDS; and
    
    Non-small cell lung cancer, or NSCLC.
  5




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
    
    In January 2011, we opened enrollment of the SEAMLESS pivotal Phase 3 trial as a
front-line treatment of elderly patients aged 70 years or older with newly diagnosed AML
who are not candidates for intensive induction chemotherapy under an SPA, reached with the
FDA;
 
    
    In December 2010, we announced one-year survival data for sapacitabine Phase 2 trial for
older patients with MDS refractory to the hypomethylating agents azacitidine and/or
decitabine at the 2010 American Society of Hematology (ASH) annual meeting;
 
    
    In October 2010, we published preclinical model data demonstrating sapacitabine works
synergistically with histone deacetylase (HDAC) inhibitors to induce tumor cell death in
vitro and in vivo;
 
    
    In July 2010, we announced that the FDA granted orphan drug designation to our
sapacitabine product candidate for the treatment of both AML and MDS; and
 
    
    In June 2010, we reported interim response data for the ongoing Phase 2 clinical trial
of sapacitabine in older patients with MDS at the American Society of Clinical Oncology, or
ASCO, meeting.
  Advancing our additional research and development programs
  
    
    In December 2010, we announced topline data from the APPRAISE, Phase 2b,
randomized discontinuation, double-blinded, placebo-controlled study of oral
seliciclib capsules as a third line or later treatment in patients with NSCLC
showing no difference in median progression free survival (PFS) between the
seliciclib and placebo arms (48 versus 53 days respectively), but an increase in
median overall survival (OS) favoring seliciclib over placebo (388 versus 218
days);
    
    In December 2010, preclinical data from a Cyclacel collaboration was presented
at the 2010 ASH Annual Meeting demonstrating that CYC065 is cytotoxic at
sub-micromolar concentrations against myeloma cell lines and CD138+ myeloma cells
derived from patients. CYC065 demonstrated antiproliferative activity even in the
presence of the growth stimulatory effects of both cytokines and bone marrow
stromal cells. CYC065 induced apoptosis in myeloma cells as evidenced by the
appearance of cleaved PARP;
    
    In April 2010, preclinical data from a Cyclacel collaboration was presented at
the 2010 Annual Meeting of the American Association of Cancer Research (AACR)
introducing CYC065, Cyclacels oral CDK inhibitor, which has the same target
profile as seliciclib, and showing that CYC065 induced apoptosis in HER2 positive
breast cancer cell lines refractory to trastuzumab (Herceptin®). CYC065 was also
shown in preclinical studies to have anticancer activity in AML cell lines,
including those with human mixed-lineage leukemia (MLL) rearrangements, and chronic
lymphocytic leukemia (CLL) cells;
    
    In February 2010, a peer-reviewed journal article demonstrated that seliciclib
reversed resistance to the aromatase inhibitor letrozole (Femara®) and inhibited
growth of hormone receptor positive breast cancer cells that had become insensitive
to the effects of letrozole; and
    
    In January 2010, a peer-reviewed journal article demonstrated that seliciclib
was effective against lung cancer cell lines and, in particular, those with
activating mutations in K-RAS and N-RAS proteins.
  6




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Our pipeline and expertise in cell cycle biology
   Commercial products
 ® ® ®
 General
     7




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Research and Development Pipeline
  Development
    
    
    
    Cell CycleProgram
    
    Indication
    
    Status
    
    Target
    
    MechanismOncologySapacitabine, CYC682
    
    Elderly AML
    
    Phase 3 trial on-going
    
    DNA polymerase
    
    G2 and S phaseSapacitabine, CYC682
    
    MDS
    
    Phase 2 randomized trial on-going
    
    DNA polymerase
    
    G2 and S phaseSapacitabine, CYC682
    
    CTCL
    
    Phase 2 randomized trial stopped. Not a company priority
    
    DNA polymerase
    
    G2 and S phaseSapacitabine, CYC682
    
    NSCLC
    
    Phase 2 trial on-going
    
    DNA polymerase
    
    G2 and S phaseSapacitabine + Seliciclib
    
    Cancer
    
    Phase 1 trial on-goingSeliciclib, CYC202
    
    NSCLC
    
    Phase 2b randomized trial closed to accrual
    
    CDK2, 7, 9
    
    G1/S checkpoint and othersSeliciclib, CYC202
    
    NPC
    
    Phase 2 randomized trial. Lead-in phase only on-going
    
    CDK2, 7, 9
    
    G1/S checkpoint and othersCYC116
    
    Cancer
    
    Phase 1 trial completed
    
    Aurora kinase & VEGFR2
    
    MitosisCDK Inhibitors, Second
Generation
    
    Cancer
    
    Preclinical
    
    CDK
    
    G1/S checkpoint and othersPlk1 Inhibitors
    
    Cancer
    
    Preclinical
    
    Plk
    
    G2/M checkpointHdm2 Inhibitors
    
    Cancer
    
    On hold. Not a company  priority
    
    Hdm2
    
    G1/2 phaseCyclin Binding Groove
Inhibitors
    
    Cancer
    
    On hold. Not a company priority
    
    Cyclin binding groove
    
    S phaseOther therapeutic areasCell Cycle Inhibitors
    
    Autoimmune & Inflammatory Diseases
    
    Phase 1 trial completed On hold. Not a company priority
    
    CDK
    
    G1/S checkpoint and  othersCell Cycle Inhibitors
    
    HIV/AIDS
    
    On hold. Not a company  priority
    
    CDK
    
    OtherGSK-3 Inhibitors
    
    Type 2 Diabetes
    
    On hold. Not a company priority
    
    GSK-3
    
    Other
 Market opportunity in oncology
    8




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Oncology Development Programs
     9




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Sapacitabine
 ®
  Hematological Cancers
 Phase 1 clinical trial in patients with advanced leukemias and myelodysplastic syndromes
  Phase 2 randomized clinical trial in elderly patients with AML previously untreated or in first
relapse
 st
  10




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Randomized Phase 2 clinical trial in older patients with MDS as a second-line treatment
     11




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Randomized Phase 3 pivotal trial, SEAMLESS, as a front-line treatment in elderly patients aged
70 years or older with newly diagnosed AML who are not candidates for intensive induction
chemotherapy
    Solid Tumors
 Phase 1 clinical trials in patients with refractory solid tumors or lymphomas
   12




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Phase 2 clinical trial in patients with non-small cell lung cancer
  Phase 2 clinical trial in patients with cutaneous T-cell lymphoma, or CTCL
  Orphan Designation
 European Union
  United States
   13




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Seliciclib
 ®
 Phase 1 clinical trials in patients with refractory solid tumors
   Phase 2 clinical trials in patients with NSCLC or breast cancer
 ®
   14




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Phase 2 clinical trials in patients with NPC
    15




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CYC116
  CYC065
    Other programs
   16




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Hdm2 Inhibitors
  Cyclin Binding Groove Inhibitors
  Non-oncology Programs
 Cell Cycle Inhibitors in Autoimmune & Inflammatory Diseases
  CDK Inhibitors in Virology
  GSK-3 Inhibitors in Type 2 Diabetes
   17




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Commercial Products
 ® ® ®
 Xclair® Cream
 ®
 Numoisyn® Liquid
 ® ® ® ®
 Numoisyn® Lozenges
 ® ® ® ®
 Business Strategy
   18




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Focus on the cell cycle and cancer
  
    
    The novel, mechanism-targeted cell cycle drugs we are developing are designed to be
highly selective in comparison to conventional chemotherapies, potentially inducing
death in cancer cells while sparing most normal cells which may give rise to fewer
side-effects.
    
    We believe that our sapacitabine is the only orally-available nucleoside analogue
presently being tested in the Phase 3 trial in AML and Phase 2 trial in MDS and
seliciclib is the most advanced orally-available CDK inhibitor currently in Phase 2
trials. We believe that we are well positioned to realize some of the market potential
of such drugs.
 Develop anticancer drug candidates in all phases of the cell cycle and multiple compounds for
particular cell cycle targets
  Enter into partnering arrangements selectively, while developing our own sales and marketing
capability
  Patents, Proprietary Technology and Collaborations
  
    
    Ownership and enforcement of patent rights;
    
    Patent applications covering our own inventions in fields that we consider
important to our business strategy;
    
    License agreements with third parties granting us rights to patents in fields that
are important to our business strategy;
    
    Invention assignment agreements with our employees and consultants;
    
    Non-compete agreements with our key employees and consultants;
    
    Confidentiality agreements with our employees, consultants, and others having
access to our proprietary information;
    
    Standard policies for the maintenance of laboratory notebooks to establish priority
of our inventions;
    
    Freedom to use studies from patent counsel;
    
    Material transfer agreements; and
    
    Trademark protection.
   19




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20




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Licenses
  Sapacitabine
    21




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Seliciclib
     22




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Sinclair Pharma plc
 ® ® ®
 Manufacturing
  ® ® ®
 Sales and Marketing
  Government Regulation
   23




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
    
    completion of extensive preclinical laboratory tests, preclinical animal studies
and formulation studies, all performed in accordance with the FDAs good laboratory
practice, or GLP, regulations;
    
    submission to the FDA of an IND application which must become effective before
clinical trials may begin;
    
    performance of adequate and well-controlled clinical trials to establish the safety
and efficacy of the drug candidate for each proposed indication;
    
    submission of a NDA to the FDA;
    
    satisfactory completion of an FDA pre-approval inspection of the manufacturing
facilities at which the product is produced to assess compliance with current good
manufacturing practice GMP, or cGMP, regulations;
    
    FDA review and approval of the NDA prior to any commercial marketing, sale or
shipment of the drug; and
    
    regulation of commercial marketing and sale of drugs.
  Clinical Trials.
  
    
    Phase 1:The clinical trials are initially conducted in a limited population to
test the drug candidate for safety, dose tolerance, absorption, metabolism,
distribution and excretion in healthy humans or, on occasion, in patients, such as
cancer patients. Phase 1 clinical trials can be designed to evaluate the impact of the
drug candidate in combination with currently approved drugs.
    
    Phase 2:These clinical trials are generally conducted in a limited patient
population to identify possible adverse effects and safety risks, to determine the
efficacy of the drug candidate for specific targeted indications and to determine dose
tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information
prior to beginning larger and more expensive Phase 3 clinical trial.
    
    Phase 3:These clinical trials are commonly referred to as pivotal clinical trials.
If the Phase 2 clinical trials demonstrate that a dose range of the drug candidate is
effective and has an acceptable safety profile, Phase 3 clinical trials are then
undertaken in large patient populations to further evaluate dosage, to provide
substantial evidence of clinical efficacy and to further test for safety in an
expanded and diverse patient population at multiple, geographically dispersed clinical
trial sites.
  24




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New Drug Application
  Fast Track Designation
    25




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
    
    Priority Review.Under FDA policies, a drug candidate is eligible for priority
review, or review within a six-month time frame from the time a complete NDA is
accepted for filing, if the drug candidate provides a significant improvement compared
to marketed drugs in the treatment, diagnosis or prevention of a disease. We cannot
suggest or in any way guarantee that any of our drug candidates will receive a
priority review designation, or if a priority designation is received, that review or
approval will be faster than conventional FDA procedures, or that the FDA will
ultimately grant drug approval.
    
    Accelerated Approval.Under the FDAs accelerated approval regulations, the FDA is
authorized to approve drug candidates that have been studied for their safety and
effectiveness in treating serious or life-threatening illnesses, and that provide
meaningful therapeutic benefit to patients over existing treatments based upon either
a surrogate endpoint that is reasonably likely to predict clinical benefit or on the
basis of an effect on a clinical endpoint other than patient survival. In clinical
trials, surrogate endpoints are alternative measurements of the symptoms of a disease
or condition that are substituted for measurements of observable clinical symptoms. A
drug candidate approved on this basis is subject to rigorous post-marketing compliance
requirements, including the completion of Phase 4 or post-approval clinical trials to
validate the surrogate endpoint or confirm the effect on the clinical endpoint.
Failure to conduct required post-approval studies, or to validate a surrogate endpoint
or confirm a clinical benefit during post-marketing studies, will allow the FDA to
withdraw the drug from the market on an expedited basis. All promotional materials for
drug candidates approved under accelerated regulations are subject to prior review by
the FDA. In rare instances the FDA may grant accelerated approval of an NDA based on
Phase 2 data and require confirmatory Phase 3 studies to be conducted after approval
and/or as a condition of maintaining approval. We can give no assurance that any of
our drugs will be reviewed under such procedures.
   510(k)
   26




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Other regulatory requirements
   Competition
   27




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Employees
  Available information
 http://www.sec.gov
  28




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Item 1A.
    
    Risk Factors
 In analyzing our company, you should consider carefully the following risk factors, together
with all of the other information included in this annual report on Form 10-K . Factors that could
cause or contribute to differences in our actual results include those discussed in the following
subsection, as well as those discussed in Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere throughout this annual report on Form 10-K . Each
of the following risk factors, either alone or taken together, could adversely affect our business,
operating results and financial condition, as well as adversely affect the value of an investment
in our company.
 Risks Associated with Development and Commercialization of Our Drug Candidates
 Clinical trial designs that were discussed with the authorities prior to their commencement may
subsequently be considered insufficient for approval at the time of application for regulatory
approval. Thus, our SPA regarding our SEAMLESS trial does not guarantee marketing approval or
approval of our sapacitabine oral capsules for the treatment of acute myeloid leukemia.
   The development program for our lead drug candidate sapacitabine is based, in part, on intellectual
property rights we license from others and any termination of this license could seriously harm our
business.
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If we fail to enter into and maintain successful strategic alliances for our drug candidates, we
may have to reduce or delay our drug candidate development or increase our expenditures.
   Clinical trials are expensive, time consuming, subject to delay and may be required to continue
beyond our available funding.
  
    
    delays in securing clinical investigators or trial sites for our clinical
trials;
 
    
    delays in obtaining institutional review board, or IRB, and other regulatory
approvals to commence a clinical trial;
 
    
    slower than anticipated rates of patient recruitment and enrollment, or
reaching the targeted number of patients because of competition for patients from
other trials or other reasons;
 
    
    negative or inconclusive results from clinical trials;
 
    
    unforeseen safety issues;
 
    
    uncertain dosing issues may or may not be related to suboptimal pharmacokinetic
and pharmacodynamic behaviors;
 
    
    approval and introduction of new therapies or changes in standards of practice
or regulatory guidance that render our clinical trial endpoints or the targeting
of our proposed indications obsolete;
  30




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
    
    inability to monitor patients adequately during or after treatment or problems
with investigator or patient compliance with the trial protocols;
 
    
    inability to replicate in large controlled studies safety and efficacy data
obtained from a limited number of patients in uncontrolled trials;
 
    
    inability or unwillingness of medical investigators to follow our clinical
protocols; and
 
    
    unavailability of clinical trial supplies.
 If we suffer any significant delays, setbacks or negative results in, or termination of, our
clinical trials, we may be unable to continue development of our drug candidates or generate
revenue and our development costs could increase significantly.Adverse events have been observed
in our clinical trials and may force us to stop development of our product candidates or prevent
regulatory approval of our product candidates.
   If our understanding of the role played by CDKs or AKs in regulating the cell cycle is incorrect,
this may hinder pursuit of our clinical and regulatory strategy.
  We are making use of biomarkers, which are not scientifically validated, and our reliance on
biomarker data may thus lead us to direct our resources inefficiently.
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Due to our reliance on contract research organizations or other third parties to conduct clinical
trials, we may be unable to directly control the timing, conduct and expense of our clinical
trials.
  To the extent we are able to enter into collaborative arrangements or strategic alliances, we will
be exposed to risks related to those collaborations and alliances.
   
    
    we may not be able to control the amount and timing of resources that our
collaborators may devote to the drug candidates;
 
    
    our collaborators may experience financial difficulties;
 
    
    we may be required to relinquish important rights such as marketing and
distribution rights;
 
    
    business combinations or significant changes in a collaborators business
strategy may also adversely affect a collaborators willingness or ability to
complete our obligations under any arrangement;
  32




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##### Table of Contents




    
    a collaborator could independently move forward with a competing drug candidate
developed either independently or in collaboration with others, including our
competitors; and
 
    
    collaborative arrangements are often terminated or allowed to expire, which
would delay the development and may increase the cost of developing our drug
candidates.
 We have no manufacturing capacity and will rely on third party manufacturers for the late stage
development and commercialization of any drugs or devices we may develop or sell.
   As we evolve from a company primarily involved in discovery and development to one also involved in
the commercialization of drugs and devices, we may encounter difficulties in managing our growth
and expanding our operations successfully.
  The failure to attract and retain skilled personnel and key relationships could impair our drug
development and commercialization efforts.
   33




---



##### Table of Contents



Our drug candidates are subject to extensive regulation, which can be costly and time-consuming,
and we may not obtain approvals for the commercialization of any of our drug candidates.
    
    
    those discussed in the risk factor which immediately follows;
 
    
    the fact that the FDA or other regulatory officials may not approve our or our
third party manufacturers processes or facilities; or
 
    
    the fact that new regulations may be enacted by the FDA or other regulators may
change their approval policies or adoption of new regulations requiring new or
different evidence of safety and efficacy for the intended use of a drug
candidate.
  34




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##### Table of Contents



With regard to the ALIGN products, and following regulatory approval of any of our drug candidates,
we are subject to ongoing regulatory obligations and restrictions, which may result in significant
expense and limit our ability to commercialize our potential products.
   Our applications for regulatory approval could be delayed or denied due to problems with studies
conducted before we in-licensed the rights to some of our product candidates.
  We face intense competition and our competitors may develop drugs that are less expensive, safer,
or more effective than our drug candidates.
   35




---



##### Table of Contents




    
    developing drug candidates;
 
    
    conducting preclinical and clinical trials;
 
    
    obtaining regulatory approvals; and
 
    
    commercializing product candidates.
  The commercial success of the ALIGN products and our drug candidates depends upon their market
acceptance among physicians, patients, healthcare providers and payors and the medical community.
 ® ® ®
 
    
    timing of market introduction, number and clinical profile of competitive
drugs;
 
    
    our ability to provide acceptable evidence of safety and efficacy;
 
    
    relative convenience and ease of administration;
 
    
    cost-effectiveness;
 
    
    availability of coverage, reimbursement and adequate payment from health
maintenance organizations and other third party payors;
 
    
    prevalence and severity of adverse side effects; and
 
    
    other potential advantages over alternative treatment methods.
   36




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##### Table of Contents



If we are unable to compete successfully in our market place, it will harm our business.
  There is uncertainty related to coverage, reimbursement and payment by healthcare providers and
payors for the ALIGN products and newly approved drugs, if any. The inability or failure to obtain
or maintain coverage could affect our ability to market the ALIGN products and our future drugs and
decrease our ability to generate revenue.
   Intellectual property rights and distribution rights for our drug candidate seliciclib and ALIGN
products are licensed from others, and any termination of these licenses could harm our business.
    37




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##### Table of Contents



We may be exposed to product liability claims that may damage our reputation and we may not be able
to obtain adequate insurance.
   We may be required to defend lawsuits or pay damages in connection with the alleged or actual
violation of healthcare statutes such as fraud and abuse laws, and our corporate compliance
programs can never guarantee that we are in compliance with all relevant laws and regulations.
    38




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##### Table of Contents



If our supplier upon whom we rely fails to produce on a timely basis the finished goods in the
volumes that we require or fails to meet quality standards and maintain necessary licensure from
regulatory authorities, we may be unable to meet demand for our products, potentially resulting in
lost revenues.
   Our customer base is highly concentrated.
 ® ® ® ® ® ®
  39




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##### Table of Contents



We may be unable to accurately estimate demand and monitor wholesaler inventory of Xclair® Cream,
Numoisyn® Liquid or Numoisyn® Lozenges. Although we attempt to monitor wholesaler inventory of
Xclair® Cream, Numoisyn® Liquid or Numoisyn® Lozenges, we also rely on third party information,
which is inherently uncertain and may not be accurate, to assist us in monitoring estimated
inventory levels and prescription trends. Inaccurate estimates of the demand and inventory levels
of the product
may cause our revenues to fluctuate significantly from quarter to quarter and may cause our
operating results for a particular quarter to be below expectations.
 ® ® ® ® ® ®
 The commercialization of our products is substantially dependent on our ability to develop
effective sales and marketing capabilities.
 ® ® ® ® ® ®
  Defending against claims relating to improper handling, storage or disposal of hazardous chemical,
radioactive or biological materials could be time consuming and expensive.
  Risks Related to Our Business and Financial Condition
 The current economic conditions and financial market turmoil could adversely affect our business
and results of operations.
   40




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We are at an early stage of development as a company and we do not have, and may never have, any
products that generate significant revenues.
  We have a history of operating losses and we may never become profitable. Our stock is a highly
speculative investment.
 ® ® ®
 Capital markets are currently experiencing a period of disruption and instability, which has had
and could continue to have a negative impact on the availability and cost of capital.
   41




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##### Table of Contents



If we fail to comply with the continued listing requirements of the NASDAQ Global Market our common
stock price may be delisted and the price of our common stock and our ability to access the capital
markets could be negatively impacted.
  Raising additional capital in the future may not be available to us on reasonable terms, if at all,
when or as we require additional funding. If we issue additional shares of our common stock or
other securities that may be convertible into, or exercisable or exchangeable for, our common
stock, our existing stockholders would experience further dilution. If we fail to obtain additional
funding, we may be unable to complete the development and commercialization of our lead drug
candidate, sapacitabine, or continue to fund our research and development programs.
   42




---



##### Table of Contents



To the extent we elect to fund the development of a drug candidate or the commercialization of a
drug at our expense, we will need substantial additional funding.
  
    
    fund research and development and clinical trials connected with our research;
 
    
    fund clinical trials and seek regulatory approvals;
 
    
    build or access manufacturing and commercialization capabilities;
 
    
    implement additional internal control systems and infrastructure;
 
    
    commercialize and secure coverage, payment and reimbursement of our drug
candidates, if any such candidates receive regulatory approval;
 
    
    maintain, defend and expand the scope of our intellectual property; and
 
    
    hire additional management, sales and scientific personnel.
  
    
    the scope, rate of progress and cost of our clinical trials and other research and
development activities;
 
    
    the costs and timing of seeking and obtaining regulatory approvals;
 
    
    the costs of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights;
 
    
    the costs associated with establishing sales and marketing capabilities;
 
    
    the costs of acquiring or investing in businesses, products and technologies;
 
    
    the effect of competing technological and market developments; and
 
    
    the payment, other terms and timing of any strategic alliance, licensing or other
arrangements that we may establish.
  Any future workforce and expense reductions may have an adverse impact on our internal programs,
strategic plans, and our ability to hire and retain key personnel, and may also be distracting to
our management.
   43




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##### Table of Contents



Budget constraints resulting from our restructuring plan may negatively impact our research and
development, forcing us to delay our efforts to develop certain product candidates in favor of
developing others, which may prevent us from commercializing our product candidates as quickly as
possible.
  We are exposed to risks related to foreign currency exchange rates.
  Risks Related to our Intellectual Property
 We may be subject to damages resulting from claims that our employees or we have wrongfully used or
disclosed alleged trade secrets of their former employers.
  If we fail to enforce adequately or defend our intellectual property rights our business may be
harmed.
    44




---



##### Table of Contents



Intellectual property rights of third parties may increase our costs or delay or prevent us from
being able to commercialize our drug candidates and/or the ALIGN products.
   45




---



##### Table of Contents




    
    be prohibited from selling or licensing any product that we may develop unless
the patent holder licenses the patent to us, which it is not required to do;
 
    
    be required to pay substantial royalties or grant a cross license to our
patents to another patent holder;
 
    
    decide to move some of our screening work outside Europe;
 
    
    be required to pay substantial damages for past infringement, which we may have
to pay if a court determines that our product candidates or technologies infringe
a competitors patent or other proprietary rights; or
 
    
    be required to redesign the formulation of a drug candidate so it does not
infringe, which may not be possible or could require substantial funds and time.
 Risks Related to Securities Regulations and Investment in Our Securities
 Failure to achieve and maintain internal controls is accordance with Sections 302 and 404 of the
Sarbanes-Oxley Act of 2002 could have a material adverse affect on our business and stock price.
   46




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##### Table of Contents



We incur increased costs and management resources as a result of being a public company, and we
still may fail to comply with public company obligations.
   Our common stock may have a volatile public trading price.
  
    
    disclosure of actual or potential clinical results with respect to product
candidates we are developing;
 
    
    regulatory developments in both the United States and abroad;
  47




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##### Table of Contents




    
    developments concerning proprietary rights, including patents and litigation
matters;
 
    
    public concern about the safety or efficacy of our product candidates or
technology, or related technology, or new technologies generally;
 
    
    concern about the safety or efficacy of our product candidates or technology,
or related technology, or new technologies generally;
 
    
    public announcements by our competitors or others; and
 
    
    general market conditions and comments by securities analysts and investors.
 Fluctuations in our operating losses could adversely affect the price of our common stock.
  If securities or industry analysts do not publish research or reports about us, if they change
their recommendations regarding our stock adversely or if our operating results do not meet their
expectations, our stock price and trading volume could decline.
  Anti-takeover provisions in our charter documents and provisions of Delaware law may make an
acquisition more difficult and could result in the entrenchment of management.
     48




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##### Table of Contents



We have the authority to issue up to 5 million shares of preferred stock and to determine the terms
of those shares of stock without any further action by our stockholders. If the Board of Directors
exercises this power to issue preferred stock, it could be more difficult for a third party to
acquire a majority of our outstanding voting stock and vote the stock they acquire to remove
management or directors.
   Certain severance-related agreements in our executive employment agreements may make an acquisition
more difficult and could result in the entrenchment of management.
  In the event of an acquisition of our common stock, we cannot assure our common stockholders that
we will be able to negotiate terms that would provide for a price equivalent to, or more favorable
than, the price at which our shares of common stock may be trading at such time.
   49




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##### Table of Contents



Our certificate of incorporation and bylaws and certain provisions of Delaware law may delay or
prevent a change in our management and make it more difficult for a third party to acquire us.
  
    
    authorize the issuance of preferred stock that can be created and issued by the
Board of Directors without prior stockholder approval, commonly referred to as
blank check preferred stock, with rights senior to those of our common stock;
 
    
    provide for the Board of Directors to be divided into three classes; and
 
    
    require that stockholder actions must be effected at a duly called stockholder
meeting and prohibit stockholder action by written consent.
   We may have limited ability to pay cash dividends on our preferred stock, and there is no assurance
that future quarterly dividends will be declared.
     50




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##### Table of Contents



We have not declared quarterly dividends on our 6% preferred stock for a total of six quarterly
dividend periods. As a result, we will have to grant additional rights to our holders of preferred
stock with respect to the management of the Company.
  Our common and convertible preferred stock may experience extreme price and volume fluctuations,
which could lead to costly litigation for the Company and make an investment in the Company less
appealing.
  
    
    additions to or departures of our key personnel;
 
    
    announcements of technological innovations or new products or services by us or
our competitors;
 
    
    announcements concerning our competitors or the biotechnology industry in
general;
 
    
    new regulatory pronouncements and changes in regulatory guidelines;
 
    
    general and industry-specific economic conditions;
 
    
    changes in financial estimates or recommendations by securities analysts;
 
    
    variations in our quarterly results;
 
    
    announcements about our collaborators or licensors; and
 
    
    changes in accounting principles.
 Our
common stock may have a volatile public trading price.
  51




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##### Table of Contents



The future sale of our common and preferred stock and future issuances of our common stock upon
conversion of our preferred stock, could negatively affect our stock price and cause dilution to
existing holders of our common stock.
  If we exchange the convertible preferred stock for debentures, the exchange will be taxable but we
will not provide any cash to pay any tax liability that any convertible preferred stockholder may
incur.
  If we automatically convert the convertible preferred stock, there is a substantial risk of
fluctuation in the price of our common stock from the date we elect to automatically convert to the
conversion date.
  We do not intend to pay cash dividends on our common stock in the foreseeable future.
  The number of shares of common stock which are registered, including the shares to be issued upon
exercise of our outstanding warrants, is significant in relation to our currently outstanding
common stock and could cause downward pressure on the market price for our common stock.
   52




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##### Table of Contents



If persons engage in short sales of our common stock, including sales of shares to be issued upon
exercise of our outstanding warrants, the price of our common stock may decline.
  We are exposed to risk related to the marketable securities we may purchase.
  
 Item 1B.
    
    Unresolved Staff Comments
  
 Item 2.
    
    Properties
  
 Item 3.
    
    Legal Proceedings
 ® ®
 
 Item 4.
    
    (Removed and Reserved)
  53




---



##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 Market Information
  High
    
    
    Low2010Quarter ended March 31, 2010
    
    $
    4.08
    
    
    $
    1.00Quarter ended June 30, 2010
    
    $
    2.97
    
    
    $
    1.38Quarter ended September 30, 2010
    
    $
    1.98
    
    
    $
    1.40Quarter ended December 31, 2010
    
    $
    1.95
    
    
    $
    1.442009Quarter ended March 31, 2009
    
    $
    0.54
    
    
    $
    0.26Quarter ended June 30, 2009
    
    $
    1.66
    
    
    $
    0.30Quarter ended September 30, 2009
    
    $
    1.24
    
    
    $
    0.79Quarter ended December 31, 2009
    
    $
    1.69
    
    
    $
    0.75
  54




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##### Table of Contents



Holders of Common Stock
  Dividends
   55




---



##### Table of Contents



Item 6.    Selected Financial Data
    Period fromAugust 13,1996(inception) toYears Ended December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2010(in thousands, except per share data)Consolidated Statements of Operations:Revenues:Collaboration and research and
development revenue
    
    $
    231
    
    
    $
    10
    
    
    $
    
    
    
    $
    
    
    
    $
    100
    
    
    $
    3,100Product revenue
    
    
    
    
    
    
    
    
    
    
    838
    
    
    
    910
    
    
    
    574
    
    
    
    2,322Grant revenue
    
    
    156
    
    
    
    119
    
    
    
    39
    
    
    
    1
    
    
    
    12
    
    
    
    3,648Total revenues
    
    
    387
    
    
    
    129
    
    
    
    877
    
    
    
    911
    
    
    
    686
    
    
    
    9,070Operating expenses:Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    429
    
    
    
    545
    
    
    
    418
    
    
    
    1,392Research and development
    
    
    21,205
    
    
    
    19,569
    
    
    
    18,869
    
    
    
    9,766
    
    
    
    6,414
    
    
    
    176,593Selling, general and administrative
    
    
    12,598
    
    
    
    12,033
    
    
    
    15,354
    
    
    
    8,538
    
    
    
    10,120
    
    
    
    81,966Goodwill and intangibles impairment
    
    
    
    
    
    
    
    
    
    
    7,934
    
    
    
    
    
    
    
    
    
    
    
    7,934Other restructuring costs
    
    
    225
    
    
    
    1,554
    
    
    
    489
    
    
    
    366
    
    
    
    
    
    
    
    2,634Total operating expenses
    
    
    34,028
    
    
    
    33,156
    
    
    
    43,075
    
    
    
    19,215
    
    
    
    16,952
    
    
    
    270,519Operating loss
    
    
    (33,641
    )
    
    
    (33,027
    )
    
    
    (42,198
    )
    
    
    (18,304
    )
    
    
    (16,266
    )
    
    
    (261,449
    )Total other income (expense)
    
    
    2,138
    
    
    
    6,933
    
    
    
    63
    
    
    
    (2,214
    )
    
    
    (412
    )
    
    
    5,264Loss before taxes
    
    
    (31,503
    )
    
    
    (26,094
    )
    
    
    (42,135
    )
    
    
    (20,518
    )
    
    
    (16,678
    )
    
    
    (256,185
    )Income tax benefit
    
    
    2,245
    
    
    
    2,041
    
    
    
    1,749
    
    
    
    948
    
    
    
    657
    
    
    
    17,879Net loss
    
    
    (29,258
    )
    
    
    (24,053
    )
    
    
    (40,386
    )
    
    
    (19,570
    )
    
    
    (16,021
    )
    
    
    (238,306
    )Dividend on preferred ordinary shares
    
    
    (2,827
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,123
    )Deemed dividend on convertible
exchangeable preferred shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,515
    )
    
    
    (3,515
    )Dividend on convertible exchangeable
preferred shares
    
    
    
    
    
    
    (307
    )
    
    
    (1,227
    )
    
    
    (1,228
    )
    
    
    (167
    )
    
    
    (2,929
    )Net loss applicable to common shareholders
    
    $
    (32,085
    )
    
    $
    (24,360
    )
    
    $
    (41,613
    )
    
    $
    (20,798
    )
    
    $
    (19,703
    )
    
    $
    (282,873
    )Net loss per share  basic and diluted
    
    $
    (2.40
    )
    
    $
    (1.23
    )
    
    $
    (2.04
    )
    
    $
    (0.94
    )
    
    $
    (0.52
    )Shares used in computing basic and
diluted net loss per share
    
    
    13,390,933
    
    
    
    19,873,911
    
    
    
    20,433,129
    
    
    
    22,196,840
    
    
    
    37,844,695
  56




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##### Table of Contents



As of December 31,20092006
    
    
    2007
    
    
    2008
    
    
    (as restated)
    
    
    2010(in thousands)Consolidated Balance Sheet
Data:Cash and cash equivalents
    
    $
    44,238
    
    
    $
    30,987
    
    
    $
    24,220
    
    
    $
    11,493
    
    
    $
    29,495Short-term investments
    
    
    9,764
    
    
    
    27,766
    
    
    
    1,502
    
    
    
    
    
    
    
    Working capital
    
    
    50,244
    
    
    
    49,065
    
    
    
    20,387
    
    
    
    4,775
    
    
    
    24,516Total assets
    
    
    63,276
    
    
    
    75,912
    
    
    
    30,957
    
    
    
    14,466
    
    
    
    31,459Long-term liabilities, net of
current portion
    
    
    (1,436
    )
    
    
    (3,231
    )
    
    
    (1,688
    )
    
    
    
    
    
    
    Total stockholders equity
    
    
    53,919
    
    
    
    57,969
    
    
    
    20,642
    
    
    
    5,872
    
    
    
    24,924
   57




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##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Cautionary Statement Regarding Forward-Looking Statements
 This report contains certain statements that may be deemed forward-looking statements
within the meaning of United States securities laws. All statements, other than statements of
historical fact, that address activities, events or developments that we intend, expect, project,
believe or anticipate will or may occur in the future are forward-looking statements. Such
statements are based upon certain assumptions and assessments made by our management in light of
their experience and their perception of historical trends, current conditions, expected future
developments and other factors they believe to be appropriate. Certain factors that could cause
results to differ materially from those projected or implied in the forward looking statements are
set forth in this Annual Report on Form 10-K for the year ended December 31, 2010 under the caption
Item 1A  Risk factors.
 We encourage you to read those descriptions carefully. We caution you not to place undue
reliance on the forward-looking statements contained in this report. These statements, like all
statements in this report, speak only as of the date of this report (unless an earlier date is
indicated) and we undertake no obligation to update or revise the statements except as required by
law. Such forward-looking statements are not guarantees of future performance and actual results
will likely differ, perhaps materially, from those suggested by such forward-looking statements.
 Overview of Restatement
  (a)
    
    consolidated balance sheets as of March 31, 2009, June 30, 2009, September 30, 2009,
December 31, 2009, March 31, 2010, June 30, 2010, and September 30, 2010 and its statement
of stockholders equity for the year ended December 31, 2009; and
 (b)
    
    Selected Financial Data as of and for the year ended December 31, 2009.
  (a)
    
    restate our consolidated balance sheet as of December 31, 2009 and statement of
stockholders equity for the year ended December 31, 2009;
 (b)
    
    amend our Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) as it relates to the year ended December 31, 2009 and each of the
first, second and third quarters of fiscal 2010;
 (c)
    
    restate our Selected Financial Data as of and for the year ended December 31, 2009; and
 (d)
    
    restate our unaudited consolidated balance sheets as of March 31, 2009, June 30, 2009,
September 30, 2009, March 31, 2010, June 30, 2010, and September 30, 2010.
 Background on the Restatement
  Accounting for Preferred Stock Dividends
   58




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##### Table of Contents



Overview
  
    
    Acute myeloid leukemia, or AML, in the elderly;
 
    
    Myelodysplastic syndromes, or MDS; and
 
    
    Non-small cell lung cancer, or NSCLC.
 ® ® ®
   59




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##### Table of Contents



Recent Events
    60




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##### Table of Contents



Results of Operations
 Years ended December 31, 2009 and 2010 compared to years ended December 31, 2008 and 2009,
respectively.
 Revenues
  Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Collaboration
and research and
development revenue
    
    $
    
    
    
    $
    
    
    
    $
    100
    
    
    $
    
    
    
    $
    100
    
    
    
    
    %
    
    
    100
    %Product Revenue
    
    
    838
    
    
    
    910
    
    
    
    574
    
    
    
    72
    
    
    
    (336
    )
    
    
    9
    %
    
    
    (37
    )%Grant revenue
    
    
    39
    
    
    
    1
    
    
    
    12
    
    
    
    (38
    )
    
    
    11
    
    
    
    (97
    )%
    
    
    1,100
    %Total revenue
    
    $
    877
    
    
    $
    911
    
    
    $
    686
    
    
    $
    34
    
    
    $
    (225
    )
    
    
    4
    %
    
    
    (25
    )%
  ® ® ®
  The future
  Cost of goods sold
 Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Cost of goods sold
    
    $
    429
    
    
    $
    545
    
    
    $
    418
    
    
    $
    116
    
    
    $
    (127
    )
    
    
    27
    %
    
    
    (23
    )%
  61




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##### Table of Contents



Research and development expenses
  
    
    clinical trial and regulatory-related costs;
 
    
    payroll and personnel-related expenses, including consultants and contract
research;
 
    
    preclinical studies and laboratory supplies and materials;
 
    
    technology license costs; and
 
    
    rent and facility expenses for our laboratories.
  Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Sapacitabine
    
    $
    6,601
    
    
    $
    7,001
    
    
    $
    5,222
    
    
    $
    400
    
    
    $
    (1,779
    )
    
    
    6
    %
    
    
    (25
    )%Seliciclib
    
    
    2,906
    
    
    
    (84
    )
    
    
    53
    
    
    
    (2,990
    )
    
    
    137
    
    
    
    (103)
    %
    
    
    163
    %CYC116
    
    
    1,695
    
    
    
    162
    
    
    
    25
    
    
    
    (1,533
    )
    
    
    (137
    )
    
    
    (90
    )%
    
    
    (85
    )%Other costs related
to research and
development
programs,
management and
exploratory
research
    
    
    7,667
    
    
    
    2,687
    
    
    
    1,114
    
    
    
    (4,980
    )
    
    
    (1,573
    )
    
    
    (65
    )%
    
    
    (59
    )%Total research
and development
expenses
    
    $
    18,869
    
    
    $
    9,766
    
    
    $
    6,414
    
    
    $
    (9,103
    )
    
    $
    (3,352
    )
    
    
    (48
    )%
    
    
    (34
    )%
  Fiscal 2010 as compared to fiscal 2009.
  62




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##### Table of Contents



Fiscal 2009 as compared to fiscal 2008.
 The future
  Selling, general and administrative expenses
  Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Total
selling, general
and administrative
expenses
    
    $
    15,354
    
    
    $
    8,538
    
    
    $
    10,120
    
    
    $
    (6,816
    )
    
    $
    1,582
    
    
    
    (44
    )%
    
    
    19
    %
  Fiscal 2010 as compared to fiscal 2009.
 Fiscal 2009 as compared to fiscal 2008.
 The future
   63




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##### Table of Contents



Goodwill and intangible asset impairment
  Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Goodwill and
intangibles
impairment
    
    $
    7,934
    
    
    $
    
    
    
    $
    
    
    
    $
    (7,934
    )
    
    $
    
    
    
    
    (100
    )%
    
    
    
    The future
  Restructuring charge
  Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Total restructuring charge
    
    $
    489
    
    
    $
    366
    
    
    $
    
    
    
    $
    (123
    )
    
    $
    
    
    
    
    (25
    )%
    
    
    
    %
  64




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##### Table of Contents



Fiscal 2010 as compared to fiscal 2009
 Fiscal 2009 as compared to fiscal 2008
  The future
    65




---



##### Table of Contents



Other income / (expense)
  Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Payment under guarantee
    
    $
    
    
    
    $
    (1,652
    )
    
    $
    
    
    
    $
    (1,652
    )
    
    $
    1,652
    
    
    
    (100
    )%
    
    
    100
    %Change in valuation of
warrants liability
    
    
    3,502
    
    
    
    (299
    )
    
    
    (338
    )
    
    
    (3,801
    )
    
    
    (39
    )
    
    
    (109
    )%
    
    
    (13
    )%Amendment to CEFF warrants
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    (44
    )
    
    
    44
    
    
    
    (100
    )%
    
    
    100
    %Foreign Exchange gain/(loss)
    
    
    (4,501
    )
    
    
    (144
    )
    
    
    (68
    )
    
    
    4,357
    
    
    
    76
    
    
    
    97
    %
    
    
    53
    %Interest income
    
    
    1,380
    
    
    
    102
    
    
    
    37
    
    
    
    (1,278
    )
    
    
    (65
    )
    
    
    (93
    )%
    
    
    (64
    )%Interest expense
    
    
    (318
    )
    
    
    (177
    )
    
    
    (43
    )
    
    
    141
    
    
    
    134
    
    
    
    44
    %
    
    
    76
    %Total other income
(expense), net
    
    $
    63
    
    
    $
    (2,214
    )
    
    $
    (412
    )
    
    $
    (2,277
    )
    
    $
    1,802
    
    
    
    (3,614
    )%
    
    
    81
    %
 Fiscal 2010 as compared to fiscal 2009.
 Change in valuation of warrants liability
  Foreign Exchange gain / (loss)
    66




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##### Table of Contents



Interest Income
  Interest Expense
  Fiscal 2009 as compared to fiscal 2008.
 Change in valuation of warrants liability
  Foreign Exchange gain / (loss)
   Interest Income
  Interest Expense
   67




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##### Table of Contents



The future
   Income tax benefit
   Years ended
    
    
    $ Differences
    
    
    % Differences2008 to
    
    
    2009 to
    
    
    2008 to
    
    
    2009 to2008
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)Total income
tax benefit
    
    $
    1,749
    
    
    $
    948
    
    
    $
    657
    
    
    $
    (801
    )
    
    $
    (291
    )
    
    
    (46
    )%
    
    
    (31
    )%
 Fiscal 2010 as compared to fiscal 2009.
 Fiscal 2009 as compared to fiscal 2008.
 The future
   68




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##### Table of Contents



Liquidity and Capital Resources
  December 31,2009
    
    
    December 31,(as restated)
    
    
    2010
    
    
    $ Difference
    
    
    % Difference(in thousands)Cash and cash equivalents
    
    $
    11,493
    
    
    $
    29,495
    
    
    $
    18,002
    
    
    
    157
    %Working capital:Current assets
    
    $
    13,369
    
    
    $
    31,051
    
    
    $
    17,682
    
    
    
    132
    %Current liabilities
    
    
    (8,594
    )
    
    
    (6,535
    )
    
    
    2,059
    
    
    
    (24
    )%Total working capital
    
    $
    4,775
    
    
    $
    24,516
    
    
    $
    19,741
    
    
    
    413
    %
  
    
    The completion of a private placement during October 2010, which resulted in
approximately $14.0 million in net proceeds;
 
    
    Two registered direct offerings in January 2010 for net proceeds of
approximately $11.9 million; and
 
    
    The issuance of 2.8 million common shares for approximately $4.9 million as
part of the committed equity financing facility, or CEFF, with Kingsbridge Capital Limited,
or Kingsbridge and the exercise of options and warrants totaling $2.6 million during
2010.
     69




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##### Table of Contents



Cash provided by (used in) operating, investing and financing
activities
  Year ended December 31,2008
    
    
    2009
    
    
    2010(in thousands)Net cash used in operating activities
    
    $
    (29,905
    )
    
    $
    (14,886
    )
    
    $
    (16,044
    )Net cash provided by investing activities
    
    $
    27,342
    
    
    $
    1,559
    
    
    $
    33Net cash provided by (used in) financing activities
    
    $
    (1,238
    )
    
    $
    3,545
    
    
    $
    33,396
 Operating activities
   Investing activities
   Financing activities
     70




---



##### Table of Contents



Operating Capital and Capital Expenditure Requirements
    
    
    the rate of progress and cost of our clinical trials, preclinical studies and
other discovery and research and development activities;
 
    
    the costs associated with establishing manufacturing and commercialization
capabilities;
 
    
    the costs of acquiring or investing in businesses, product candidates and
technologies;
 
    
    the costs of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights;
 
    
    the costs and timing of seeking and obtaining FDA and other regulatory
approvals;
 
    
    the effect of competing technological and market developments; and
 
    
    the economic and other terms and timing of any collaboration, licensing or
other arrangements into which we may enter.
  Off-Balance Sheet Arrangements
   71




---



##### Table of Contents



Critical Accounting Policies
  Revenue Recognition
 Product sales
 ® ® ®
  Collaboration, research and development, and grant revenue
     72




---



##### Table of Contents



Stock-based Compensation
    Warrants Liability
 February 2007 Financing
   73




---



##### Table of Contents



Recent Accounting Pronouncements
 Revenue
Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition, a consensus of
the FASB Emerging Issues Task Force
    74




---



##### Table of Contents



Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Foreign Currency Risk
     Common Stock Price Risk
   75




---



##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data
 INDEX TO CYCLACEL PHARMACEUTICALS, INC. FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    77Consolidated Balance Sheets as of December 31, 2009 and 2010
    
    
    78Consolidated Statements of Operations for the years ended December
31, 2008, 2009 and 2010 and the period from August 13, 1996
(inception) to December 31, 2010
    
    
    79Consolidated Statements of Stockholders Equity (Deficit) for the
period from August 13, 1996 (inception) to December 31, 2010
    
    
    80Consolidated Statements of Cash Flows for the years ended December
31, 2008, 2009 and 2010 and the period from August 13, 1996
(inception) to December 31, 2010
    
    
    88Notes to Consolidated Financial Statements
    
    
    91
  76




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Ernst Young
    77




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 CONSOLIDATED BALANCE SHEETS
 (In $000s, except share amounts)
 December 31,2009(as
restated)
    
    
    2010ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,493
    
    
    $
    29,495Inventory
    
    
    145
    
    
    
    174Prepaid expenses and other current assets
    
    
    1,731
    
    
    
    1,382Total current assets
    
    
    13,369
    
    
    
    31,051Property, plant and equipment (net)
    
    
    901
    
    
    
    408Deposits and other assets
    
    
    196
    
    
    
    Total assets
    
    $
    14,466
    
    
    $
    31,459LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,709
    
    
    $
    1,723Accrued and other current liabilities
    
    
    5,481
    
    
    
    4,132Warrants liability
    
    
    342
    
    
    
    680Current portion of other accrued restructuring charges
    
    
    1,062
    
    
    
    Total current liabilities
    
    
    8,594
    
    
    
    6,535Total liabilities
    
    
    8,594
    
    
    
    6,535Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
authorized at December 31, 2009 and 2010,
respectively; 2,046,813 and 1,213,142 shares issued
and outstanding at December 31, 2009 and 2010,
respectively. Aggregate preference in liquidation of
$21,696,218 and $13,344,562 at December 31, 2009 and
December 31, 2010, respectively
    
    
    2
    
    
    
    1Common stock, $0.001 par value; 100,000,000 shares
authorized at December 31, 2009 and 2010,
respectively; 25,743,363 and 46,564,914 shares
issued and outstanding at December 31, 2009 and 2010,
respectively
    
    
    26
    
    
    
    47Additional paid-in capital
    
    
    228,109
    
    
    
    266,666Accumulated other comprehensive income
    
    
    20
    
    
    
    31Deficit accumulated during the development stage
    
    
    (222,285
    )
    
    
    (241,821
    )Total stockholders equity
    
    
    5,872
    
    
    
    24,924Total liabilities and stockholders equity
    
    $
    14,466
    
    
    $
    31,459
   78




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In $000s, except share and per share amounts)
 Period fromAugust 13,1996Year ended
    
    
    Year ended
    
    
    Year ended
    
    
    (inception) toDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010
    
    
    2010Revenues:Collaboration and research and development revenue
    
    $
    
    
    
    $
    
    
    
    $
    100
    
    
    $
    3,100Product Revenue
    
    
    838
    
    
    
    910
    
    
    
    574
    
    
    
    2,322Grant revenue
    
    
    39
    
    
    
    1
    
    
    
    12
    
    
    
    3,648Total revenues
    
    
    877
    
    
    
    911
    
    
    
    686
    
    
    
    9,070Operating expenses:Cost of goods sold
    
    
    429
    
    
    
    545
    
    
    
    418
    
    
    
    1,392Research and development
    
    
    18,869
    
    
    
    9,766
    
    
    
    6,414
    
    
    
    176,593Selling, general and administrative
    
    
    15,354
    
    
    
    8,538
    
    
    
    10,120
    
    
    
    81,966Goodwill and intangibles impairment
    
    
    7,934
    
    
    
    
    
    
    
    
    
    
    
    7,934Other restructuring costs
    
    
    489
    
    
    
    366
    
    
    
    
    
    
    
    2,634Total operating expenses
    
    
    43,075
    
    
    
    19,215
    
    
    
    16,952
    
    
    
    270,519Operating loss
    
    
    (42,198
    )
    
    
    (18,304
    )
    
    
    (16,266
    )
    
    
    (261,449
    )Other income (expense):Costs associated with aborted 2004 IPO
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,550
    )Payment under guarantee
    
    
    
    
    
    
    (1,652
    )
    
    
    
    
    
    
    (1,652
    )Change in valuation of derivative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (308
    )Change in valuation of warrants liability
    
    
    3,502
    
    
    
    (299
    )
    
    
    (338
    )
    
    
    6,070Warrant re-pricing
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    (44
    )Foreign exchange gains / (losses)
    
    
    (4,501
    )
    
    
    (144
    )
    
    
    (68
    )
    
    
    (4,255
    )Interest income
    
    
    1,380
    
    
    
    102
    
    
    
    37
    
    
    
    13,680Interest expense
    
    
    (318
    )
    
    
    (177
    )
    
    
    (43
    )
    
    
    (4,677
    )Total other income (expense), net
    
    
    63
    
    
    
    (2,214
    )
    
    
    (412
    )
    
    
    5,264Loss before taxes
    
    
    (42,135
    )
    
    
    (20,518
    )
    
    
    (16,678
    )
    
    
    (256,185
    )Income tax benefit
    
    
    1,749
    
    
    
    948
    
    
    
    657
    
    
    
    17,879Net loss
    
    
    (40,386
    )
    
    
    (19,570
    )
    
    
    (16,021
    )
    
    
    (238,306
    )Dividend on preferred ordinary shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,123
    )Deemed dividend on convertible exchangeable preferred shares
    
    
    
    
    
    
    
    
    
    
    (3,515
    )
    
    
    (3,515
    )Dividend on convertible exchangeable preferred shares
    
    
    (1,227
    )
    
    
    (1,228
    )
    
    
    (167
    )
    
    
    (2,929
    )Net loss applicable to common shareholders
    
    $
    (41,613
    )
    
    $
    (20,798
    )
    
    $
    (19,703
    )
    
    $
    (282,873
    )Net loss per share  basic and diluted
    
    $
    (2.04
    )
    
    $
    (0.94
    )
    
    $
    (0.52
    )Weighted average common shares outstanding
    
    
    20,433,129
    
    
    
    22,196,840
    
    
    
    37,844,695
   79




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 (In $000s, except share and per share amounts)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    Capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000On incorporation,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issue of shares for cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (4
    )Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (290
    )
    
    
    (290
    )Comprehensive loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (294
    )Balance at March 31, 1997
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (4
    )
    
    
    
    
    
    
    (290
    )
    
    
    (293
    )Issue of shares for cash, net of
issuance costs
    
    
    
    
    
    
    
    
    
    
    266,778
    
    
    
    
    
    
    
    4,217
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,217Issue of shares for IP rights
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,002
    
    
    
    
    
    
    
    (2,002
    )
    
    
    
    
    
    
    Amortization of deferred
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302
    
    
    
    
    
    
    
    302Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    55Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,534
    )
    
    
    (2,534
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,479
    )Balance at March 31, 1998
    
    
    
    
    
    
    
    
    
    
    266,778
    
    
    
    
    
    
    
    6,482
    
    
    
    51
    
    
    
    (1,700
    )
    
    
    (2,824
    )
    
    
    2,009Amortization of deferred
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    406
    
    
    
    
    
    
    
    406Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,964
    )
    
    
    (3,964
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,953
    )Balance at March 31, 1999
    
    
    
    
    
    
    
    
    
    
    266,778
    
    
    
    
    
    
    
    6,482
    
    
    
    62
    
    
    
    (1,294
    )
    
    
    (6,788
    )
    
    
    (1,538
    )
   80




---



##### Table of Contents



CYLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 (In $000s, except share and per share amounts)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Issue of shares for cash, net of issuance costs
    
    
    
    
    
    
    
    
    
    
    538,889
    
    
    
    1
    
    
    
    12,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,717Issue of shares on conversion of bridging loan
    
    
    
    
    
    
    
    
    
    
    90,602
    
    
    
    
    
    
    
    1,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,638Issue of shares in lieu of cash bonus
    
    
    
    
    
    
    
    
    
    
    9,060
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164Issue of shares for research & development agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    409
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    409Exercise of share options
    
    
    
    
    
    
    
    
    
    
    2,265
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    (167
    )
    
    
    
    
    
    
    Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    433
    
    
    
    
    
    
    
    433Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (194
    )
    
    
    
    
    
    
    
    
    
    
    (194
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,686
    )
    
    
    (5,686
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,880
    )Balance at March 31, 2000
    
    
    
    
    
    
    
    
    
    
    907,594
    
    
    
    1
    
    
    
    21,616
    
    
    
    (132
    )
    
    
    (1,028
    )
    
    
    (12,474
    )
    
    
    7,983Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    294
    
    
    
    
    
    
    
    (294
    )
    
    
    
    
    
    
    Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275
    
    
    
    
    
    
    
    275Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (466
    )
    
    
    
    
    
    
    
    
    
    
    (466
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,382
    )
    
    
    (10,382
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,848
    )Balance at March 31, 2001
    
    
    
    
    
    
    
    
    
    
    907,594
    
    
    
    1
    
    
    
    21,910
    
    
    
    (598
    )
    
    
    (1,047
    )
    
    
    (22,856
    )
    
    
    (2,590
    )
   81




---



##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 (In $000s, except share and per share amounts)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Issue of shares for cash, net of issuance costs
    
    
    
    
    
    
    
    
    
    
    5,451
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of share options for cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106Issue of shares for license agreement
    
    
    
    
    
    
    
    
    
    
    4,510
    
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183Fair value of warrants issued to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,215Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    363
    
    
    
    
    
    
    
    (363
    )
    
    
    
    
    
    
    Amortization of deferred stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    672
    
    
    
    
    
    
    
    672Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191
    
    
    
    
    
    
    
    
    
    
    
    191Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,853
    )
    
    
    (14,853
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,662
    )Balance at March 31, 2002
    
    
    
    
    
    
    
    
    
    
    917,555
    
    
    
    1
    
    
    
    23,777
    
    
    
    (407
    )
    
    
    (738
    )
    
    
    (37,709
    )
    
    
    (15,076
    )Exercise of share options for cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84
    )
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    Amortization of deferred stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    305
    
    
    
    
    
    
    
    305Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,846
    )
    
    
    
    
    
    
    
    
    
    
    (1,846
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,542
    )
    
    
    (15,542
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,388
    )Balance at March 31, 2003
    
    
    
    
    
    
    
    
    
    
    917,555
    
    
    
    1
    
    
    
    23,705
    
    
    
    (2,253
    )
    
    
    (349
    )
    
    
    (53,251
    )
    
    
    (32,147
    )
   82




---



##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 (In $000s, except share and per share amounts)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Issue of shares for cash, net of issuance costs
    
    
    
    
    
    
    
    
    
    
    1,510,288
    
    
    
    1
    
    
    
    27,634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,635Exercise of share options for cash
    
    
    
    
    
    
    
    
    
    
    6,549
    
    
    
    
    
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Conversion of Preferred C Ordinary shares
    
    
    
    
    
    
    
    
    
    
    3,769,139
    
    
    
    4
    
    
    
    58,144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,148Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    217Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,343
    )
    
    
    
    
    
    
    
    
    
    
    (1,343
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,977
    )
    
    
    (14,977
    )Comprehensive loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,320
    )Balance at December 31, 2003
    
    
    
    
    
    
    
    
    
    
    6,203,531
    
    
    
    6
    
    
    
    109,598
    
    
    
    (3,596
    )
    
    
    (132
    )
    
    
    (68,228
    )
    
    
    37,648Issues of shares for cash, net of issuance costs
    
    
    
    
    
    
    
    
    
    
    430,571
    
    
    
    1
    
    
    
    8,540
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,541Exercise of warrants for cash
    
    
    
    
    
    
    
    
    
    
    22,630
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,050
    )
    
    
    
    
    
    
    132
    
    
    
    
    
    
    
    (1,918
    )Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,424
    
    
    
    
    
    
    
    
    
    
    
    2,424Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,742
    )
    
    
    (22,742
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,318
    )Balance at December 31, 2004
    
    
    
    
    
    
    
    
    
    
    6,656,732
    
    
    
    7
    
    
    
    116,088
    
    
    
    (1,172
    )
    
    
    
    
    
    
    (90,970
    )
    
    
    23,953Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,786
    )
    
    
    
    
    
    
    
    
    
    
    (1,786
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,048
    )
    
    
    (18,048
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,834
    )Balance at December 31, 2005
    
    
    
    
    
    
    
    
    
    
    6,656,732
    
    
    
    7
    
    
    
    116,088
    
    
    
    (2,958
    )
    
    
    
    
    
    
    (109,018
    )
    
    
    4,119
   83




---



##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Issue of shares to
certain directors and officers
    
    
    
    
    
    
    
    
    
    
    648,413
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issue of shares on conversion
of Loan Note Instrument
    
    
    
    
    
    
    
    
    
    
    456,308
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reverse Acquisition
    
    
    2,046,813
    
    
    
    2
    
    
    
    1,967,928
    
    
    
    2
    
    
    
    16,251
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,255Loan from Cyclacel Group plc
waived
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,420
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,420Issue of common stock and
warrants for cash
    
    
    
    
    
    
    
    
    
    
    6,428,572
    
    
    
    6
    
    
    
    42,356
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,362Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,600Change in unrealized loss on
investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Comprehensive loss:Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    416
    
    
    
    
    
    
    
    
    
    
    
    416Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,258
    )
    
    
    (29,258
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,842
    )Balance at December 31, 2006
    
    
    2,046,813
    
    
    
    2
    
    
    
    16,157,953
    
    
    
    16
    
    
    
    194,714
    
    
    
    (2,537
    )
    
    
    
    
    
    
    (138,276
    )
    
    
    53,919
   84




---



##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,733
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,733Issue of common stock upon
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    25,508
    
    
    
    
    
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163Issue of common stock for cash on
registered direct offering, net of
expenses
    
    
    
    
    
    
    
    
    
    
    4,249,668
    
    
    
    4
    
    
    
    33,353
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,357Preferred stock dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (307
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (307
    )Issue of warrants in connection
with registered direct offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,750
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,750
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (93
    )
    
    
    
    
    
    
    
    
    
    
    (93
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,053
    )
    
    
    (24,053
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,146
    )Balance at December 31, 2007
    
    
    2,046,813
    
    
    
    2
    
    
    
    20,433,129
    
    
    
    20
    
    
    
    222,906
    
    
    
    (2,630
    )
    
    
    
    
    
    
    (162,329
    )
    
    
    57,969Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,698
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,698Preferred stock dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,227
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,227
    )Comprehensive loss:Unrealized foreign exchange on
intercompany loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,330
    )
    
    
    
    
    
    
    
    
    
    
    (12,330
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,918
    
    
    
    
    
    
    
    
    
    
    
    14,918Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,386
    )
    
    
    (40,386
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,798
    )Balance at December 31, 2008
    
    
    2,046,813
    
    
    
    2
    
    
    
    20,433,129
    
    
    
    20
    
    
    
    223,377
    
    
    
    (42
    )
    
    
    
    
    
    
    (202,715
    )
    
    
    20,642
   85




---



##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 DeficitAdditional
    
    
    Accumulated
    
    
    
    
    
    
    accumulatedpaid-in
    
    
    other
    
    
    
    
    
    
    duringCapital
    
    
    comprehensive
    
    
    Deferred
    
    
    development
    
    
    TotalPreferred Stock
    
    
    Common Stock
    
    
    (as restated)
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    (as restated)No.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Warrant re-pricing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44Issue of common stock for cash
on registered direct offering,
net of expenses
    
    
    
    
    
    
    
    
    
    
    4,000,000
    
    
    
    4
    
    
    
    2,843
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,847Issue of common stock upon
draw down of Committed Equity
Finance Facility
    
    
    
    
    
    
    
    
    
    
    1,255,024
    
    
    
    2
    
    
    
    1,028
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,030Issue of common stock upon
exercise of stock options,
restricted stock units and
restricted stock
    
    
    
    
    
    
    
    
    
    
    55,210
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    810
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    810Comprehensive loss:Unrealized foreign exchange on
intercompany loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,651
    
    
    
    
    
    
    
    
    
    
    
    5,651Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,589
    )
    
    
    
    
    
    
    
    
    
    
    (5,589
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,570
    )
    
    
    (19,570
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,508
    )Balance at December 31, 2009,
as restated
    
    
    2,046,813
    
    
    
    2
    
    
    
    25,743,363
    
    
    
    26
    
    
    
    228,109
    
    
    
    20
    
    
    
    
    
    
    
    (222,285
    )
    
    
    5,872
   86




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (contd)
 DeficitAccumulated
    
    
    
    
    
    
    accumulatedAdditional
    
    
    other
    
    
    
    
    
    
    duringpaid-in
    
    
    comprehensive
    
    
    Deferred
    
    
    developmentPreferred Stock
    
    
    Common Stock
    
    
    capital
    
    
    income/(loss)
    
    
    compensation
    
    
    stage
    
    
    TotalNo.
    
    
    $000
    
    
    No.
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Issue of common stock
for cash on registered direct
offering, net of expenses
    
    
    
    
    
    
    
    
    
    
    5,200,000
    
    
    
    5
    
    
    
    11,892
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,897Issue of common stock upon
draw down of Committed Equity
Finance Facility
    
    
    
    
    
    
    
    
    
    
    2,818,925
    
    
    
    3
    
    
    
    4,860
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,863Warrant exercise
    
    
    
    
    
    
    
    
    
    
    2,618,266
    
    
    
    3
    
    
    
    2,496
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,499Issue of common stock on
private placement, net of
expenses
    
    
    
    
    
    
    
    
    
    
    8,323,190
    
    
    
    8
    
    
    
    13,972
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,980Stock-based awards exercised
    
    
    
    
    
    
    
    
    
    
    205,571
    
    
    
    
    
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77Preferred stock conversions
    
    
    (833,671
    )
    
    
    (1
    )
    
    
    1,655,599
    
    
    
    2
    
    
    
    3,514
    
    
    
    
    
    
    
    
    
    
    
    (3,515
    )
    
    
    Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,746
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,746Comprehensive loss:Unrealized foreign exchange on
intercompany loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,073
    )
    
    
    
    
    
    
    
    
    
    
    (2,073
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,084
    
    
    
    
    
    
    
    
    
    
    
    2,084Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,021
    )
    
    
    (16,021
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,010
    )Balance at December 31, 2010
    
    
    1,213,142
    
    
    
    1
    
    
    
    46,564,914
    
    
    
    47
    
    
    
    266,666
    
    
    
    31
    
    
    
    
    
    
    
    (241,821
    )
    
    
    24,924
   87




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Period fromAugust 13, 1996(inception)Year ended
    
    
    Year ended
    
    
    Year ended
    
    
    toDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010
    
    
    2010$000
    
    
    $000
    
    
    $000
    
    
    $000Operating activities:Net loss
    
    
    (40,386
    )
    
    
    (19,570
    )
    
    
    (16,021
    )
    
    
    (238,306
    )Adjustments to reconcile net loss to net cash
used in operating activities:Accretion of guaranteed stock
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of interest payable on notes
payable
    
    
    79
    
    
    
    2
    
    
    
    
    
    
    
    100Amortization of investment premiums, net
    
    
    (1,444
    )
    
    
    20
    
    
    
    
    
    
    
    (2,297
    )Change in valuation of derivative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    308Change in valuation of warrants
    
    
    (3,502
    )
    
    
    299
    
    
    
    338
    
    
    
    (6,070
    )Warrant re-pricing
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    44Depreciation
    
    
    1,154
    
    
    
    668
    
    
    
    457
    
    
    
    12,314Amortization of intangible assets
    
    
    708
    
    
    
    
    
    
    
    
    
    
    
    886Fixed asset impairment
    
    
    
    
    
    
    221
    
    
    
    
    
    
    
    221Unrealized foreign exchange (gains) losses
    
    
    4,831
    
    
    
    
    
    
    
    
    
    
    
    7,747Deferred revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98
    )Compensation for warrants issued to non
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,215Shares issued for IP rights
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    446Loss (gain) on disposal of property, plant
and equipment
    
    
    2
    
    
    
    83
    
    
    
    (13
    )
    
    
    99Goodwill and intangibles impairment
    
    
    7,934
    
    
    
    
    
    
    
    
    
    
    
    7,934Stock-based compensation
    
    
    1,698
    
    
    
    810
    
    
    
    1,746
    
    
    
    18,141Provision for restructuring
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,779Amortization of issuance costs of Preferred
Ordinary C shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,517Changes in operating assets and liabilities:Prepaid expenses and other assets
    
    
    1,732
    
    
    
    1,716
    
    
    
    516
    
    
    
    (232
    )Accounts payable and other current liabilities
    
    
    (2,701
    )
    
    
    821
    
    
    
    (3,067
    )
    
    
    (5,890
    )Net cash used in operating activities
    
    
    (29,905
    )
    
    
    (14,886
    )
    
    
    (16,044
    )
    
    
    (199,142
    )
  88




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF CASH FLOWS (contd)
 Period fromAugust 13, 1996(inception)Year ended
    
    
    Year ended
    
    
    Year ended
    
    
    toDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010
    
    
    2010$000
    
    
    $000
    
    
    $000
    
    
    $000Investing activities:Purchase of ALIGN
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,763
    )Purchase of property, plant and equipment
    
    
    (366
    )
    
    
    (15
    )
    
    
    (8
    )
    
    
    (8,831
    )Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    91
    
    
    
    41
    
    
    
    158Purchase of short-term investments on
deposit, net of maturities
    
    
    (3,057
    )
    
    
    
    
    
    
    
    
    
    
    (156,657
    )Cash proceeds from redemption of short term
securities
    
    
    30,765
    
    
    
    1,483
    
    
    
    
    
    
    
    162,729Net cash provided by (used in) investing
activities
    
    
    27,342
    
    
    
    1,559
    
    
    
    33
    
    
    
    (6,364
    )Financing activities:Payments of capital lease obligations
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    (3,719
    )Proceeds from issuance of ordinary and
preferred ordinary shares, net of issuance
costs
    
    
    
    
    
    
    
    
    
    
    30,820
    
    
    
    121,678Proceeds from issuance of common stock and
warrants, net of issuance costs
    
    
    
    
    
    
    3,845
    
    
    
    2,576
    
    
    
    82,404Proceeds from the exercise of stock options
and warrants, net of issuance costs
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    170Payment of preferred stock dividend
    
    
    (1,227
    )
    
    
    (307
    )
    
    
    
    
    
    
    (1,534
    )Repayment of government loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (455
    )Government loan received
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    414Loan received from Cyclacel Group plc
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,103Proceeds of committable loan notes issued
from shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,883Loans received from shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,645Cash and cash equivalents assumed on stock
purchase of Xcyte
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,915Costs associated with stock purchase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,951
    )Net cash (used in) provided by financing
activities
    
    
    (1,238
    )
    
    
    3,545
    
    
    
    33,396
    
    
    
    234,553Effect of exchange rate changes on cash and
cash equivalents
    
    
    (2,966
    )
    
    
    (2,945
    )
    
    
    617
    
    
    
    448Net (decrease) increase in cash and cash
equivalents
    
    
    (6,767
    )
    
    
    (12,727
    )
    
    
    18,002
    
    
    
    29,495Cash and cash equivalents, beginning of period
    
    
    30,987
    
    
    
    24,220
    
    
    
    11,493
    
    
    
    Cash and cash equivalents, end of period
    
    
    24,220
    
    
    
    11,493
    
    
    
    29,495
    
    
    
    29,495
  89




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##### Table of Contents



Period fromAugust 13, 1996(inception)Year ended
    
    
    Year ended
    
    
    Year ended
    
    
    toDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010
    
    
    2010$000
    
    
    $000
    
    
    $000
    
    
    $000Supplemental cash flow information:Cash received during the period for:Interest
    
    
    723
    
    
    
    59
    
    
    
    11
    
    
    
    11,715Taxes
    
    
    2,033
    
    
    
    1,523
    
    
    
    1,082
    
    
    
    17,522Cash paid during the period for:Interest
    
    
    
    
    
    
    (78
    )
    
    
    (155
    )
    
    
    (1,914
    )Schedule of non-cash transactions:Unpaid costs related to the issuance of
common stock
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    80Acquisitions of equipment purchased through
capital leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,470Issuance of common shares in connection with
license agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    592Issuance of Ordinary shares on conversion of
bridging loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,638Issuance of Preferred Ordinary C shares on
conversion of secured convertible loan notes
and accrued interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,893Issuance of Ordinary shares in lieu of
cash bonus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164Issuance of other long term payable on ALIGN
acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,122
  90




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1 Organization of the Company
   
    
    Acute myeloid leukemia, or AML in the elderly;
 
    
    Myelodysplastic syndromes, or MDS; and
 
    
    Non-small cell lung cancer or NSCLC.
  ® ® ®
  Basis of Presentation
  2 Summary of Significant Accounting Policies
 Use of Estimates
   91




---



##### Table of Contents



Concentration of Credit Risk and Other Risks and Uncertainties
   Foreign currency and currency translation
    Segments
  Cash and Cash Equivalents
  Trade Accounts Receivable and Allowance for Doubtful Accounts
   92




---



##### Table of Contents



Inventory
   Fair Value of Financial Instruments
  Property, Plant and Equipment
   Impairment of Long-lived Assets
     93




---



##### Table of Contents



Goodwill and intangible assets impairment
 Intangibles 
Goodwill and Other
 Property, Plant and Equipment
   Revenue Recognition
 Product sales
  Revenue Recognition -Products Revenue
Recognition  Overall
 Collaboration, research and development, and grant revenue
   94




---



##### Table of Contents



Clinical Trial Accounting
  Research and Development Expenditures
  Patent Costs
  Leased Assets
   Income Taxes
  Income taxes
  95




---



##### Table of Contents



Net Loss Per Common Share
 Earnings Per
Share
 Year ended
    
    
    Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010Stock options
    
    
    3,674,899
    
    
    
    3,349,876
    
    
    
    3,489,932Restricted Stock and Restricted Stock Units
    
    
    141,700
    
    
    
    91,145
    
    
    
    59,885Convertible preferred stock
    
    
    870,980
    
    
    
    870,980
    
    
    
    516,228Common stock issuable to Kingsbridge
    
    
    
    
    
    
    328,602
    
    
    
    Options issued in connection with the
October 2010 financing
    
    
    
    
    
    
    
    
    
    
    6,242,398Common stock warrants
    
    
    3,809,272
    
    
    
    7,044,363
    
    
    
    10,005,192Total shares excluded from calculation
    
    
    8,496,851
    
    
    
    11,684,966
    
    
    
    20,313,635
 Derivative Instruments
    96




---



##### Table of Contents



Stock-based Compensation
 Compensation  Stock Compensation
  Comprehensive Income (Loss)
 Comprehensive Income
 Recent Accounting Pronouncements
 Revenue
Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition, a consensus of
the FASB Emerging Issues Task Force
  97




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##### Table of Contents



3 Restatement of Previously Issued Financial Statements
  Background on the Restatement
  Accounting for Preferred Stock Dividends
    98




---



##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED BALANCE SHEET
 At December 31, 2009
 (In $000s, except share amounts)
 As PreviouslyReported onForm 10-K/A
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,493
    
    
    $
    
    
    
    $
    11,493Inventory
    
    
    145
    
    
    
    
    
    
    
    145Prepaid expenses and other current assets
    
    
    1,731
    
    
    
    
    
    
    
    1,731Total current assets
    
    
    13,369
    
    
    
    
    
    
    
    13,369Property, plant and equipment (net)
    
    
    901
    
    
    
    
    
    
    
    901Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    14,466
    
    
    $
    
    
    
    $
    14,466LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,709
    
    
    $
    
    
    
    $
    1,709Accrued and other current liabilities
    
    
    6,709
    
    
    
    (1,228
    )
    
    
    5,481Warrants liability
    
    
    342
    
    
    
    
    
    
    
    342Current portion of other accrued restructuring charges
    
    
    1,062
    
    
    
    
    
    
    
    1,062Total current liabilities
    
    
    9,822
    
    
    
    (1,228
    )
    
    
    8,594Total liabilities
    
    
    9,822
    
    
    
    (1,228
    )
    
    
    8,594Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
authorized and 2,046,813 shares issued and
outstanding. Aggregate preference in liquidation
of $21,696,218
    
    
    2
    
    
    
    
    
    
    
    2Common stock, $0.001 par value; 100,000,000 shares
authorized and 25,743,363 shares issued and
outstanding
    
    
    26
    
    
    
    
    
    
    
    26Additional paid-in capital
    
    
    226,881
    
    
    
    1,228
    
    
    
    228,109Accumulated other comprehensive income
    
    
    20
    
    
    
    
    
    
    
    20Deficit accumulated during the development stage
    
    
    (222,285
    )
    
    
    
    
    
    
    (222,285
    )Total stockholders equity
    
    
    4,644
    
    
    
    1,228
    
    
    
    5,872Total liabilities and stockholders equity
    
    $
    14,466
    
    
    $
    
    
    
    $
    14,466
  99




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4 Significant Contracts
 Distribution, Licensing and Research Agreements
     100




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##### Table of Contents



5 Cash and Cash Equivalents
  December 31,2009
    
    
    2010$000
    
    
    $000Cash
    
    
    2,996
    
    
    
    429Deposits with original maturity of less than three months
    
    
    8,497
    
    
    
    29,066Total cash and cash equivalents
    
    
    11,493
    
    
    
    29,495
 6 Fair Value
 Fair value measurements
 Fair Value Measurements and Disclosures
 
    
    Level 1: Quoted prices (unadjusted) in active markets that are accessible at the
measurement date for assets or liabilities. The fair value hierarchy gives the highest
priority to Level 1 inputs.
 
    
    Level 2: Inputs other than quoted prices within Level 1 that are observable for the
asset or liability, either directly or indirectly.
 
    
    Level 3: Unobservable inputs that are used when little or no market data is available.
The fair value hierarchy gives the lowest priority to Level 3 inputs.
   Fair Value MeasurementsUsing Fair Value HierarchyLevel 1
    
    Level 2
    
    Level 3$000
    
    $000
    
    $000Warrants liability
    
    
    
    
    
    
    680
  101




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##### Table of Contents



Warrants Liability
 Derivatives and Hedging
 December 31,2009
    
    
    2010Exercise price
    
    $
    8.44
    
    
    $
    8.44Expected term
    
    4.13 Yrs
    
    
    3.13 YrsRisk free interest rate
    
    
    2.13
    %
    
    
    1.02
    %Expected volatility
    
    
    96
    %
    
    
    121
    %Expected dividend yield over expected term
    
    
    
    
    
    
    
  Level 3$000Balance as of December 31, 2009
    
    
    342Change in valuation of warrants liability
    
    
    338Balance as of December 31, 2010
    
    
    680
  7 Prepaid Expenses and Other Current Assets
  December 31,2009
    
    
    2010$000
    
    
    $000Research and development tax credit receivable
    
    
    1,096
    
    
    
    660Prepayments
    
    
    456
    
    
    
    317Other current assets
    
    
    179
    
    
    
    4051,731
    
    
    
    1,382
  102




---



##### Table of Contents



8 Property, Plant and Equipment
  Useful lives in years from


    
    
    December 31,date of acquisition
    
    
    2009
    
    
    2010$000
    
    
    $000Leasehold improvements
    
    
    5 to 15 yrs
    
    
    
    860
    
    
    
    844Research and laboratory equipment
    
    
    3 to 5 yrs
    
    
    
    7,673
    
    
    
    6,281Office equipment and furniture
    
    
    3 to 5 yrs
    
    
    
    1,280
    
    
    
    1,2679,813
    
    
    
    8,392Less: accumulated depreciation
and amortization
    
    
    
    
    
    
    (8,912
    )
    
    
    (7,984
    )901
    
    
    
    408
    9 Accrued and Other Current Liabilities
  December 31,2009(as restated)
    
    
    2010$000
    
    
    $000Accrued research and development
    
    
    2,654
    
    
    
    2,793Accrued IP / Patent costs
    
    
    283
    
    
    
    26Accrued compensation
    
    
    136
    
    
    
    112Amount payable under distribution agreement (1)
    
    
    651
    
    
    
    Amount payable under guarantee (2)
    
    
    796
    
    
    
    Other current liabilities
    
    
    961
    
    
    
    1,2015,481
    
    
    
    4,132
 (1)
    
    For more information please see Note 4  Significant Contracts.(2)
    
    For more information please see Note 10  Commitments and Contingencies.  103




---



##### Table of Contents



10 Commitments and Contingencies
 General
  Leases
  Operatingleaseobligations$0002011
    
    
    5572012
    
    
    5452013
    
    
    4052014
    
    
    4052015
    
    
    400Thereafter
    
    
    4,270Total
    
    
    6,582
   Guarantee
   104




---



##### Table of Contents



Purchase Obligations
  Preferred Dividends
  Legal proceedings
 ® ®
  105




---



##### Table of Contents



11 Stockholders Equity
 Preferred stock
       106




---



##### Table of Contents



Year from November 1, 2010 to October 31, 2011
    
    $
    10.24Year from November 1, 2011 to October 31, 2012
    
    $
    10.18Year from November 1, 2012 to October 31, 2013
    
    $
    10.12Year from November 1, 2013 to October 31, 2014
    
    $
    10.06November 1, 2014 and thereafter
    
    $
    10.00
  Conversion of Convertible Preferred Stock
  Year endedDecember 31, 2010Preferred shares exchanged
    
    
    833,671Common shares issued:At stated convertible option
    
    
    354,752Incremental shares issued under the exchange transaction
    
    
    1,300,847Total common shares issued
    
    
    1,655,599
   107




---



##### Table of Contents



Common Stock
 January 2010 Registered Direct Financings
   October 2010 Private Placement
   108




---



##### Table of Contents



July 2009 Registered Direct Financing
   December 2007 Committed Equity Financing Facility or CEFF
    109




---



##### Table of Contents



Common Stock Warrants
   110




---



##### Table of Contents



WeightedAverageExpiration
    
    
    Common Shares
    
    
    ExerciseIssued in Connection With
    
    Date
    
    
    Issuable
    
    
    PriceApril 2006 stock issuance
    
    
    2013
    
    
    
    2,571,429
    
    
    $
    7.00February 2007 stock issuance
    
    
    2014
    
    
    
    1,062,412
    
    
    $
    8.44December 2007 CEFF
    
    
    2013
    
    
    
    100,000
    
    
    $
    1.40July 2009 Series II stock issuance
    
    
    2014
    
    
    
    692,256
    
    
    $
    1.00January 2010 stock issuance
    
    
    2015
    
    
    
    712,500
    
    
    $
    3.26January 2010 stock issuance
    
    
    2015
    
    
    
    705,000
    
    
    $
    2.85October 2010 stock issuance
    
    
    2015
    
    
    
    4,161,595
    
    
    $
    1.92Total
    
    
    
    
    
    
    10,005,192
    
    
    $
    4.01
 Exercise of Stock Options
  12 Stock-Based Compensation Arrangements
 1 4
   Year ended
    
    
    Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010$000
    
    
    $000
    
    
    $000Research and development
    
    
    736
    
    
    
    271
    
    
    
    351Selling, general and administrative
    
    
    962
    
    
    
    539
    
    
    
    1,395Stock-based compensation costs before income taxes
    
    
    1,698
    
    
    
    810
    
    
    
    1,746
  111




---



##### Table of Contents



2006 Plans
      112




---



##### Table of Contents



Outstanding Options
  WeightedWeighted
    
    
    averageNumber of
    
    
    average
    
    
    remaining
    
    
    Aggregateoptions
    
    
    exercise
    
    
    contractual
    
    
    intrinsicCyclacel Pharmaceuticals, Inc.
    
    outstanding
    
    
    price
    
    
    term (years)
    
    
    valueOptions outstanding at December 31, 2008
    
    
    3,674,899
    
    
    $
    4.36
    
    
    
    8.74
    
    
    $
    2Granted
    
    
    221,000
    
    
    $
    0.39Exercised
    
    
    (17,180
    )
    
    $
    0.43Cancelled/forfeited
    
    
    (528,843
    )
    
    $
    3.76Options outstanding at December 31, 2009
    
    
    3,349,876
    
    
    $
    4.21
    
    
    
    7.76
    
    
    $
    698Granted
    
    
    607,300
    
    
    $
    1.82Exercised
    
    
    (174,311
    )
    
    $
    0.43Cancelled/forfeited
    
    
    (292,933
    )
    
    $
    4.54Options outstanding at December 31, 2010
    
    
    3,489,932
    
    
    $
    3.96
    
    
    
    7.22
    
    
    $
    938Unvested at December 31, 2010
    
    
    1,151,947
    
    
    $
    2.02
    
    
    
    8.68
    
    
    $
    344Vested and exercisable at December 31, 2010
    
    
    2,337,985
    
    
    $
    4.92
    
    
    
    6.50
    
    
    $
    594
  WeightedAverageNumber
    
    
    remaining
    
    
    NumberExercise price ($)
    
    outstanding
    
    
    contractual life
    
    
    exercisable0.29           1.98
    
    
    1,341,890
    
    
    
    8.54
    
    
    
    584,1622.15           4.95
    
    
    394,000
    
    
    
    8.13
    
    
    
    138,6775.26           5.81
    
    
    524,033
    
    
    
    6.83
    
    
    
    397,9536.30           8.30
    
    
    1,208,009
    
    
    
    5.68
    
    
    
    1,195,19315.00       45.30
    
    
    22,000
    
    
    
    4.11
    
    
    
    22,0003,489,932
    
    
    
    
    
    
    
    2,337,985
  Year ended
    
    Year ended
    
    Year endedDecember 31,
    
    December 31,
    
    December 31,2008
    
    2009
    
    2010Expected term (years)
    
    4.25  6 Yrs
    
    0.75  5 Yrs
    
    5  6 YrsRisk free interest rate
    
    1.54  3.76%
    
    0.325  .84%
    
    1.64  2.96%Volatility
    
    45  75%
    
    65  169%
    
    90  102%Dividends
    
    0.00%
    
    0.00%
    
    0.00%Resulting weighted average
grant date fair value
    
    $0.68
    
    $0.39
    
    $1.40
  113




---



##### Table of Contents



114




---



##### Table of Contents



Restricted Stock
  Weighted Average GrantRestricted Stock Units
    
    
    Date Value Per ShareNon-vested at December 31, 2009
    
    
    36,458
    
    
    $
    0.44Vested
    
    
    (12,504
    )
    
    $
    0.44Non-vested at December 31, 2010
    
    
    23,954
    
    
    $
    0.44
 Restricted Stock Units
  Weighted Average GrantRestricted Stock Units
    
    
    Date Value Per ShareNon-vested at December 31, 2009
    
    
    54,687
    
    
    $
    0.44Vested
    
    
    (18,756
    )
    
    $
    0.44Non-vested at December 31, 2010
    
    
    35,931
    
    
    $
    0.44
 13 Restructuring
   115




---



##### Table of Contents



Leaserestructuring
    
    
    Sales taxcharges
    
    
    assessment
    
    
    Total$000
    
    
    $000
    
    
    $000Balance at December 31, 2008
    
    
    2,091
    
    
    
    270
    
    
    
    2,361Cash payments
    
    
    (1,156
    )
    
    
    (372
    )
    
    
    (1,528
    )Adjustments for lease-related
deferred expenses and liabilities
    
    
    127
    
    
    
    
    
    
    
    127Adjustment for sales tax assessment
    
    
    
    
    
    
    102
    
    
    
    102Balance at December 31, 2009
    
    
    1,062
    
    
    
    
    
    
    
    1,062Cash payments
    
    
    (1,104
    )
    
    
    
    
    
    
    (1,104
    )Adjustments for lease-related
deferred expenses and liabilities
    
    
    42
    
    
    
    
    
    
    
    42Balance at December 31, 2010
    
    
    
    
    
    
    
    
    
    
    
 Lease restructuring charges
   Sales tax assessment
   116




---



##### Table of Contents



14 Employee Benefit Plans
 Pension Plan
  401(k) Plan
  15 Taxes
  Year ended
    
    
    Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010$000
    
    
    $000
    
    
    $000Domestic
    
    
    (11,337
    )
    
    
    (3,013
    )
    
    
    (4,664
    )Foreign
    
    
    (30,798
    )
    
    
    (17,505
    )
    
    
    (12,014
    )Total loss before taxes
    
    
    (42,135
    )
    
    
    (20,518
    )
    
    
    (16,678
    )
  Year ended
    
    
    Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010$000
    
    
    $000
    
    
    $000Current  domestic
    
    
    (4
    )
    
    
    (12
    )
    
    
    (10
    )Current  foreign
    
    
    1,753
    
    
    
    960
    
    
    
    667Current  total
    
    
    1,749
    
    
    
    948
    
    
    
    657
   117




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##### Table of Contents



Year ended
    
    
    Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010$000
    
    
    $000
    
    
    $000Loss before income taxes
    
    
    (42,135
    )
    
    
    (20,518
    )
    
    
    (16,678
    )Income tax expense computed at statutory
federal tax rate
    
    
    (14,361
    )
    
    
    (6,976
    )
    
    
    (5,672
    )State income tax (net of federal benefit)
    
    
    3
    
    
    
    8
    
    
    
    7Disallowed expenses and non-taxable income
    
    
    (1,939
    )
    
    
    (773
    )
    
    
    (490
    )Tax losses
    
    
    3,584
    
    
    
    2,322
    
    
    
    1,605Research and development tax relief
    
    
    (2,191
    )
    
    
    (1,185
    )
    
    
    (793
    )Valuation allowance
    
    
    11,161
    
    
    
    4,605
    
    
    
    3,984Research and development tax credit rate
difference
    
    
    438
    
    
    
    237
    
    
    
    132Foreign tax rate differential
    
    
    1,556
    
    
    
    814
    
    
    
    570(1,749
    )
    
    
    (948
    )
    
    
    (657
    )
  December 31,2009
    
    
    2010$000
    
    
    $000Net operating loss carryforwards
    
    
    42,534
    
    
    
    43,056Depreciation, amortization and impairment of property and equipment
    
    
    1,996
    
    
    
    1,925Lease restructuring charges
    
    
    399
    
    
    
    Stock Options
    
    
    775
    
    
    
    1,228Accrued Expenses
    
    
    2,684
    
    
    
    3,778Other
    
    
    67
    
    
    
    89Translation adjustment
    
    
    (3,097
    )
    
    
    (2,452
    )Deferred Tax Assets
    
    
    45,358
    
    
    
    47,624Valuation allowance for deferred tax assets
    
    
    (45,358
    )
    
    
    (47,624
    )Net deferred taxes
    
    
    
    
    
    
    
   118




---



##### Table of Contents



December 31,2009
    
    
    2010$000
    
    
    $000Accumulated tax losses
    
    
    127,633
    
    
    
    132,521
       119




---



##### Table of Contents



16 Geographic Information
  Year ended
    
    
    Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010$000
    
    
    $000
    
    
    $000RevenueUnited States
    
    
    838
    
    
    
    910
    
    
    
    574United Kingdom
    
    
    39
    
    
    
    1
    
    
    
    112877
    
    
    
    911
    
    
    
    686Net lossUnited States
    
    
    (11,341
    )
    
    
    (3,007
    )
    
    
    (4,662
    )United Kingdom
    
    
    (29,045
    )
    
    
    (16,563
    )
    
    
    (11,359
    )(40,386
    )
    
    
    (19,570
    )
    
    
    (16,021
    )
 December 31,2008
    
    
    2009
    
    
    2010$000
    
    
    $000
    
    
    $000Total AssetsUnited States
    
    
    22,842
    
    
    
    10,460
    
    
    
    30,055United Kingdom
    
    
    8,115
    
    
    
    4,006
    
    
    
    1,40430,957
    
    
    
    14,466
    
    
    
    31,459Long Lived Assets, netUnited States
    
    
    516
    
    
    
    330
    
    
    
    161United Kingdom
    
    
    1,232
    
    
    
    571
    
    
    
    2471,748
    
    
    
    901
    
    
    
    408
  120




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##### Table of Contents



17 Selected Quarterly Information (unaudited)
  For the three months endedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2010
    
    
    2010
    
    
    2010
    
    
    2010$000, except per share amountsRevenues
    
    
    271
    
    
    
    119
    
    
    
    159
    
    
    
    137Loss before taxes
    
    
    (5,244
    )
    
    
    (4,163
    )
    
    
    (3,950
    )
    
    
    (3,321
    )Net loss applicable to common shareholders
    
    
    (5,819
    )
    
    
    (6,543
    )
    
    
    (3,989
    )
    
    
    (3,352
    )Net loss per share  basic and diluted (1)
    
    $
    (0.18
    )
    
    $
    (0.18
    )
    
    $
    (0.11
    )
    
    $
    (0.07
    )
 For the three months endedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2009
    
    
    2009
    
    
    2009
    
    
    2009$000, except per share amountsRevenues
    
    
    228
    
    
    
    266
    
    
    
    230
    
    
    
    187Loss before taxes
    
    
    (5,421
    )
    
    
    (7,278
    )
    
    
    (3,329
    )
    
    
    (4,490
    )Net loss applicable to common shareholders
    
    
    (5,370
    )
    
    
    (7,352
    )
    
    
    (3,431
    )
    
    
    (4,645
    )Net loss per share  basic and diluted (1)
    
    $
    (0.26
    )
    
    $
    (0.36
    )
    
    $
    (0.15
    )
    
    $
    (0.19
    )
 (1)
    
    The addition of loss per common share by quarter may not equal the total loss per common
share for the year or year to date due to rounding.  121




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED BALANCE SHEET (Unaudited)
 As of September 30, 2010
 (In $000s, except share amounts)
 As PreviouslyReported onForm 10-Q
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    18,482
    
    
    $
    
    
    
    $
    18,482Inventory
    
    
    144
    
    
    
    
    
    
    
    144Prepaid expenses and other current assets
    
    
    1,057
    
    
    
    
    
    
    
    1,057Total current assets
    
    
    19,683
    
    
    
    
    
    
    
    19,683Property, plant and equipment (net)
    
    
    512
    
    
    
    
    
    
    
    512Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    20,391
    
    
    $
    
    
    
    $
    20,391LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,340
    
    
    $
    
    
    
    $
    1,340Accrued and other current liabilities
    
    
    5,641
    
    
    
    (1,213
    )
    
    
    4,428Warrants liability
    
    
    785
    
    
    
    
    
    
    
    785Current portion of other accrued restructuring charges
    
    
    199
    
    
    
    
    
    
    
    199Total current liabilities
    
    
    7,965
    
    
    
    (1,213
    )
    
    
    6,752Total liabilities
    
    
    7,965
    
    
    
    (1,213
    )
    
    
    6,752Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
authorized and 1,213,142 shares issued and
outstanding. Aggregate preference in liquidation of
$13,344,562
    
    
    2
    
    
    
    
    
    
    
    2Common stock, $0.001 par value; 100,000,000 shares
authorized and 38,235,991 shares issued and
outstanding
    
    
    37
    
    
    
    
    
    
    
    37Additional paid-in capital
    
    
    250,466
    
    
    
    1,813
    
    
    
    252,279Accumulated other comprehensive income
    
    
    (30
    )
    
    
    
    
    
    
    (30
    )Deficit accumulated during the development stage
    
    
    (238,049
    )
    
    
    (600
    )
    
    
    (238,649
    )Total stockholders equity
    
    
    12,426
    
    
    
    1,213
    
    
    
    13,639Total liabilities and stockholders equity
    
    $
    20,391
    
    
    $
    
    
    
    $
    20,391
  122




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED BALANCE SHEET (Unaudited)
 As of June 30, 2010
 (In $000s, except share amounts)
 As PreviouslyReported onForm 10-Q
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,543
    
    
    $
    
    
    
    $
    19,543Inventory
    
    
    39
    
    
    
    
    
    
    
    39Prepaid expenses and other current assets
    
    
    1,925
    
    
    
    
    
    
    
    1,925Total current assets
    
    
    21,507
    
    
    
    
    
    
    
    21,507Property, plant and equipment (net)
    
    
    606
    
    
    
    
    
    
    
    606Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    22,309
    
    
    $
    
    
    
    $
    22,309LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,550
    
    
    $
    
    
    
    $
    1,550Accrued and other current liabilities
    
    
    5,255
    
    
    
    (1,032
    )
    
    
    4,223Warrants liability
    
    
    858
    
    
    
    
    
    
    
    858Current portion of other accrued restructuring charges
    
    
    492
    
    
    
    
    
    
    
    492Total current liabilities
    
    
    8,155
    
    
    
    (1,032
    )
    
    
    7,123Total liabilities
    
    
    8,155
    
    
    
    (1,032
    )
    
    
    7,123Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
authorized and 1,213,142 shares issued and
outstanding. Aggregate preference in liquidation
of $13,162,591
    
    
    1
    
    
    
    
    
    
    
    1Common stock, $0.001 par value; 100,000,000 shares
authorized and 36,920,343 shares issued and
outstanding
    
    
    37
    
    
    
    
    
    
    
    37Additional paid-in capital
    
    
    248,314
    
    
    
    1,632
    
    
    
    249,946Accumulated other comprehensive income
    
    
    42
    
    
    
    
    
    
    
    42Deficit accumulated during the development stage
    
    
    (234,240
    )
    
    
    (600
    )
    
    
    (234,840
    )Total stockholders equity
    
    
    14,154
    
    
    
    1,032
    
    
    
    15,186Total liabilities and stockholders equity
    
    $
    22,309
    
    
    $
    
    
    
    $
    22,309
  123




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 CONSOLIDATED BALANCE SHEET (Unaudited)
 As of March 31, 2010
 (In $000s, except share amounts)
 As PreviouslyReported onForm 10-Q
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    24,200
    
    
    $
    
    
    
    $
    24,200Inventory
    
    
    107
    
    
    
    
    
    
    
    107Prepaid expenses and other current assets
    
    
    1,558
    
    
    
    
    
    
    
    1,558Total current assets
    
    
    25,865
    
    
    
    
    
    
    
    25,865Property, plant and equipment (net)
    
    
    715
    
    
    
    
    
    
    
    715Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    26,776
    
    
    $
    
    
    
    $
    26,776LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,782
    
    
    $
    
    
    
    $
    1,782Accrued and other current liabilities
    
    
    5,818
    
    
    
    (1,443
    )
    
    
    4,375Warrants liability
    
    
    1,131
    
    
    
    
    
    
    
    1,131Current portion of other accrued restructuring charges
    
    
    780
    
    
    
    
    
    
    
    780Total current liabilities
    
    
    9,511
    
    
    
    (1,443
    )
    
    
    8,068Total liabilities
    
    
    9,511
    
    
    
    (1,443
    )
    
    
    8,068Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
authorized and 1,923,413 shares issued and
outstanding. Aggregate preference in liquidation
of $20,676,690
    
    
    2
    
    
    
    
    
    
    
    2Common stock, $0.001 par value; 100,000,000 shares
authorized and 35,411,325 shares issued and
outstanding
    
    
    35
    
    
    
    
    
    
    
    35Additional paid-in capital
    
    
    244,991
    
    
    
    1,528
    
    
    
    246,519Accumulated other comprehensive income
    
    
    52
    
    
    
    
    
    
    
    52Deficit accumulated during the development stage
    
    
    (227,815
    )
    
    
    (85
    )
    
    
    (227,900
    )Total stockholders equity
    
    
    17,265
    
    
    
    1,443
    
    
    
    18,708Total liabilities and stockholders equity
    
    $
    26,776
    
    
    $
    
    
    
    $
    26,776
  124




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET (Unaudited)
 As of September 30, 2009
(In $000s, except share amounts)
 As PreviouslyReported onForm 10-Q
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,433
    
    
    $
    
    
    
    $
    14,433Short-term investments
    
    
    
    
    
    
    
    
    
    
    Inventory
    
    
    140
    
    
    
    
    
    
    
    140Prepaid expenses and other current assets
    
    
    1,652
    
    
    
    
    
    
    
    1,652Total current assets
    
    
    16,225
    
    
    
    
    
    
    
    16,225Property, plant and equipment (net)
    
    
    1,121
    
    
    
    
    
    
    
    1,121Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    17,542
    
    
    $
    
    
    
    
    17,542LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,463
    
    
    $
    
    
    
    $
    1,463Accrued liabilities
    
    
    5,228
    
    
    
    
    
    
    
    5,228Other current liabilities
    
    
    1,336
    
    
    
    (921
    )
    
    
    415Warrant liability
    
    
    238
    
    
    
    
    
    
    
    238Current portion of other accrued restructuring charges
    
    
    1,063
    
    
    
    
    
    
    
    1,063Total current liabilities
    
    
    9,328
    
    
    
    (921
    )
    
    
    8,407Other accrued restructuring charges, net of current
    
    
    267
    
    
    
    
    
    
    
    267Other long term payables
    
    
    
    
    
    
    
    
    
    
    Total liabilities
    
    
    9,595
    
    
    
    (921
    )
    
    
    8,674Stockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
authorized and 2,046,813 shares issued and outstanding.
Aggregate preference in liquidation of $20,673,000
    
    
    2
    
    
    
    
    
    
    
    2Common stock, $0.001 par value; 100,000,000 shares
authorized and 24,433,129 shares issued and outstanding
    
    
    24
    
    
    
    
    
    
    
    24Additional paid-in capital
    
    
    225,864
    
    
    
    921
    
    
    
    226,785Accumulated other comprehensive loss
    
    
    5
    
    
    
    
    
    
    
    5Deficit accumulated during the development stage
    
    
    (217,948
    )
    
    
    
    
    
    
    (217,948
    )Total stockholders equity
    
    
    7,947
    
    
    
    921
    
    
    
    8,868Total liabilities and stockholders equity
    
    $
    17,542
    
    
    $
    
    
    
    $
    17,542
  125




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET (Unaudited)
 As of June 30, 2009
(In $000s, except share amounts)
 As PreviouslyReported onForm 10-Q
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    15,864
    
    
    $
    
    
    
    $
    15,864Short-term investments
    
    
    
    
    
    
    
    
    
    
    Inventory
    
    
    306
    
    
    
    
    
    
    
    306Prepaid expenses and other current assets
    
    
    1,797
    
    
    
    
    
    
    
    1,797Total current assets
    
    
    17,967
    
    
    
    
    
    
    
    17,967Property, plant and equipment (net)
    
    
    1,297
    
    
    
    
    
    
    
    1,297Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    19,460
    
    
    $
    
    
    
    $
    19,460LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,440
    
    
    $
    
    
    
    $
    1,440Accrued liabilities
    
    
    6,921
    
    
    
    
    
    
    
    6,921Other current liabilities
    
    
    777
    
    
    
    (614
    )
    
    
    163Warrant liability
    
    
    339
    
    
    
    
    
    
    
    339Current portion of other accrued restructuring charges
    
    
    1,209
    
    
    
    
    
    
    
    1,209Total current liabilities
    
    
    10,686
    
    
    
    (614
    )
    
    
    10,072Other accrued restructuring charges, net of current
    
    
    526
    
    
    
    
    
    
    
    526Other long term payables
    
    
    
    
    
    
    
    
    
    
    Total liabilities
    
    
    11,212
    
    
    
    (614
    )
    
    
    10,598Stockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares and
2,046,813 shares issued and outstanding. Aggregate
preference in liquidation of $20,673,000
    
    
    2
    
    
    
    
    
    
    
    2Common stock, $0.001 par value; 100,000,000 shares
authorized and 20,433,129 shares issued and outstanding
    
    
    20
    
    
    
    
    
    
    
    20Additional paid-in capital
    
    
    222,932
    
    
    
    614
    
    
    
    223,546Accumulated other comprehensive loss
    
    
    118
    
    
    
    
    
    
    
    118Deficit accumulated during the development stage
    
    
    (214,824
    )
    
    
    
    
    
    
    (214,824
    )Total stockholders equity
    
    
    8,248
    
    
    
    614
    
    
    
    8,862Total liabilities and stockholders equity
    
    $
    19,460
    
    
    $
    
    
    
    $
    19,460
  126




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##### Table of Contents



CYCLACEL PHARMACEUTICALS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
 At March 31, 2009
 (In $000s, except share amounts)
 AsPreviouslyReported onForm 10-Q
    
    
    Adjustments
    
    
    As RestatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    20,442
    
    
    $
    
    
    
    $
    20,442Short-term investments
    
    
    
    
    
    
    
    
    
    
    Inventory
    
    
    460
    
    
    
    
    
    
    
    460Prepaid expenses and other current assets
    
    
    2,529
    
    
    
    
    
    
    
    2,529Total current assets
    
    
    23,431
    
    
    
    
    
    
    
    23,431Property, plant and equipment (net)
    
    
    1,540
    
    
    
    
    
    
    
    1,540Deposits and other assets
    
    
    196
    
    
    
    
    
    
    
    196Total assets
    
    $
    25,167
    
    
    $
    
    
    
    $
    25,167LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,812
    
    
    $
    
    
    
    $
    1,812Accrued liabilities
    
    
    5,045
    
    
    
    
    
    
    
    5,045Other current liabilities
    
    
    578
    
    
    
    (307
    )
    
    
    271Warrant liability
    
    
    51
    
    
    
    
    
    
    
    51Current portion of other accrued restructuring charges
    
    
    1,063
    
    
    
    
    
    
    
    1,063Total current liabilities
    
    
    8,549
    
    
    
    (307
    )
    
    
    8,242Other accrued restructuring charges, net of current
    
    
    780
    
    
    
    
    
    
    
    780Other long term payables
    
    
    637
    
    
    
    
    
    
    
    637Total liabilities
    
    
    9,966
    
    
    
    (307
    )
    
    
    9,659Stockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
and 2,046,813 shares issued and outstanding at.
Aggregate preference in liquidation of $20,673,000
    
    
    2
    
    
    
    Common stock, $0.001 par value; 100,000,000 shares
authorized and 20,433,129 shares issued and
outstanding
    
    
    20
    
    
    
    
    
    
    
    20Additional paid-in capital
    
    
    222,886
    
    
    
    307
    
    
    
    223,193Accumulated other comprehensive loss
    
    
    71
    
    
    
    
    
    
    
    71Deficit accumulated during the development stage
    
    
    (207,778
    )
    
    
    
    
    
    
    (207,778
    )Total stockholders equity
    
    
    15,201
    
    
    
    307
    
    
    
    15,508Total liabilities and stockholders equity
    
    $
    25,167
    
    
    $
    
    
    
    $
    25,167
  127




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##### Table of Contents



18 Subsequent Events
   
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls
     Managements Annual Report on Internal Control Over Financial Reporting
      128




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##### Table of Contents



Internal Control  Integrated Framework
 Internal Control  Integrated Framework
  Internal Control  Integrated
Framework
  129




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##### Table of Contents



(c) Plan for Remediation of the Material Weakness in Internal Control Over Financial Reporting
   (d) Changes in Internal Control Over Financial Reporting
   130




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##### Table of Contents



PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
 Executive Officers and Directors
  Name
    
    Age
    
    PositionSpiro Rombotis
    
    52
    
    President and Chief Executive Officer; DirectorPaul McBarron
    
    50
    
    Executive Vice President  Finance, Chief Financial Officer, Chief Operating Officer and Secretary; DirectorDr. Judy Chiao
    
    51
    
    Vice President, Clinical Development and Regulatory AffairsRobert Sosnowski
    
    52
    
    Vice President, Sales & MarketingNon-Employee DirectorsDr. Nicholas Bacopoulos
    
    62
    
    DirectorSir John Banham
    
    70
    
    DirectorDr. Christopher Henney
    
    69
    
    Vice Chairman of the Board of DirectorsDaniel K. Spiegelman
    
    52
    
    DirectorDr. David UPrichard
    
    62
    
    Chairman of the Board of Directors; Common Stock Nominee for Class 2 DirectorDirector NomineesLloyd Sems
    
    39
    
    Preferred Stock Director NomineeGregory T. Hradsky
    
    50
    
    Preferred Stock Director Nominee
 Spiro Rombotis.
  Paul McBarron .
  131




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##### Table of Contents



Judy Chiao, M.D. , ® summa cum laude
 Robert Sosnowski.
 Nicholas Bacopoulos , Ph.D. ® ® ® ®
  132




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##### Table of Contents



Sir John Banham .
  Christopher S. Henney Ph.D. D.Sc.
  Daniel K. Spiegelman M.B.A.
   133




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##### Table of Contents



David UPrichard Ph.D.
  Gregory T. Hradsky.
 Lloyd Sems.
 Corporate Governance
   134




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##### Table of Contents



Compensation and Organization Development Committee.
 Nominating and Corporate Governance Committee.
  135




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##### Table of Contents



Compliance with Section 16(a) of the Exchange
  Code of Conduct and Ethics
   136




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##### Table of Contents



Item 11.
    
    Executive Compensation
 Summary Compensation Table
  AllStock
    
    
    Option
    
    
    OtherSalary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    
    ($)
    
    
    ($)(1)
    
    
    ($)(2)
    
    
    ($)(3)
    
    
    ($)(4)
    
    
    ($)Spiro Rombotis
President and
    
    
    2010
    
    
    
    476,100
    
    
    
    59,500
    
    
    
    
    
    
    
    92,250
    
    
    
    32,506
    
    
    
    660,356Chief Executive Officer
    
    
    2009
    
    
    
    460,000
    
    
    
    138,000
    (4)
    
    
    
    
    
    
    
    
    
    
    32,188
    
    
    
    630,188Paul McBarron(5)Executive Vice President, Finance, Chief Operating Officer,
    
    
    2010
    
    
    
    289,768
    
    
    
    36,350
    
    
    
    
    
    
    
    92,250
    
    
    
    17,732
    
    
    
    436,100Chief Financial Officer, and Secretary
    
    
    2009
    
    
    
    288,297
    
    
    
    86,489
    (4)
    
    
    
    
    
    
    
    
    
    
    17,903
    
    
    
    392,689Judy Chiao,
MD
Vice President, Clinical
    
    
    2010
    
    
    
    312,570
    
    
    
    75,000
    
    
    
    
    
    
    
    76,875
    
    
    
    19,624
    
    
    
    484,069Development and Regulatory Affairs
    
    
    2009
    
    
    
    302,000
    
    
    
    72,480
    (4)
    
    
    
    
    
    
    
    
    
    
    20,552
    
    
    
    395,032
 
 (1)
    
    Bonuses earned in 2009 were paid during fiscal year 2010 and were not accrued in the
Companys Financial Statements. Bonuses earned in 2010 were paid during fiscal year 2010 and
were not accrued in the Companys Financial Statements.(2)
    
    This column represents the dollar amount recognized for financial statement reporting
purposes for the fair value of stock awards. The fair value, a non-cash expense, was estimated
using the Black-Scholes option-pricing method in accordance with ASC Topic 718. See Note 13 to
our Financial Statements reported in our Form 10-K/A for our fiscal year ended December 31,
2009 and Note 11 to our Financial Statements reported in our Form 10-K for our fiscal year
ended December 31, 2010 for details as to the assumptions used to determine the fair value of
the stock awards and stock options. See also our discussion of stock-based compensation under
Managements Discussion and Analysis of Financial Condition and Results of
OperationsCritical Accounting Policies and Estimates.(3)
    
    These amounts represent the aggregate grant date fair value for option awards for fiscal
years 2009 and 2010, respectively, computed in accordance with FASB ASC Topic 718. The grant
date fair value of performance awards is determined based on the probable outcome of such
performance conditions as of the grant date. A discussion of the assumptions used in
determining grant date fair value may be found in Note 11 to our Financial Statements,
included in our Annual Report on Form 10-K for the year ended December 31, 2010.  137




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##### Table of Contents



4)
    
    Consists of the following for all executive officers: Payments for private medical and health
insurance, life insurance and permanent health insurance; matching contributions made under
the Companys UK Group Personal Pension Plan and the U.S. 401(k) Plan.5)
    
    Mr. McBarrons compensation was translated from British pound sterling to the U.S. dollar
using the exchange rate of $1.59280 as of December 31, 2009 and $1.54679 as of December 31,
2010. Narrative Disclosure to Summary Compensation Table
   
    
    the executives scope of responsibilities;
 
    
    an informed market assessment of competitive practices for similar
roles within peer group companies;
 
    
    evaluations of performance for the year, as assessed by the Chief
Executive Officer, supported by the Companys performance review process and the
executives self assessment; and
 
    
    recommendations by our Chief Executive Officer for each named executive
officer with respect to base salary, cash bonus, and stock-based compensation.
    138




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##### Table of Contents



Outstanding Equity Awards At Fiscal Year-End
  Option Awards
    
    
    Stock AwardsNumber of
    
    
    Number ofSecurities
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    Number ofUnderlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    Market Value ofUnexercised
    
    
    Unexercised
    
    
    Option
    
    
    
    
    
    
    Units of Stock
    
    
    Shares or Units ofOptions
    
    
    Options
    
    
    Exercise
    
    
    Option
    
    
    That Have Not
    
    
    Stock That Have#
    
    
    #
    
    
    Price
    
    
    Expiration
    
    
    Vested
    
    
    Not Vested(1)Name
    
    Exercisable
    
    
    Unexercisable
    
    
    ($)
    
    
    Date
    
    
    #
    
    
    $Spiro Rombotis
    
    
    97,834
    
    
    
    0
    
    
    $
    6.40
    
    
    
    06/13/2016160,000
    
    
    
    0
    (2)
    
    $
    6.95
    
    
    
    12/20/2016150,000
    
    
    
    50,000
    (3)
    
    $
    5.53
    
    
    
    12/06/201729,171
    
    
    
    45,829
    (4)
    
    $
    0.44
    
    
    
    11/18/20180
    
    
    
    75,000
    (5)
    
    $
    1.59
    
    
    
    12/10/202023,954
    (6)
    
    
    35,212
  139




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##### Table of Contents



Option Awards
    
    
    Stock AwardsNumber of
    
    
    Number ofSecurities
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    Number ofUnderlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    Market Value ofUnexercised
    
    
    Unexercised
    
    
    Option
    
    
    
    
    
    
    Units of Stock
    
    
    Shares or Units ofOptions
    
    
    Options
    
    
    Exercise
    
    
    Option
    
    
    That Have Not
    
    
    Stock That Have#
    
    
    #
    
    
    Price
    
    
    Expiration
    
    
    Vested
    
    
    Not Vested(1)Name
    
    Exercisable
    
    
    Unexercisable
    
    
    ($)
    
    
    Date
    
    
    #
    
    
    $Paul McBarron
    
    
    63,680
    
    
    
    0
    
    
    $
    6.40
    
    
    
    06/13/2016100,000
    
    
    
    0
    (7)
    
    $
    6.95
    
    
    
    12/20/201675,000
    
    
    
    25,000
    (8)
    
    $
    5.53
    
    
    
    12/06/2017104,171
    
    
    
    45,829
    (9)
    
    $
    0.44
    
    
    
    11/18/20180
    
    
    
    75,000
    (10)
    
    $
    1.59
    
    
    
    12/10/202023,954
    (11)
    
    
    35,212Judy Chiao
    
    
    48,967
    
    
    
    0
    
    
    $
    6.40
    
    
    
    06/13/201680,000
    
    
    
    0
    (12)
    
    $
    6.95
    
    
    
    12/20/201675,000
    
    
    
    25,000
    (13)
    
    $
    5.53
    
    
    
    12/06/201752,085
    
    
    
    22,915
    (14)
    
    $
    0.44
    
    
    
    11/18/20180
    
    
    
    62,500
    (15)
    
    $
    1.59
    
    
    
    12/10/202011,977
    (16)
    
    
    17,606
 
 (1)
    
    The market value of the shares is determined by multiplying the number of shares by $1.47,
the closing price of our common stock on the NASDAQ Global Market on December 31, 2010, the
last day of our fiscal year.(2)
    
    These options were granted on December 21, 2006, and are exercisable over a four-year period
with one-fourth (1/4) of the options granted vesting on December 21, 2007, the first
anniversary of the grant date, and the balance of the options granted vesting ratably on a
monthly basis over the following 36 months.(3)
    
    These options were granted on December 6, 2007, and are exercisable over a four-year period
with one-fourth (1/4) of the options granted vesting on December 6, 2008, the first
anniversary of the grant date, and the balance of the options granted vesting ratably on a
monthly basis over the following 36 months.(4)
    
    These options were granted on November 18, 2008, and vest over a three-year period, with
one-third (1/3) of the options granted vesting on November 18, 2009, the first anniversary of
the grant date, and the balance of the options granted vesting ratably on a monthly basis over
the following 24 months.(5)
    
    These options were granted on December 10, 2010, and vest over a four-year period, such
options vesting ratably on a monthly basis over 48 months.(6)
    
    The restricted stock units were granted on November 18, 2008, and vest over a four-year
period, with one-fourth (1/4) of the restricted stock units granted vesting on November 18,
2009, the first anniversary of the grant date, and the balance of the restricted stock units
granted vesting ratably on a monthly basis over the following 36 months.(7)
    
    These options were granted on December 21, 2006, and are exercisable over a four-year period
with one-fourth (1/4) of the options granted vesting on December 21, 2007, the first
anniversary of the grant date, and the balance of the options granted vesting ratably on a
monthly basis over the following 36 months.(8)
    
    These options were granted on December 6, 2007, and are exercisable over a four-year period
with one-fourth (1/4) of the options granted vesting on December 6, 2008, the first
anniversary of the grant date, and the balance of the options granted vesting ratably on a
monthly basis over the following 36 months.  140




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(9)
    
    These options were granted on November 18, 2008, and vest over a three-year period, with
one-third (1/3) of the options granted vesting on November 18, 2009, the first anniversary of
the grant date, and the balance of the options granted vesting ratably on a monthly basis over
the following 24 months.(10)
    
    These options were granted on December 10, 2010, and vest over a four-year period, such
options vesting ratably on a monthly basis over 48 months.(11)
    
    These shares of common stock represent restricted stock and are subject to forfeiture; the
restrictions shall lapse over a four-year period, as follows: the restrictions with respect to
one-fourth (1/4) of the restricted stock granted shall lapse on November 18, 2009, the first
anniversary of the grant date, and the restrictions with respect to the balance of the
restricted stock granted shall lapse ratably on a monthly basis over the following 36 months.(12)
    
    These options were granted on December 21, 2006, and are exercisable over a four-year period
with one-fourth (1/4) of the options granted vesting on December 21, 2007, the first
anniversary of the grant date, and the balance of the options granted vesting ratably on a
monthly basis over the following 36 months.(13)
    
    These options were granted on December 6, 2007, and are exercisable over a four-year period
with one-fourth (1/4) of the options granted vesting on December 6, 2008, the first
anniversary of the grant date, and the balance of the options granted vesting ratably on a
monthly basis over the following 36 months.(14)
    
    These options were granted on November 18, 2008, and vest over a three-year period, with
one-third (1/3) of the options granted vesting on November 18, 2009, the first anniversary of
the grant date, and the balance of the options granted vesting ratably on a monthly basis over
the following 24 months.(15)
    
    These options were granted on December 10, 2010, and vest over a four-year period, such
options vesting ratably on a monthly basis over 48 months.(16)
    
    The restricted stock units were granted on November 18, 2008, and vest over a four-year
period, with one-fourth (1/4) of the restricted stock units granted vesting on November 18,
2009, the first anniversary of the grant date, and the balance of the restricted stock units
granted vesting ratably on a monthly basis over the following 36 months. Nonqualified Deferred Compensation
  Potential Payments Upon Termination or Change-in-Control
    141




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Spiro Rombotis, President and Chief Executive Officer
     Paul McBarron, Executive Vice PresidentFinance, Chief Financial Officer, Chief Operating
Officer and Secretary
   142




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Dr. Judy Chiao, Vice President, Clinical Development and Regulatory Affairs
   )
  143




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##### Table of Contents



nolo contendere
  Potential payments to each named executive officer under our Amended and Restated 2006 Equity
Incentive Plan in connection with a termination or a change-in-control of the Company
  Termination
 Termination For Cause
 Terminatio Without Cause
 Death
  144




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##### Table of Contents



Disability
 Change in Control
  
    
    assumed by the successor corporation or a parent or subsidiary of the
successor corporation; or
 
    
    substituted with an equivalent award by the successor corporation or a
parent or subsidiary of the successor corporation.
  
    
    awards consisting of options, SARs and rights to purchase restricted
stock will become fully vested and immediately exercisable, including awards that
would not otherwise have become vested or exercisable; and
 
    
    all other awards will become fully earned and eligible to receive a
payout.
   
    
    a person, partnership, joint venture, corporation or other entity, or
two or more of any of the foregoing acting as a group (or any person within the
meaning of Sections 13(d)(3) and 14(d) of the 1934 Act), other than the Company, a
Subsidiary, or an employee benefit plan (or related trust) of the Company or a
Subsidiary, become(s) the beneficial owner (as defined in Rule 13d-3 under the
1934 Act) of 30% or more of the then-outstanding voting stock of the Company;
 
    
    during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors (together with any new
director whose election by the Board of Directors or whose nomination for election
by the Companys stockholders, was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of such
period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of the
directors then in office;
  145




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##### Table of Contents




    
    all or substantially all of the business of the Company is disposed of
pursuant to a merger, consolidation or other transaction in which the Company is
not the surviving corporation or the Company combines with another Company and is
the surviving corporation (unless the stockholders of the Company immediately
following such merger, consolidation, combination, or other transaction
beneficially own, directly or indirectly, more than 50% of the aggregate voting
stock or other ownership interests of (x) the entity or entities, if any, that
succeed to the business of the Company or (y) the combined company);
 
    
    the Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which the Board of
Directors in office immediately prior to such transaction or event constitutes less
than a majority of the Board of Directors thereafter; or
 
    
    the stockholders of the Company approve a sale of all or substantially
all of the assets of the Company or a liquidation or dissolution of the Company.
 Director Compensation
  Fees Earned or
    
    
    OptionPaid in Cash
    
    
    Awards
    
    
    TotalName
    
    ($)
    
    
    ($)(1)
    
    
    ($)David UPrichard, Ph.D.
    
    
    66,000
    
    
    
    89,500
    (2)
    
    
    155,500Sir John Banham
    
    
    37,000
    
    
    
    44,750
    (3)
    
    
    81,750Nicholas Bacopoulos, Ph.D.
    
    
    29,000
    
    
    
    44,750
    (4)
    
    
    73,750Christopher S. Henney, Ph.D., D.Sc.
    
    
    56,000
    
    
    
    89,500
    (5)
    
    
    145,500Daniel K. Spiegelman
    
    
    43,000
    
    
    
    62,650
    (6)
    
    
    105,650
 
 (1)
    
    These amounts represent the grant date fair value of stock awards granted to each director
in 2010 computed in accordance with FASB ASC Topic 718. The grant date fair value of
performance awards is determined based on the probable outcome of such performance conditions
as of the grant date. A discussion of the assumptions used in determining grant date fair
value may be found in Note 11 to our Financial Statements, included in our Annual Report on
Form 10-K for the year ended 2010, as amended.(2)
    
    Fair value of the options granted on March 29, 2010 was $1.79 per share. 250,000 options
remain outstanding as of December 31, 2010.(3)
    
    Fair value of the options granted on March 29, 2010 was $1.79 per share. 125,000 options
remain outstanding as of December 31, 2010.(4)
    
    Fair value of the options granted on March 29, 2010 was $1.79 per share. 75,000 options
remain outstanding as of December 31, 2010.(5)
    
    Fair value of the options granted on March 29, 2010 was $1.79 per share. 271,000 options
remain outstanding as of December 31, 2010.(6)
    
    Fair value of the options granted on March 29, 2010 was $1.79 per share. 156,500 options
remain outstanding as of December 31, 2010.  146




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##### Table of Contents



Director Compensation Program
    
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters
     147




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##### Table of Contents



Number ofSharesof Common
    
    
    Percentage ofStock
    
    
    CommonBeneficially
    
    
    StockOwned(1)
    
    
    OwnedDirectors and Executive OfficersDr. Nicholas Bacopoulos (2)
    
    
    40,703
    
    
    
    *Sir John Banham(3)
    
    
    131,299
    
    
    
    *Dr. Judy Chiao(4)
    
    
    355,524
    
    
    
    *Dr. Christopher Henney(5)
    
    
    217,071
    
    
    
    *Paul McBarron(6)
    
    
    556,930
    
    
    
    1.19
    %Spiro Rombotis(7)
    
    
    1,042,562
    
    
    
    2.21
    %Daniel K. Spiegelman(8)
    
    
    115,605
    
    
    
    *Dr. David UPrichard(9)
    
    
    214,210
    
    
    
    *Executive officers and directors as a
group
(9 persons)(10)
    
    
    2,673,904
    
    
    
    5.53
    %5% or more stockholdersAustin W. Marxe and David M.
Greenhouse(11)
527 Madison Avenue, Suite 2600, New York, NY 10022
    
    
    9,911,148
    
    
    
    18.91
    %
 
 *
    
    Represents beneficial ownership of less than 1% of the outstanding shares of our common
stock.(1)
    
    Beneficial ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Beneficial ownership also includes
shares of common stock subject to options, warrants and preferred stock currently exercisable or
convertible, or exercisable or convertible within 60 days of March 22, 2011. Except as indicated by
footnote, to our knowledge, all persons named in the table above have sole voting and investment
power with respect to all shares of common stock shown as beneficially owned.(2)
    
    Includes options to purchase 38,203 shares of Common Stock that are exercisable within 60
days of March 22, 2011.(3)
    
    Includes options to purchase 94,452 shares of Common Stock that are exercisable within 60
days of March 22, 2011.(4)
    
    Includes options to purchase 282,356 shares of Common Stock that are exercisable within 60
days of March 22, 2011. Also includes 10,414 restricted stock units.(5)
    
    Includes options to purchase 209,904 shares of Common Stock that are exercisable within 60
days of March 22, 2011.(6)
    
    Includes options to purchase 380,876 shares of Common Stock that are exercisable within 60
days of March 22, 2011.(7)
    
    Includes options to purchase 484,404 shares of Common Stock that are exercisable within 60
days of March 22, 2011. Also includes 20,828 restricted stock units. Of the shares of Common Stock
reported, 1,000 shares are held indirectly by Mr. Rombotis through his IRA account.  148




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##### Table of Contents



(8)
    
    Includes options to purchase 115,605 shares of Common Stock that are exercisable within 60
days of March 22, 2011.(9)
    
    Includes options to purchase 188,904 shares of Common Stock that are exercisable within 60
days of March 22, 2011.(10)
    
    See footnotes (2)-(9). Also includes options to purchase 108,781 shares of Common Stock
held by Robert Sosnowski, our Vice President, Sales & Marketing, which are exercisable within 60
days of March 22, 2011.(11)
    
    Based on a Schedule 13G filed on February 11, 2011 with the SEC by Austin W. Marxe
(Marxe) and David M. Greenhouse (Greenhouse). Marxe and Greenhouse share sole voting and
investment power over 4,106,900 shares of common stock, 2,724,073 warrants to purchase shares of
common stock, 176,200 warrants (not currently exercisable) and options to purchase 2,053,450 units
(each unit consists of one share of common stock and warrant to purchase 0.5 of common stock). This
amount includes 547,600 shares of common stock, 381,965 warrants to purchase shares of common
stock, 26,400 warrants (not currently exercisable) and options to purchase 273,800 units (each unit
consists of one share of common stock and warrant to purchase 0.5 of common stock) owned by Special
Situations Private Equity Fund, L.P., 684,500 shares of common stock, warrants to purchase 342,250
shares of common stock and options to purchase 342,250 units (each unit consists of one share of
common stock and warrant to purchase 0.5 of common stock) are owned by Special Cayman Fund, L.P.,
2,053,400 shares of common stock, 1,459,360 warrants to purchase shares of common stock, 114,000
warrants (not currently exercisable) and options to purchase 1,026,700 units (each unit consists of
one share of common stock and warrant to purchase 0.5 of common stock) owned by Special Situations
Fund III QP, L.P. and 821,400 shares of common stock, 540,498 warrants to purchase shares of common
stock, 35,800 warrants (not currently exercisable) and options to purchase 410,700 units (each unit
consists of one share of common stock and warrant to purchase 0.5 of common stock) owned by Special
Situations Life Sciences Fund, L.P. Marxe and Greenhouse are the controlling principals of AWM
Investment Company, Inc., the general partner of and investment adviser to Special Situations
Cayman Fund, L.P. AWM also serves as the general partner of MGP Advisers Limited Partnership, the
general partner of Special Situations Fund III QP, L.P. Marxe and Greenhouse are members of MG
Advisers L.L.C., the general partner of Special Situations Private Equity Fund, L.P. Marxe and
Greenhouse are also members of LS Advisers L.L.C., the general partner of Special Situations Life
Sciences Fund, L.P. AMW serves as the investment adviser to Special Situations Private Equity Fund,
L.P., Special Situations Fund III QP, L.P. and Special Situations Life Sciences Fund, L.P. Equity Compensation Plan Information
  (a)
    
    
    (b)
    
    
    (c)Number ofsecurities remainingavailable for futureWeighted-average
    
    
    issuance underNo. of securities to
    
    
    exercise price
    
    
    equity compensationbe issued upon exercise
    
    
    of outstanding
    
    
    plans (excludingof outstanding options,
    
    
    options, warrants
    
    
    securities reflected inPlan Category
    
    warrants and rights
    
    
    and rights
    
    
    column (a))Total equity
compensation plans
approved by
security holders (1)
    
    
    3,549,817
    
    
    $
    3.90
    
    
    
    1,363,894Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Consists of our Amended and Restated 2006 Stock Option Plan (the 2006 Plan). The 2006
Plan provides for the grant of incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock, restricted stock units and performance units. The number of
shares available for issuance, as of March 18, 2011, under the 2006 Plan is 5,200,000.  149




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##### Table of Contents



Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accountant Fees and Services
  2009
    
    
    2010Audit fees:(1)
    
    $
    417,237
    
    
    $
    500,272Audit related fees:
    
    
    
    
    
    
    Tax fees: (2)
    
    
    71,127
    
    
    
    31,850All other fees:
    
    
    
    
    
    
    Total
    
    $
    488,364
    
    
    $
    532,122
 
 (1)
    
    Audit fees represent fees of E&Y for the audit of the Companys annual
consolidated financial statements; reviews of the Companys quarterly results of operations and
reports on Form 10-Q; the audit of managements assessment of the effectiveness of the Companys
internal control over financial reporting and the audit of internal control over financial
reporting; and the services that an independent auditor would customarily provide in connection
with subsidiary audits, other regulatory filings, and similar engagements for each fiscal year
shown, such as attest services, consents, and assistance with review of documents filed with the
SEC.(2)
    
    Tax fees represent tax compliance and return preparation and tax planning and
advice. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services of
Independent Auditors.
  Audit
 Audit-Related
 Tax
  150




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Other Fees
    151




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##### Table of Contents



Item 15.
    
    Exhibits and Financial Statement Schedules
 (a)
    
    Documents filed as part of this report are as follows:
 (1)
    
    Financial Statements and Report of Independent Registered Public Accounting Firm(2)
    
    Financial Statement SchedulesNone required.(3)
    
    Exhibits: see below Item 15(b)
 (b)
    
    Exhibits:
 EXHIBITNUMBER
    
    DESCRIPTION1.1
    
    
    Placement Agent Agreement, dated July 23, 2009, by and between the Company and Lazard Capital Markets LLC (previously filed as
Exhibit 1.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on July 24, 2009, and incorporated herein
by reference).1.2
    
    
    Placement Agent Agreement, dated January 11, 2010, by and between the Company and ROTH Capital Partners, LLC (previously filed as
Exhibit 1.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on January 11, 2010, and incorporated
herein by reference).1.3
    
    
    Placement Agent Agreement, dated January 21, 2010, by and between the Company and ROTH Capital Partners, LLC (previously filed as
Exhibit 1.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on January 21, 2010, and incorporated
herein by reference).3.1
    
    
    Amended and Restated Certificate of Incorporation of Xcyte Therapies, Inc. (previously filed as Exhibit 3.1 to the Registrants
Registration Statement on Form S-1, File No. 333-109653, originally filed with the SEC on October 10, 2003, as subsequently
amended, and incorporated herein by reference).3.1.1
    
    
    Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Xcyte Therapies, Inc. (previously filed as
Exhibit 3.3.1 to the Registrants Quarterly Report on Form 10-Q, for the quarterly period ended March 31, 2006, originally filed
with the SEC on May 16, 2006, and incorporated herein by reference).3.2
    
    
    Amended and Restated Bylaws of Cyclacel Pharmaceuticals, Inc.3.3
    
    
    Preferred Stock Certificate of Designations (previously filed as Exhibit 3.2 to the Registrants Current Report on Form 8-K,
originally filed with the SEC on November 5, 2004, and incorporated herein by reference).4.1
    
    
    Specimen of Common Stock Certificate (previously filed as Exhibit 4.1 to Registrants Registration Statement on Form S-1, File No.
333-109653, originally filed with the SEC on October 10, 2003, as subsequently amended, and incorporated herein by reference).
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EXHIBITNUMBER
    
    DESCRIPTION4.2
    
    
    Specimen of Preferred Stock Certificate of Designation (previously filed as Exhibit 3.2 to Registrants Registration Statement on
Form S-1, File No. 333-119585, originally filed with the SEC on October 7, 2004, as subsequently amended, and incorporated herein
by reference).4.3
    
    
    Form of Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as Exhibit 99.3 to the
Registrants Current Report on Form 8-K, originally filed with the SEC on April 28, 2006, and incorporated herein by reference).4.4
    
    
    Form of Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as Exhibit 10.2 to the
Registrants Current Report on Form 8-K, originally filed with the SEC on February 15, 2007, and incorporated herein by reference).4.5
    
    
    Form of Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock, dated December 10, 2007, issued to Kingsbridge
Capital Limited (previously filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on
December 11, 2007, and incorporated herein by reference).4.6
    
    

Form of Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as Exhibit 4.1 the
Registrants Current Report on Form 8-K, originally filed with the SEC on October 4, 2010, and incorporated herein by
reference).4.7
    
    
    Amended and Restated Warrant to purchase Common Stock, dated as of November 24, 2009, issued by the Company to
Kingsbridge Capital Limited. (previously filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K,
originally filed with the SEC on November 25, 2009, and incorporated herein by reference).4.8
    
    
    Form of Series I Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as
Exhibit 4.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on July 24, 2009, and
incorporated herein by reference).4.9
    
    
    Form of Series II Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as
Exhibit 4.2 to the Registrants Current Report on Form 8-K, originally filed with the SEC on July 24, 2009, and
incorporated herein by reference).4.10
    
    
    Form of Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as Exhibit 4.1 to
the Registrants Current Report on Form 8-K, originally filed with the SEC on January 11, 2010, and incorporated
herein by reference).4.11
    
    
    Form of Warrant to purchase shares of Cyclacel Pharmaceuticals, Inc. Common Stock (previously filed as Exhibit 4.1 to
the Registrants Current Report on Form 8-K, originally filed with the SEC on January 21, 2010, and incorporated
herein by reference).10.1
    
    
    Stock Purchase Agreement, dated December 15, 2005, between Xcyte Therapies, Inc., and Cyclacel Group plc (previously
filed as Exhibit 2.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on December 20,
2005, and incorporated herein by reference).10.2
    
    
    Amendment No. 1 to the Stock Purchase Agreement, dated January 13, 2006, between Xcyte Therapies Inc., and Cyclacel
Group plc (previously filed as exhibit 2.1 to the Registrants current report on Form 8-K filed with the Commission on
January 19, 2006, and incorporated herein by reference).10.3
    
    
    Form of Securities Purchase Agreement, dated April 26, 2006 (previously filed as Exhibit 99.2 to the Registrants
Current Report on Form 8-K, originally filed with the SEC on April 28, 2006, and incorporated herein by reference).
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EXHIBITNUMBER
    
    DESCRIPTION10.4
    
    
    Form of Subscription Agreement, dated February 13, 2007, by and between Cyclacel Pharmaceuticals, Inc. and certain
purchasers (previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K, originally filed with the
SEC on February 15, 2007, and incorporated herein by reference).10.5
    
    
    Form of Placement Agent Agreement, dated February 13, 2007, by and among Cyclacel Pharmaceuticals, Inc., Lazard
Capital Markets LLC, Needham & Company, LLC and ThinkEquity Partners LLC (previously filed as Exhibit 10.3 to the
Registrants Current Report on Form 8-K, originally filed with the SEC on February 15, 2007, and incorporated herein
by reference).10.6
    
    
    Asset Purchase Agreement by and among ALIGN Pharmaceuticals, LLC, ALIGN Holdings, LLC and Achilles Acquisition, LLC,
dated October 5, 2007 (previously filed as Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q, for the
quarterly period ended September 30, 2007, originally filed with the SEC on November 7, 2007, and incorporated herein
by reference).10.7
    
    
    Common Stock Purchase Agreement, dated December 10, 2007, by and between Cyclacel Pharmaceuticals, Inc. and
Kingsbridge Capital Limited (previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K,
originally filed with the SEC on December 11, 2007, and incorporated herein by reference).10.8
    
    
    Registration Rights Agreement, dated December 10, 2007, by and between Cyclacel Pharmaceuticals, Inc. and Kingsbridge
Capital Limited (previously filed as Exhibit 4.2 to the Registrants Current Report on Form 8-K, originally filed with
the SEC on December 11, 2007, and incorporated herein by reference).10.9
    
    
    Amended and Restated 2006 Equity Incentive Plan (previously filed as Exhibit 10.1 to the Registrants Current Report
on Form 8-K, originally filed with the SEC on June 19, 2007, and incorporated herein by reference).10.10
    
    
    Employment Agreement by and between Cyclacel Pharmaceuticals, Inc. and Spiro Rombotis, dated as of January 1, 2008
(previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on
March 24, 2008, and incorporated herein by reference).10.11
    
    
    Employment Agreement by and between Cyclacel Pharmaceuticals, Inc. and Paul McBarron, dated as of January 1, 2008
(previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K, originally filed with the SEC on
April 2, 2008, and incorporated herein by reference).10.12
    
    
    Amendment No. 1, dated as of December 31, 2008, to Employment Agreement by and between Cyclacel Pharmaceuticals, Inc.
and Spiro Rombotis, dated as of January 1, 2008 (previously filed as Exhibit 10.1 to the Registrants Quarterly Report
on Form 10-Q, for the quarterly period ended March 31, 2009, originally filed with the SEC on May 15, 2009, and
incorporated herein by reference).10.13
    
    
    Employment Agreement by and between Cyclacel Pharmaceuticals, Inc. and Spiro Rombotis, dated as of January 1, 2011.10.14
    
    
    Employment Agreement by and between Cyclacel Pharmaceuticals, Inc. and Paul McBarron, dated as of January 1, 2011.10.15
    
    
    Form of Change in Control Agreement by and between Cyclacel Pharmaceuticals, Inc. and Dr. Judy Chiao, dated as of
December 10, 2010 (previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K, originally filed
with the SEC on December 14, 2010, and incorporated herein by reference).
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EXHIBITNUMBER
    
    DESCRIPTION10.16
    
    
    Amendment No. 1 to Common Stock Purchase Agreement, dated as of November 24, 2009, by and between the Company and
Kingsbridge Capital Limited (previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K,
originally filed with the SEC on November 25, 2009, and incorporated herein by reference).10.17
    
    
    Form of Subscription Agreement between the Company and certain investors (previously filed as Exhibit 10.1 to the
Registrants Current Report on Form 8-K, originally filed with the SEC on July 24, 2009, and incorporated herein by
reference).10.18
    
    
    Form of Subscription Agreement between the Company and certain investors (previously filed as Exhibit 10.1 to the
Registrants Current Report on Form 8-K, originally filed with the SEC on January 11, 2010, and incorporated herein by
reference).10.19
    
    
    Form of Subscription Agreement between the Company and certain investors (previously filed as Exhibit 10.1 to the
Registrants Current Report on Form 8-K, originally filed with the SEC on January 21, 2010, and incorporated herein by
reference).10.20
    
    
    Purchase Agreement, dated as of October 4, 2010, by and between Cyclacel Pharmaceuticals, Inc. and each Investor named
therein (previously filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K, originally filed with the
SEC on October 5, 2010, and incorporated herein by reference).10.21
    
    
    Form of Registration Rights Agreement by and among the Company and the Investors named therein (previously filed as
Exhibit 10.2 to the Registrants Current Report on Form 8-K, originally filed with the SEC on October 5, 2010, and
incorporated herein by reference).10.22
    
    
    Agreement between the Company and Scottish Enterprise dated March 27, 2006 (previously filed as Exhibit 10.2 to the
Registrants Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2009, originally filed with the
SEC on August 13, 2009, and incorporated herein by reference).10.23
    
    
    Addendum to Agreement between the Company and Scottish Enterprise dated June 22, 2009 (previously filed as Exhibit
10.3 to the Registrants Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2009, originally filed
with the SEC on August 13, 2009, and incorporated herein by reference).21
    *
    
    Subsidiaries of Cyclacel Pharmaceuticals, Inc.23.1
    *
    
    Consent of Independent Registered Public Accounting Firm.31.1
    *
    
    Certificate of Spiro Rombotis, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    *
    
    Certification of Paul McBarron, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    **
    
    Certification of Spiro Rombotis, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States
Code).32.2
    **
    
    Certification of Paul McBarron, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
 
    
    Indicates management compensatory plan, contract or arrangement.*
    
    Filed herewith.**
    
    Furnished herewith.  155




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SIGNATURES
  CYCLACEL PHARMACEUTICALS, INC.Date: March 31, 2011
    
    By:
    
    /s/ Paul McBarron

Paul McBarronChief Operating Officer &Executive Vice President, Finance
  Signature
    
    Title
    
    Date/s/ Spiro Rombotis
    
    President & Chief Executive Officer
    
    March 31, 2011Spiro Rombotis
    
    (Principal
Executive Officer)
and Director/s/ Paul McBarron
    
    Chief Operating Officer &
    
    March 31, 2011Paul McBarron
    
    Executive
Vice President, Finance
(Principal Financial and Accounting Officer)
and Director/s/ Dr. David UPrichard

Dr. David UPrichard
    
    Chairman
    
    March 31, 2011/s/ Dr. Christopher Henney

Dr. Christopher Henney
    
    Vice Chairman
    
    March 31, 2011/s/ Dr. Nicholas Bacopoulos

Dr. Nicholas Bacopoulos
    
    Director
    
    March 31, 2011/s/ Sir John Banham

Sir John Banham
    
    Director
    
    March 31, 2011/s/ Daniel Spiegelman

Daniel Spiegelman
    
    Director
    
    March 31, 2011