##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 Commission File Number: 001-33054
 TRUBION PHARMACEUTICALS, INC.
 (Exact name of registrant as specified in its charter)
 DELAWARE
(State or other jurisdiction of incorporation or
organization)
    
    52-2385898
(IRS Employer Identification No.)2401 FOURTH AVENUE, SUITE 1050
SEATTLE, WASHINGTON
(Address of registrants principal executive offices)
    
    98121
(Zip Code)
 (206) 838-0500
(Telephone number, including area code)
 N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 
 þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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##### 



TRUBION PHARMACEUTICALS, INC.
 INDEX
 PAGE NO.PART I. FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Balance Sheets as of March 31, 2010 and December 31, 2009
    
    
    3Statements of Operations for the Three Months Ended March 31, 2010 and 2009
    
    
    4Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009
    
    
    5Notes to Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    11Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4.
    
    Controls and Procedures
    
    
    21PART II. OTHER INFORMATION
    
    
    23Item 1A.
    
    Risk Factors
    
    
    23Item 6.
    
    Exhibits
    
    
    38SIGNATURES
    
    
    39EXHIBIT INDEXEX-10.1EX-31.1EX-31.2EX-32.1
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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 TRUBION PHARMACEUTICALS, INC.
 BALANCE SHEETS(In thousands, except share and par value)
 March 31, 2010
    
    
    December 31, 2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    16,597
    
    
    $
    22,304Investments
    
    
    27,674
    
    
    
    29,037Receivable from collaborations
    
    
    3,721
    
    
    
    3,428Prepaid expenses
    
    
    1,699
    
    
    
    977Total current assets
    
    
    49,691
    
    
    
    55,746Property and equipment, net
    
    
    5,403
    
    
    
    6,129Long-term investments
    
    
    2,008
    
    
    
    3,505Total assets
    
    $
    57,102
    
    
    $
    65,380LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,397
    
    
    $
    379Accrued liabilities
    
    
    3,267
    
    
    
    4,143Accrued compensation
    
    
    1,292
    
    
    
    2,106Current portion of notes payable
    
    
    1,305
    
    
    
    1,286Current portion of deferred rent
    
    
    90
    
    
    
    135Current portion of deferred revenue
    
    
    7,167
    
    
    
    7,167Total current liabilities
    
    
    14,518
    
    
    
    15,216Non-current portion of notes payable
    
    
    6,641
    
    
    
    6,975Non-current portion of deferred revenue
    
    
    26,303
    
    
    
    28,095Commitments and contingenciesStockholders equity :Preferred stock, $0.001 par value per share;
shares authorized  5,000,000 at March 31,
2010 and December 31, 2009; issued and
outstanding  none at March 31, 2010 and
December 31, 2009
    
    
    
    
    
    
    Common stock, $0.001 par value per share;
shares authorized  150,000,000 at March
31, 2010 and December 31, 2009; issued and
outstanding  20,407,573 at March 31, 2010
and 20,381,561 at December 31, 2009
    
    
    20
    
    
    
    20Additional paid-in capital
    
    
    137,393
    
    
    
    136,732Accumulated other comprehensive income (loss)
    
    
    8
    
    
    
    (6
    )Accumulated deficit
    
    
    (127,781
    )
    
    
    (121,652
    )Total stockholders equity
    
    
    9,640
    
    
    
    15,094Total liabilities and stockholders equity
    
    $
    57,102
    
    
    $
    65,380
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TRUBION PHARMACEUTICALS, INC.
 
 STATEMENTS OF OPERATIONS(In thousands, except per share data)
(unaudited)
 Three Months EndedMarch 31,2010
    
    
    2009Revenue:Collaboration revenue
    
    $
    5,512
    
    
    $
    4,212Operating expenses:Research and development
    
    
    9,016
    
    
    
    12,079General and administrative
    
    
    2,521
    
    
    
    3,110Total operating expenses
    
    
    11,537
    
    
    
    15,189Loss from operations
    
    
    (6,025
    )
    
    
    (10,977
    )Interest income
    
    
    15
    
    
    
    118Interest expense
    
    
    (119
    )
    
    
    (140
    )Net loss
    
    $
    (6,129
    )
    
    $
    (10,999
    )Basic and diluted net loss per share
    
    $
    (0.30
    )
    
    $
    (0.61
    )Shares used in computation of basic and diluted net loss per share
    
    
    20,387
    
    
    
    17,899
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TRUBION PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS(In thousands)
(unaudited)
 Three Months EndedMarch 31,2010
    
    
    2009Operating activities:Net loss
    
    $
    (6,129
    )
    
    $
    (10,999
    )Adjustments to reconcile net loss to net cash used in operating activities:Stock-based compensation expense
    
    
    651
    
    
    
    1,351Net amortization of discount on investments
    
    
    (1
    )
    
    
    (44
    )Depreciation and amortization expense
    
    
    733
    
    
    
    795Changes in operating assets and liabilities:Receivable from collaborations
    
    
    (293
    )
    
    
    90Prepaid expenses and other assets
    
    
    (722
    )
    
    
    1,197Accounts payable
    
    
    1,018
    
    
    
    451Accrued liabilities and compensation
    
    
    (1,690
    )
    
    
    (92
    )Deferred revenue
    
    
    (1,792
    )
    
    
    (1,219
    )Deferred rent
    
    
    (45
    )
    
    
    (45
    )Net cash used in operating activities
    
    
    (8,270
    )
    
    
    (8,515
    )Investing activities:Purchases of property and equipment
    
    
    (4
    )
    
    
    (37
    )Purchases of investments
    
    
    (7,973
    )
    
    
    (11,926
    )Maturities of investments
    
    
    10,848
    
    
    
    15,476Net cash provided by investing activities
    
    
    2,871
    
    
    
    3,513Financing activities:Payments on notes payable
    
    
    (318
    )
    
    
    (345
    )Proceeds from exercise of stock options
    
    
    10
    
    
    
    22Net cash used in financing activities
    
    
    (308
    )
    
    
    (323
    )Net decrease in cash and cash equivalents
    
    
    (5,707
    )
    
    
    (5,325
    )Cash and cash equivalents at beginning of period
    
    
    22,304
    
    
    
    29,969Cash and cash equivalents at end of period
    
    $
    16,597
    
    
    $
    24,644Supplemental disclosure information:Cash paid for interest
    
    $
    118
    
    
    $
    137
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TRUBION PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
 1. Summary of Significant Accounting Policies
 Basis of Presentation
   Use of Estimates
  Recent Accounting Pronouncements
   2. Fair Value Measurements
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Level 1 
    
    Observable inputs for identical assets or liabilities such as
quoted prices in active markets;Level 2 
    
    Inputs other than quoted prices in active markets that are either
directly or indirectly observable; andLevel 3 
    
    Unobservable inputs in which little or no market data exists,
which are therefore developed by us using estimates and assumptions that reflect
those that a market participant would use.
  March 31, 2010
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMoney market funds
    
    $
    17,003
    
    
    $
    
    
    
    $
    
    
    
    $
    17,003Government and agency debt securities
    
    
    
    
    
    
    29,682
    
    
    
    
    
    
    
    29,682Total
    
    $
    17,003
    
    
    $
    29,682
    
    
    $
    
    
    
    $
    46,685
 December 31, 2009
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMoney market funds
    
    $
    22,259
    
    
    $
    
    
    
    $
    
    
    
    $
    22,259Government and agency debt securities
    
    
    
    
    
    
    32,542
    
    
    
    
    
    
    
    32,542Total
    
    $
    22,259
    
    
    $
    32,542
    
    
    $
    
    
    
    $
    54,801
    Gross Unrealized
    
    
    Gross Unrealized
    
    
    Estimated FairMarch 31, 2010
    
    Amortized Cost
    
    
    Gains
    
    
    Losses
    
    
    Market ValueMoney market funds
    
    $
    17,003
    
    
    $
    
    
    
    $
    
    
    
    $
    17,003Government and agency debt securities
    
    
    29,675
    
    
    
    8
    
    
    
    (1
    )
    
    
    29,682Total
    
    
    46,678
    
    
    
    8
    
    
    
    (1
    )
    
    
    46,685Less: cash equivalents
    
    
    (17,003
    )
    
    
    
    
    
    
    
    
    
    
    (17,003
    )Amounts classified as investments
    
    $
    29,675
    
    
    $
    8
    
    
    $
    (1
    )
    
    $
    29,682
 Gross Unrealized
    
    
    Gross Unrealized
    
    
    Estimated FairDecember 31, 2009
    
    Amortized Cost
    
    
    Gains
    
    
    Losses
    
    
    Market ValueMoney market funds
    
    $
    22,259
    
    
    $
    
    
    
    $
    
    
    
    $
    22,259Government and agency debt securities
    
    
    32,549
    
    
    
    6
    
    
    
    (13
    )
    
    
    32,542Total
    
    
    54,808
    
    
    
    6
    
    
    
    (13
    )
    
    
    54,801Less: cash equivalents
    
    
    (22,259
    )
    
    
    
    
    
    
    
    
    
    
    (22,259
    )Amounts classified as investments
    
    $
    32,549
    
    
    $
    6
    
    
    $
    (13
    )
    
    $
    32,542
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As of March 31, 2010
    
    
    As of December 31, 2009Estimated Fair
    
    
    
    
    
    
    Estimated FairMarket Value
    
    
    Amortized Cost
    
    
    Market Value
    
    
    Amortized CostDue in one year or less
    
    $
    27,674
    
    
    $
    27,667
    
    
    $
    29,037
    
    
    $
    29,033Due after one year
    
    
    2,008
    
    
    
    2,008
    
    
    
    3,505
    
    
    
    3,516Total
    
    $
    29,682
    
    
    $
    29,675
    
    
    $
    32,542
    
    
    $
    32,549
  Less Than 12 MonthsGrossFair
    
    UnrealizedValue
    
    LossesGovernment and agency debt securities
    
    $
    7,238
    
    
    $
    (1
    )
  3. Net Loss Per Share
  4. Collaboration Agreements
 Facet Biotech Corporation
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Pfizer Inc.
  9




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5. Termination Benefits
  10




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6. Comprehensive Income (Loss)
  Three months endedMarch 31,2010
    
    
    2009Net loss
    
    $
    (6,129
    )
    
    $
    (10,999
    )Net unrealized gains (losses) on securities available-for-sale
    
    
    14
    
    
    
    (79
    )Comprehensive loss
    
    $
    (6,115
    )
    
    $
    (11,078
    )
 7. Commitments
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 This quarterly report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, which are subject to the safe harbor created by those sections.
Forward-looking statements are based on our managements beliefs and assumptions and on information
currently available to them. In some cases you can identify forward-looking statements by terms
such as may, will, should, could, would, expect, plans, anticipates, believes,
estimates, projects, predicts, and potential, and similar expressions intended to identify
forward-looking statements. Examples of these statements include, but are not limited to,
statements regarding: the implications of interim or final results of our clinical trials, the
progress of our research programs, including clinical testing, the extent to which our issued and
pending patents may protect our products and technology, the potential of product candidates to
lead to the development of commercial products, our anticipated timing for initiation or completion
of our clinical trials for any of our product candidates, our future operating expenses, our future
losses, our future expenditures for research and development, and the sufficiency of our cash
resources. Our actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us and described in Part
II, Item 1A of this quarterly report on Form 10-Q and our other filings with the Securities and
Exchange Commission, or SEC. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this quarterly report on Form 10-Q . You should read
this quarterly report on Form 10-Q completely and with the understanding that our actual future
results may be materially different from what we expect. Except as required by law, we assume no
obligation to update these forward-looking statements, whether as a result of new information,
future events, or otherwise.
 The following discussion and analysis should be read in conjunction with the unaudited
financial statements and notes thereto included in Part I, Item 1 of this quarterly report on Form
10-Q.
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Overview
   Product Candidates and Recent Developments
      Collaborations
 Facet Biotech Corporation
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Pfizer Inc.
  13




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14




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Outlook
   Critical Accounting Policies and Significant Judgments and Estimates
   Revenue Recognition
  Up-Front Fees and License Fee.
 15




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Collaborative Research Funding. Milestones.
 Preclinical Study, Clinical Trial and Manufacturing Accruals
  
    
    contract research organizations in connection with preclinical studies;
    
    clinical research organizations and other clinical sites in connection with clinical
trials; and
    
    contract manufacturers in connection with the production of components and drug
materials for preclinical studies and clinical trials.
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Stock-Based Compensation
   Three months ended
    
    Three months endedMarch 31, 2010
    
    March 31, 2009Risk-free interest rate
    
    
    2.77
    %
    
    
    2.13
    %Weighted-average expected life (in years)
    
    
    6.02
    
    
    
    6.02Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected volatility rate
    
    
    102
    %
    
    
    88
    %Weighted-average estimated fair value of employee options
    
    $
    3.08
    
    
    $
    0.98
   Valuation of Investments
  Recent Accounting Pronouncements
  17




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Results of Operations for the Three Months Ended March 31, 2010 and 2009
 Revenue
  Three months endedMarch 31,2010
    
    
    2009Pfizer
    
    $
    3,774
    
    
    $
    4,212Facet
    
    
    1,738
    
    
    
    Total revenue
    
    $
    5,512
    
    
    $
    4,212
   Research and Development Expenses
  18




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Three months endedMarch 31,2010
    
    
    2009Research and preclinical programs
    
    $
    5,110
    
    
    $
    5,776Clinical development programs:TRU-015
    
    
    1,659
    
    
    
    1,822TRU-016
    
    
    1,854
    
    
    
    4,043Indirect
    
    
    393
    
    
    
    438Total clinical development programs
    
    
    3,906
    
    
    
    6,303Total research and development
    
    $
    9,016
    
    
    $
    12,079
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General and Administrative Expenses
  Net Interest Income (Expense)
  Liquidity and Capital Resources
  Operating Activities.
 Investing Activities.
 Financing Activities.
   20




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
    
    the ability to raise capital through strategic partnerships or in the
debt/equity markets;
    
    the terms and timing of any additional collaborative or licensing agreements that we may
establish;
    
    milestone payments projected to be received under the Pfizer and Facet
collaboration agreements;
    
    the determination by any of our current collaboration partners to cease
developing any product candidate that is the subject of that collaboration;
    
    the scope, rate of progress, results and costs of our preclinical testing, clinical
trials, and other research and development activities;
    
    the number of programs we pursue;
    
    the cost of establishing clinical and commercial supplies of our product candidates;
    
    the cost of preparing, filing, prosecuting, defending, and enforcing any patent claims
and other intellectual property rights;
    
    the cost, timing, and outcomes of regulatory approvals; and
    
    the extent to which we acquire or invest in businesses, products, or technologies.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of disclosure controls and procedures.
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Changes in internal control over financial reporting.
 22




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PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
  Risks Related to Our Business
 Our success depends on the success of our clinical product candidates, TRU-015, TRU-016 and
SBI-087, and we cannot be certain that they will be safe or effective, complete clinical trials,
receive regulatory approval or be successfully commercialized.
     If we fail to obtain the capital necessary to fund our operations, we may be unable to develop
our product candidates and we could be forced to share our rights to these product candidates
with third parties on terms that may not be favorable to us.
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We have incurred operating losses in each year since our inception and expect to continue to
incur substantial and increasing losses for the foreseeable future.
  We depend on our collaborative relationship with Pfizer to develop, manufacture, and
commercialize TRU-015, SBI-087 and other selected product candidates.
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We depend on our collaborative relationship with Facet to develop, manufacture and commercialize
TRU-016 and other CD37-directed protein therapeutics.
      We currently rely on third-party manufacturers to supply our product candidates for clinical
trials and will rely on third-party manufacturers to manufacture our product candidates in
commercial quantities, which could delay, prevent or increase the costs associated with the
clinical development and future commercialization of our product candidates.
  25




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We rely on third parties to conduct our clinical trials. If these third parties do not perform as
contractually required or otherwise expected, we may not be able to obtain regulatory approval
for or commercialize our product candidates.
  Any failure or delay in commencing or completing clinical trials for product candidates could
severely harm our business.
  26




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
    
    having the capital resources available to fund additional clinical trials;
    
    our or our collaborators ability to obtain regulatory approval to commence a
clinical trial;
    
    our or our collaborators ability to manufacture or obtain from third parties materials
sufficient for use in preclinical studies and clinical trials;
    
    delays in patient enrollment and variability in the number and types of patients
available for clinical trials;
    
    poor effectiveness of product candidates during clinical trials;
    
    unforeseen safety issues or side effects;
    
    governmental or regulatory delays related to clinical trials, including trial design,
results, and materials supply;
    
    changes in regulatory requirements, policy, and guidelines; and
    
    varying interpretation of data by us, any or all of our collaborators, the FDA, and
similar foreign regulatory agencies.
  Our success depends on the proper management of our current and future business operations, and
the expenses associated with them.
   We rely on highly skilled personnel, and if we are unable to retain or motivate key personnel or
hire qualified personnel, we may not be able to maintain our operations.
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We cannot assure you any of our product candidates will be safe or effective, or receive
regulatory approval.
  If we enter into additional strategic partnerships we may be required to relinquish important
rights to and control over the development of our product candidates or otherwise be subject to
terms unfavorable to us.
  
    
    we may not be able to control the amount and timing of resources that our strategic
partners devote to the development or commercialization of product candidates;
    
    strategic partners may delay clinical trials, design clinical trials in a manner with
which we do not agree, provide insufficient funding, terminate a clinical trial or abandon a
product candidate, repeat or conduct new clinical trials, or require a new version of a
product candidate for clinical testing;
    
    strategic partners may not pursue further development and commercialization of products
resulting from the strategic partnering arrangement or may elect to discontinue research and
development programs;
    
    strategic partners may not commit adequate resources to the marketing and distribution of
any future products, limiting our potential revenues from these products;
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
    
    disputes may arise between us and our strategic partners that result in the delay or
termination of the research, development, or commercialization of our product candidates or
that result in costly litigation or arbitration that diverts managements attention and
consumes resources;
    
    strategic partners may experience financial difficulties;
    
    strategic partners may not properly maintain or defend our intellectual property rights
or may use our proprietary information in a manner that could jeopardize or invalidate our
proprietary information or expose us to potential litigation;
    
    business combinations or significant changes in a strategic partners business strategy
may also adversely affect a strategic partners willingness or ability to complete its
obligations under any arrangement;
    
    strategic partners could independently move forward with a competing product candidate
developed either independently or in collaboration with others, including our competitors;
and
    
    strategic partners could terminate the arrangement or allow it to expire, which would
delay the development and may increase the cost of developing our product candidates.
  If our technology or our product candidates conflict with the rights of others we may not be able
to manufacture or market our product candidates, which could have a material adverse effect on
us.
   29




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If we are unable to obtain, maintain and enforce our proprietary rights, we may not be able to
compete effectively or operate profitably.
  
    
    obtain and maintain patent and other proprietary protection for our technology,
processes, and product candidates;
    
    enforce patents once issued and defend those patents if their enforceability is
challenged;
    
    preserve trade secrets; and
    
    operate without infringing the patents and proprietary rights of third parties.
  
    
    we might not have been the first to make the inventions claimed in our patents, if
issued, or disclosed in our pending patent applications;
    
    we might not have been the first to file patent applications for these inventions;
    
    others may independently develop similar or alternative technologies or duplicate any of
our technologies;
    
    it is possible that none of our pending patent applications will result in issued patents
or, if issued, these patents may not be sufficient to protect our technology or provide us
with a basis for commercially viable products, and may not provide us with any competitive
advantages;
    
    if our pending applications issue as patents, they may be challenged by third parties as
not infringed, invalid, or unenforceable under U.S. or foreign laws;
    
    if issued, the patents under which we hold rights may be invalid or not enforceable; or
    
    we may develop additional proprietary technologies that are not patentable and that may
not be adequately protected through trade secrets, if, for example, a competitor were to
independently develop duplicative, similar, or alternative technologies.
  30




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We may incur substantial costs as a result of litigation or other proceedings relating to patent
and other intellectual property rights.
  We face substantial competition, which may result in others discovering, developing, or
commercializing products before, or more successfully than, we do.
 31




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Product Candidates for Autoimmune and Inflammatory Diseases. ® ® ® ® ® ® ® ®
 Product Candidates for B-cell Malignancies. ® ® ® ® ®
  
    
    design and develop products that are superior to other products in the market;
    
    attract and retain qualified scientific, medical, product development, commercial, and
sales and marketing personnel;
    
    obtain patent and/or other proprietary protection for our processes, product candidates,
and technologies;
    
    operate without infringing the patents and proprietary rights of third parties;
    
    obtain required regulatory approvals; and
    
    successfully collaborate with others in the design, development, and commercialization of
new products.
  We may fail to select or capitalize on the most scientifically, clinically, or commercially
promising or profitable product candidates.
  Even if our product candidates receive regulatory approval, they could be subject to restrictions
or withdrawal from the market and we may be subject to penalties if we fail to comply with
regulatory requirements or if we experience unanticipated problems with our products.
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
    
    restrictions on the products or manufacturing processes;
    
    withdrawal of the products from the market;
    
    voluntary or mandatory recalls;
    
    fines;
    
    suspension of regulatory approvals;
    
    product seizures; or
    
    injunctions or the imposition of civil or criminal penalties.
  Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing
our products internationally.
  Our product candidates may never achieve market acceptance even if we obtain regulatory
approvals.
  
    
    our ability to provide acceptable evidence of safety and efficacy;
    
    the prevalence and severity of adverse side effects;
    
    availability, relative cost, and relative efficacy of alternative and competing
treatments;
    
    the effectiveness of our marketing and distribution strategy;
    
    publicity concerning our products or competing products and treatments; and
    
    our ability to obtain sufficient third-party insurance coverage or reimbursement.
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If we are unable to establish a sales and marketing infrastructure or enter into collaborations
with partners to perform these functions, we will not be able to commercialize our product
candidates.
  
    
    our inability to recruit and retain adequate numbers of effective sales and marketing
personnel;
    
    the inability of sales personnel to obtain access to or persuade adequate numbers of
physicians to prescribe our products;
    
    the lack of complementary products to be offered by sales personnel, which may put us at
a competitive disadvantage relative to companies with more extensive product lines; and
    
    unforeseen costs and expenses associated with creating a sales and marketing
organization.
  If any products we develop become subject to unfavorable pricing regulations, third-party
reimbursement practices or healthcare reform initiatives, our business could be harmed.
  We face potential product liability exposure, and if successful claims are brought against us, we
may incur substantial liability for a product candidate and may have to limit its
commercialization.
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
    
    decreased demand for our product candidates;
    
    impairment of our business reputation;
    
    withdrawal of clinical trial participants;
    
    costs of related litigation;
    
    substantial monetary awards to patients or other claimants;
    
    loss of revenues; and
    
    the inability to commercialize our product candidates.
  If we use biological and hazardous materials in a manner that causes contamination or injury or
violates laws, we may be liable for damages.
  Risks Related to Our Common Stock
 The trading price of our common stock may be subject to significant fluctuations and volatility,
and our stockholders may be unable to resell their shares at a profit.
  
    
    low trading volumes;
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
    
    our ability to develop and market new and enhanced product candidates on a timely basis;
    
    announcements by us or our collaborators or competitors of new commercial products,
clinical progress or the lack thereof, changes in or terminations of relationships,
significant contracts, commercial relationships, or capital commitments;
    
    commencement of, or our involvement in, litigation;
    
    changes in earnings estimates or recommendations by securities analysts;
    
    changes in governmental regulations or in the status of our regulatory approvals;
    
    any major change in our board or management;
    
    quarterly variations in our operating results or those of our collaborators or
competitors;
    
    general economic conditions and slow or negative growth of our markets; and
    
    political instability, natural disasters, war, and/or events of terrorism.
  If securities analysts do not publish research or reports about our business, or if they
downgrade our stock, the price of our stock could decline.
  The concentration of our capital stock ownership with insiders will likely limit your ability to
influence corporate matters.
  Anti-takeover provisions in our charter documents and under Delaware law could make an
acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent
attempts by our stockholders to replace or remove our current management.
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We are exposed to potential risks from legislation requiring companies to evaluate controls under
Section 404 of the Sarbanes-Oxley Act.
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ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation (Exhibit 3.1)(A)3.2
    
    Amended and Restated Bylaws (Exhibit 3.1)(B)4.1
    
    Form of common stock certificate (Exhibit 4.1)(C)4.2
    
    Amended and Restated Investor Rights Agreement, dated July 13, 2004 (Exhibit 4.2)(A)4.3
    
    Amendment No. 1 to Amended and Restated Investor Rights Agreement, dated December 19, 2005 (Exhibit 4.3)(A)10.1*
    
    Third Amendment, dated January 31, 2010, to the Manufacturing Services Agreement dated November 21, 2005
between the registrant and Lonza Sales AG31.1*
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C § 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 (A)
    
    Incorporated by reference to the designated exhibit to the registrants Registration
Statement on Form S-1 filed with the SEC on June 2, 2006 (File No. 333-134709).(B)
    
    Incorporated by reference to the designated exhibit to the registrants Current Report on
Form 8-K filed with the SEC on November 26, 2008 (File No. 001-33054).(C)
    
    Incorporated by reference to the designated exhibit to the registrants Registration
Statement on Form S-1 filed with the SEC on October 2, 2006 (File No. 333-134709).*
    
    Filed herewith.
    
    Portions of this exhibit have been omitted based on an application for confidential treatment
from the SEC. The omitted portions of these exhibits have been filed separately with the SEC. 38




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SIGNATURES
   TRUBION PHARMACEUTICALS, INC.By:
    /s/ John A. BencichJohn A. BencichVice President and
Chief Financial Officer(Principal Accounting and Financial Officer and Authorized Officer) 39