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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 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, 2008
 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: 0-24274
 LA JOLLA PHARMACEUTICAL COMPANY
  Delaware
    
    33-0361285(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification Number)
 6455 Nancy Ridge Drive, San Diego, CA 92121
 (858) 452-6600
  Title of each class:
    
    Name of each exchange on which registered:Common Stock, par value $0.01 per share
    
    The Nasdaq Global Market
  None
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(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
    
    
    1Item 1A. Risk Factors
    
    
    9Item 1B. Unresolved Staff Comments
    
    
    12Item 2. Properties
    
    
    12Item 3. Legal Proceedings
    
    
    12Item 4. Submission of Matters to a Vote of Security Holders
    
    
    13PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    14Item 6. Selected Financial Data
    
    
    16Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 8. Financial Statements and Supplementary Data
    
    
    25Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    25Item 9A. Controls and Procedures
    
    
    26Item 9B. Other Information
    
    
    28PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    28Item 11. Executive Compensation
    
    
    28Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    28Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    28Item 14. Principal Accountant Fees and Services
    
    
    28PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    29Signatures
    
    
    30EX-10.57EX-10.58EX-10.59EX-10.60EX-10.61EX-10.62EX-10.63EX-10.64EX-10.65EX-23.1EX-31.1EX-31.2EX-32.1




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PART I
  
 Item 1. Business
 Overview
  Development Agreement BioMarin CF BioMarin Pharma
     
    
    Sell or out-license our remaining assets, including our SSAO
compounds, although we do not expect to receive any
substantive value for them;
    
    Pursue potential other strategic transactions, which could include mergers, license
agreements or other collaborations, with third parties; or
 1




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
    
    Implement an orderly wind down of the Company if other alternatives are not deemed
viable and in the best interests of the Company.
  2




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About Lupus
    3




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Riquent Clinical Trial History
 Early clinical studies:
   Previous Phase 3 trial
  NDA
 4




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Phase 3 ASPEN trial
 SPA
  Inflammatory Program
 SSAO Inflammation Program
     Manufacturing
  5




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Patents and Proprietary Technologies
  
    
    Lupus Toleragens  eight issued United States patents, three issued Australian
patents, one granted Portuguese patent, two granted Norwegian patents, one granted European
patent (which has been unbundled as 13 European national patents), a second granted European
patent (which has been unbundled as 15 European national patents), two granted Chinese
patents, one granted Hong Kong patent, one granted South Korean patent, two granted Canadian
patents, two granted Finnish patents, one granted Irish patent, and one granted Japanese
patent (expiring between 2010 and 2020); and
    
    Tolerance Technology  five issued United States patents, one issued Australian
patent, one granted European patent (which has been unbundled as 15 European national
patents), one granted Japanese patent, two granted Canadian patents, one granted South Korean
patent and one granted Irish patent (expiring between 2011 and 2012).
 Competition
   6




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Government Regulation
 United States
  BLA
  IRB EC
   7




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Foreign
  MAA EMEA
 CHMP
  8




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Employees
  Available Information
  
 Item 1A. Risk Factors
 I. RISK FACTORS RELATING TO LA JOLLA PHARMACEUTICAL COMPANY AND THE INDUSTRY IN WHICH WE OPERATE.
 In light of our decision to discontinue development of our Riquent clinical program, we are seeking
to maximize the value of our remaining assets, address our liabilities and attempt to pursue
mergers or similar strategic transactions.  We may be unable to satisfy our liabilities and can
provide no assurances that we can be successful in pursuing a strategic transaction.
    We may need to liquidate the Company in a voluntary dissolution under Delaware law or seek
protection under the provisions of the U.S. Bankruptcy Code, and in
either event, it is unlikely that
stockholders would receive any value for their shares.
  9




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We recorded an impairment loss for the year ended December 31, 2008 and may need to record
additional charges in the future.
 Accounting for the Impairment or
Disposal of Long-Lived Assets
 We face environmental liabilities related to certain hazardous materials used in our operations.
  10




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##### Table of Contents



II. RISK FACTORS RELATED SPECIFICALLY TO OUR STOCK.
 The price of our common stock has been volatile and has declined significantly and we may face
delisting from Nasdaq.
   Our common stock price is volatile and may continue to decline.
  
    
    limited financial resources;
    
    announcements regarding mergers or other strategic transactions;
    
    future sales of significant amounts of our common stock by us or our
stockholders;
    
    actions or decisions by the FDA and other comparable agencies;
    
    announcements of technological innovations or new therapeutic products by us or
others;
    
    developments in patent or other proprietary rights;
    
    public concern as to the safety of drugs discovered or developed by us or others;
    
    developments concerning potential and existing agreements with collaborators;
    
    general market conditions and comments by securities analysts; and
 11




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
    
    government regulation, including any legislation that may impact the price of any
commercial products that we may seek to sell.
  Failure to achieve and maintain effective internal control over financial reporting in accordance
with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and
stock price.
  Anti-takeover devices may prevent changes in our board of directors and management.
   
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
  
 Item 3. Legal Proceedings.
  12




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Item 4. Submission of Matters to a Vote of Security Holders.
  13




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PART II
 
 Item 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
 Information About Our Common Stock
  PricesHigh
    
    LowYear Ended December 31, 2008First Quarter
    
    $
    4.25
    
    
    $
    1.45Second Quarter
    
    
    2.35
    
    
    
    1.59Third Quarter
    
    
    2.50
    
    
    
    1.01Fourth Quarter
    
    
    1.20
    
    
    
    0.58Year Ended December 31, 2007First Quarter
    
    $
    8.57
    
    
    $
    2.80Second Quarter
    
    
    8.68
    
    
    
    4.35Third Quarter
    
    
    5.59
    
    
    
    3.15Fourth Quarter
    
    
    4.50
    
    
    
    3.15
  Information About Our Equity Compensation Plans
  14




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Stock Performance Graph
  
 12/31/2003
    
    
    
    
    12/31/2004
    
    
    
    
    12/31/2005
    
    
    
    
    12/31/2006
    
    
    
    
    12/31/2007
    
    
    
    
    12/31/2008La Jolla Pharmaceutical Company*
    
    
    $
    100
    
    
    
    $
    39.20
    
    
    
    $
    17.37
    
    
    
    $
    14.23
    
    
    
    $
    18.40
    
    
    
    $
    2.72Nasdaq  US
    
    
    $
    100
    
    
    
    $
    108.84
    
    
    
    $
    111.16
    
    
    
    $
    122.11
    
    
    
    $
    132.42
    
    
    
    $
    63.80Nasdaq  Pharmaceuticals
    
    
    $
    100
    
    
    
    $
    106.51
    
    
    
    $
    117.29
    
    
    
    $
    114.81
    
    
    
    $
    120.74
    
    
    
    $
    112.34
 
 *
    
    La Jolla Pharmaceutical Company stock prices have been adjusted to reflect the one-for-five
reverse stock split effective December 21, 2005. 15




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Item 6. Selected Financial Data.
  Years Ended December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands, except per share amounts)Consolidated Statements of Operations Data:Expenses:Research and development
    
    $
    51,025
    
    
    $
    46,635
    
    
    $
    32,834
    
    
    $
    22,598
    
    
    $
    33,169General and administrative
    
    
    9,702
    
    
    
    9,058
    
    
    
    9,287
    
    
    
    5,405
    
    
    
    7,568Asset impairment
    
    
    2,810
    
    
    
    
    
    
    
    104
    
    
    
    
    
    
    
    Loss from operations
    
    
    (63,537
    )
    
    
    (55,693
    )
    
    
    (42,225
    )
    
    
    (28,003
    )
    
    
    (40,737
    )Interest expense
    
    
    (96
    )
    
    
    (82
    )
    
    
    (46
    )
    
    
    (116
    )
    
    
    (190
    )Interest income
    
    
    779
    
    
    
    2,699
    
    
    
    2,826
    
    
    
    756
    
    
    
    383Net loss
    
    $
    (62,854
    )
    
    $
    (53,076
    )
    
    $
    (39,445
    )
    
    $
    (27,363
    )
    
    $
    (40,544
    )Basic and diluted net loss per share
    
    $
    (1.26
    )
    
    $
    (1.40
    )
    
    $
    (1.21
    )
    
    $
    (1.77
    )
    
    $
    (3.40
    )Shares used in computing basic and diluted
net loss per share (1)
    
    
    49,689
    
    
    
    37,818
    
    
    
    32,588
    
    
    
    15,446
    
    
    
    11,941Balance Sheet Data:Working capital
    
    $
    2,996
    
    
    $
    29,881
    
    
    $
    37,673
    
    
    $
    70,124
    
    
    $
    17,539Total assets
    
    $
    20,839
    
    
    $
    44,405
    
    
    $
    49,525
    
    
    $
    80,928
    
    
    $
    33,026Noncurrent portion of obligations under
capital leases and notes payable
    
    $
    213
    
    
    $
    388
    
    
    $
    196
    
    
    $
    142
    
    
    $
    716Stockholders equity
    
    $
    3,390
    
    
    $
    33,521
    
    
    $
    43,089
    
    
    $
    77,130
    
    
    $
    26,001
 
 (1)
    
    Shares have been adjusted to reflect the one-for-five reverse stock split effective December
21, 2005. 16




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Introduction
  
    
    Overview and recent developments. This section provides a general description of our
business and operating history and a general description of recent events and significant
transactions that we believe are important in understanding our financial condition and
results of operations.
    
    Critical accounting policies and estimates. This section contains a discussion of the
accounting policies that we believe are important to our financial condition and results of
operations and that require significant judgment and estimates on the part of management in
their application. In addition, all of our significant accounting policies, including the
critical accounting policies and estimates, are summarized in Note 1 to the accompanying
consolidated financial statements.
    
    Results of operations. This section provides an analysis of our results of operations
presented in the accompanying consolidated statements of operations by comparing the
results for the year ended December 31, 2008 to the results for the year ended December 31,
2007 and comparing the results for the year ended December 31, 2007 to the results for the
year ended December 31, 2006.
    
    Liquidity and capital resources. This section provides an analysis of our cash flows
and a discussion of our outstanding debt and commitments, both firm and contingent, that
existed as of December 31, 2008, as well as material subsequent changes. Included in the
discussion of outstanding debt is a discussion of our financial capacity to fund our future
commitments and a discussion of other financing arrangements.
 Overview and Recent Developments
  Development Agreement BioMarin CF BioMarin Pharma
   17




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
    
    Sell or out-license our remaining assets, including our SSAO
compounds, although we do not expect to receive any significant value
for them;
    
    Pursue potential other strategic transactions,
which could include mergers, license agreements or other collaborations, with third parties; or
    
    Implement an orderly wind down of the Company
if other alternatives are not deemed viable and in the best interests of the Company.
  UBS
 Units
 Critical Accounting Policies and Estimates
  18




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Impairment and useful lives of long-lived assets
    SFAS Accounting
for the Impairment or Disposal of Long-Lived Assets SFAS 144
 Accrued clinical/regulatory expenses
  Share-based compensation
 Share-Based Payment SFAS 123R
 19




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Fair value of financial instruments
 Fair Value Measurements SFAS 157 FASB FSP Effective Date of FASB Statement No. 157
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term
of the assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or
liabilities.
  20




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New Accounting Pronouncements
  The Fair Value Option for
Financial Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115 SFAS 159
 EITF Accounting for Nonrefundable Advance Payments for Goods or
Services to Be Used in Future Research and Development Activities EITF 07-3
 The Hierarchy of Generally Accepted Accounting
Principles SFAS 162 The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles
 Results of Operations
 Years Ended December 31, 2008, 2007 and 2006
 Research and Development Expense
  21




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General and Administrative Expense
   Asset
Impairments.
 Interest Income and Expense
 Net Operating Loss and Research Tax Credit Carryforwards
 22




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Liquidity and Capital Resources
     ARS Rights agreement
 Credit Facility
   23




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Payment due by period (in thousands)Less than
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    1 Year
    
    1-3 Years
    
    3-5 Years
    
    5 YearsCredit facility
    
    $
    5,933
    
    
    $
    5,933
    
    
    $
    
    
    
    $
    
    
    
    $
    Long-term debt obligations
    
    
    373
    
    
    
    177
    
    
    
    196
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    658
    
    
    
    491
    
    
    
    148
    
    
    
    19
    
    
    
    Capital lease obligations
    
    
    55
    
    
    
    15
    
    
    
    40
    
    
    
    
    
    
    
    Purchase obligations
    
    
    1,290
    
    
    
    1,290
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    8,309
    
    
    $
    7,906
    
    
    $
    384
    
    
    $
    19
    
    
    $
    
   
 
 
  24




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Off-Balance Sheet Arrangements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
     
 Item 8. Financial Statements and Supplementary Data.
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  25




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Item 9A. Controls and Procedures.
 (a) Disclosure Controls and Procedures; Changes in Internal Control Over Financial Reporting
 Exchange
Act
  (b) Management Report on Internal Control Over Financial Reporting
  
    
    Pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our assets;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and
    
    Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a material
effect on our financial statements.
     26




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(c) Report of Independent Registered Public Accounting Firm
         
 27




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Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
 SEC
  
 Item 11. Executive Compensation.
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14. Principal Accountant Fees and Services.
  28




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PART IV
 
 Item 15. Exhibits, Financial Statement Schedules.
  1.
    
    The following consolidated financial statements of La Jolla Pharmaceutical Company are filed
as part of this report under Item 8  Financial Statements and Supplementary Data:
 Report of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets at December 31, 2008 and 2007
    
    
    F-2Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006
    
    
    F-3Consolidated Statements of Stockholders Equity for the years ended December 31, 2008, 2007 and 2006
    
    
    F-4Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6
 2.
    
    Financial Statement Schedules.These schedules are omitted because they are not required, or are not applicable, or the
required information is shown in the consolidated financial statements or notes thereto.3.
    
    Exhibits.The exhibit index attached to this report is incorporated by reference herein.
 29




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SIGNATURES
  LA JOLLA PHARMACEUTICAL COMPANYMarch 30, 2009
    By:
    /s/ Deirdre Y. GillespieDeirdre Y. Gillespie, M.D.President, Chief Executive Officer and
Assistant Secretary  Signature
    
    Title
    
    Date/s/ Deirdre Y. Gillespie
    
    President, Chief Executive Officer and AssistantDeirdre Y. Gillespie, M.D
    
    Secretary
(Principal Executive Officer)
    
    March 30, 2009/s/ Niv E. Caviar
    
    Executive Vice President, Chief Business OfficerNiv E. Caviar
    
    and
Chief Financial Officer (Principal Financial
Officer)
    
    March 30, 2009/s/ Gail A. Sloan
    
    Vice President of Finance and Secretary (PrincipalGail A. Sloan
    
    Accounting
Officer)
    
    March 30, 2009/s/ Thomas H. Adams
    
    Director
    
    March 30, 2009Thomas H. Adams, Ph.D./s/ Robert A. Fildes
    
    Director
    
    March 30, 2009Robert A. Fildes, Ph.D./s/ Stephen M. Martin
    
    Director
    
    March 30, 2009Stephen M. Martin/s/ Craig R. Smith
    
    Director
    
    March 30, 2009Craig R. Smith, M.D./s/ Martin Sutter
    
    Director
    
    March 30, 2009Martin Sutter/s/ James N. Topper
    
    Director
    
    March 30, 2009James N. Topper, M.D., Ph.D./s/ Frank E. Young
    
    Director
    
    March 30, 2009Frank E. Young, M.D., Ph.D.
 30




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F-1




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December 31,2008
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    9,447
    
    
    $
    4,373Short-term investments, available-for-sale
    
    
    10,000
    
    
    
    34,986Prepaids and other current assets
    
    
    785
    
    
    
    1,018Total current assets
    
    
    20,232
    
    
    
    40,377Property and equipment, net
    
    
    357
    
    
    
    1,271Patent costs and other assets, net
    
    
    250
    
    
    
    2,757$
    20,839
    
    
    $
    44,405Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    4,626
    
    
    $
    2,203Accrued clinical/regulatory expenses
    
    
    3,957
    
    
    
    6,282Accrued expenses
    
    
    1,008
    
    
    
    664Accrued payroll and related expenses
    
    
    1,549
    
    
    
    1,199Credit facility
    
    
    5,933
    
    
    
    Current portion of obligations under notes payable
    
    
    152
    
    
    
    138Current portion of obligations under capital leases
    
    
    11
    
    
    
    10Total current liabilities
    
    
    17,236
    
    
    
    10,496Non-current portion of obligations under notes payable
    
    
    179
    
    
    
    344Non-current portion of obligations under capital leases
    
    
    34
    
    
    
    44CommitmentsStockholders equity:Preferred stock, $0.01 par value; 8,000,000 shares
authorized, no shares issued or outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value; 225,000,000 shares
authorized, 55,549,528 and 39,629,660 shares issued
and outstanding at December 31, 2008 and 2007,
respectively
    
    
    555
    
    
    
    396Additional paid-in capital
    
    
    418,522
    
    
    
    385,944Other comprehensive income
    
    
    
    
    
    
    14Accumulated deficit
    
    
    (415,687
    )
    
    
    (352,833
    )Total stockholders equity
    
    
    3,390
    
    
    
    33,521$
    20,839
    
    
    $
    44,405
 See accompanying notes.
 F-2




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Years Ended December 31,2008
    
    2007
    
    2006Expenses:Research and development
    
    $
    51,025
    
    
    $
    46,635
    
    
    $
    32,834General and administrative
    
    
    9,702
    
    
    
    9,058
    
    
    
    9,287Asset impairments
    
    
    2,810
    
    
    
    
    
    
    
    104Total expenses
    
    
    63,537
    
    
    
    55,693
    
    
    
    42,225Loss from operations
    
    
    (63,537
    )
    
    
    (55,693
    )
    
    
    (42,225
    )Interest expense
    
    
    (96
    )
    
    
    (82
    )
    
    
    (46
    )Interest income
    
    
    779
    
    
    
    2,699
    
    
    
    2,826Net loss
    
    $
    (62,854
    )
    
    $
    (53,076
    )
    
    $
    (39,445
    )Basic and diluted net loss per share
    
    $
    (1.26
    )
    
    $
    (1.40
    )
    
    $
    (1.21
    )Shares used in computing basic and diluted net loss per share
    
    
    49,689
    
    
    
    37,818
    
    
    
    32,588
 See accompanying notes.
 F-3




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Additional
    
    Other
    
    
    
    
    
    TotalCommon stock
    
    paid-in
    
    comprehensive
    
    Accumulated
    
    stockholdersShares
    
    Amount
    
    capital
    
    income (loss)
    
    deficit
    
    equityBalance at December 31, 2005
    
    
    32,533
    
    
    $
    325
    
    
    $
    337,117
    
    
    $
    
    
    
    $
    (260,312
    )
    
    $
    77,130Issuance of common stock under
Employee Stock Purchase Plan
    
    
    80
    
    
    
    1
    
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    227Exercise of stock options
    
    
    56
    
    
    
    1
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    126Share-based compensation expense
    
    
    24
    
    
    
    
    
    
    
    5,051
    
    
    
    
    
    
    
    
    
    
    
    5,051Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,445
    )
    
    
    (39,445
    )Balance at December 31, 2006
    
    
    32,693
    
    
    
    327
    
    
    
    342,519
    
    
    
    
    
    
    
    (299,757
    )
    
    
    43,089Issuance of common stock, net
    
    
    6,670
    
    
    
    67
    
    
    
    37,845
    
    
    
    
    
    
    
    
    
    
    
    37,912Issuance of common stock under
Employee Stock Purchase Plan
    
    
    97
    
    
    
    1
    
    
    
    260
    
    
    
    
    
    
    
    
    
    
    
    261Exercise of stock options
    
    
    166
    
    
    
    1
    
    
    
    499
    
    
    
    
    
    
    
    
    
    
    
    500Share-based compensation expense
    
    
    4
    
    
    
    
    
    
    
    4,821
    
    
    
    
    
    
    
    
    
    
    
    4,821Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53,076
    )
    
    
    (53,076
    )Net unrealized gains on
available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    14Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53,062
    )Balance at December 31, 2007
    
    
    39,630
    
    
    
    396
    
    
    
    385,944
    
    
    
    14
    
    
    
    (352,833
    )
    
    
    33,521Issuance of common stock, net
    
    
    15,615
    
    
    
    156
    
    
    
    27,877
    
    
    
    
    
    
    
    
    
    
    
    28,033Issuance of common stock under
Employee Stock Purchase Plan
    
    
    304
    
    
    
    3
    
    
    
    287
    
    
    
    
    
    
    
    
    
    
    
    290Exercise of stock options
    
    
    1
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    4,411
    
    
    
    
    
    
    
    
    
    
    
    4,411Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,854
    )
    
    
    (62,854
    )Net unrealized losses on
available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,868
    )Balance at December 31, 2008
    
    
    55,550
    
    
    $
    555
    
    
    $
    418,522
    
    
    $
    
    
    
    $
    (415,687
    )
    
    $
    3,390
 See accompanying notes.
 F-4




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##### Table of Contents



Years Ended December 31,2008
    
    
    2007
    
    
    2006Operating activitiesNet loss
    
    $
    (62,854
    )
    
    $
    (53,076
    )
    
    $
    (39,445
    )Adjustments to reconcile net loss to net cash used for operating activities:Depreciation and amortization
    
    
    990
    
    
    
    1,687
    
    
    
    1,987Loss on write-off/disposal of patents, property and equipment and
licenses
    
    
    243
    
    
    
    934
    
    
    
    316Loss on impairment of patents, property and equipment and licenses
    
    
    2,810
    
    
    
    
    
    
    
    104Share-based compensation expense
    
    
    4,411
    
    
    
    4,821
    
    
    
    5,051Amortization (accretion) of investment premium/discount
    
    
    240
    
    
    
    (227
    )
    
    
    36Changes in operating assets and liabilities:Prepaids and other current assets
    
    
    233
    
    
    
    (14
    )
    
    
    (101
    )Accounts payable
    
    
    2,423
    
    
    
    78
    
    
    
    1,259Accrued clinical/regulatory expenses
    
    
    (2,325
    )
    
    
    4,752
    
    
    
    1,303Accrued expenses
    
    
    344
    
    
    
    (473
    )
    
    
    (147
    )Accrued payroll and related expenses
    
    
    350
    
    
    
    (66
    )
    
    
    487Net cash used for operating activities
    
    
    (53,135
    )
    
    
    (41,584
    )
    
    
    (29,150
    )Investing activitiesPurchases of short-term investments
    
    
    
    
    
    
    (51,415
    )
    
    
    (16,700
    )Sales of short-term investments
    
    
    24,665
    
    
    
    55,750
    
    
    
    44,050Additions to property and equipment
    
    
    (506
    )
    
    
    (354
    )
    
    
    (335
    )Increase in patent costs and other assets
    
    
    (116
    )
    
    
    (628
    )
    
    
    (536
    )Net cash provided by investing activities
    
    
    24,043
    
    
    
    3,353
    
    
    
    26,479Financing activitiesNet proceeds from issuance of common stock
    
    
    28,326
    
    
    
    38,673
    
    
    
    353Proceeds from credit facility
    
    
    6,000
    
    
    
    
    
    
    
    Proceeds from issuance of notes payable
    
    
    
    
    
    
    312
    
    
    
    263Payments on obligations under notes payable
    
    
    (151
    )
    
    
    (209
    )
    
    
    (527
    )Payments on obligations under capital leases
    
    
    (9
    )
    
    
    (1
    )
    
    
    Net cash provided by financing activities
    
    
    34,166
    
    
    
    38,775
    
    
    
    89Increase (decrease) in cash and cash equivalents
    
    
    5,074
    
    
    
    544
    
    
    
    (2,582
    )Cash and cash equivalents at beginning of period
    
    
    4,373
    
    
    
    3,829
    
    
    
    6,411Cash and cash equivalents at end of period
    
    $
    9,447
    
    
    $
    4,373
    
    
    $
    3,829Supplemental disclosure of cash flow information:Interest paid
    
    $
    96
    
    
    $
    82
    
    
    $
    46Supplemental schedule of noncash investing and financing activities:Capital lease obligations incurred for property and equipment
    
    $
    
    
    
    $
    55
    
    
    $
    
 See accompanying notes.
 F-5




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##### Table of Contents



1. Organization and Summary of Significant Accounting Policies
 Organization and Business Activity
  Basis of Presentation
    
    
    Sell or out-license the Companys remaining assets, including the Companys SSAO compounds;
    
    Pursue potential other strategic transactions, which could include mergers,
license agreements or other collaborations, with third parties; or
    
    Implement an orderly wind down of the Company if other
alternatives are not deemed viable and in the best interests of the Company.
 Principles of Consolidation
  Use of Estimates
 GAAP
 Cash, Cash Equivalents and Short-Term Investments
 SFAS Accounting for Certain Investments in Debt
and Equity Securities
 F-6




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##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
  Concentration of Risk
   Impairment of Long-Lived Assets and Assets to Be Disposed Of
 Accounting for the Impairment or Disposal of Long-Lived Assets
   F-7




---



##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
 Property and Equipment
   December 31,2008
    
    2007Laboratory equipment
    
    $
    6,171
    
    
    $
    6,498Computer equipment and software
    
    
    4,654
    
    
    
    4,727Furniture and fixtures
    
    
    477
    
    
    
    491Leasehold improvements
    
    
    3,275
    
    
    
    3,27314,577
    
    
    
    14,989Less: Accumulated depreciation
    
    
    (14,220
    )
    
    
    (13,718
    )$
    357
    
    
    $
    1,271
  Patents
  Accrued Clinical/Regulatory Expenses
  Share-Based Compensation
 Share-Based Payment SFAS 123R Accounting and Disclosure of Stock-Based Compensation SFAS 123 ESPP APB
 F-8




---



##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
 Accounting for Stock Issued to Employees APB 25 SEC SAB SAB 107
   Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services
  Valuation and Expense Information Under SFAS 123R and APB 25
  December 31,2008
    
    
    2007
    
    
    2006Research and development
    
    $
    1,961
    
    
    $
    1,907
    
    
    $
    1,833General and administrative
    
    
    2,461
    
    
    
    2,903
    
    
    
    3,215Share-based compensation expense included in operating expenses
    
    $
    4,422
    
    
    $
    4,810
    
    
    $
    5,048
 F-9




---



##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
  Options:
 December 31,2008
    
    2007
    
    2006Risk-free interest rate
    
    
    3.2
    %
    
    
    4.7
    %
    
    
    4.8
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Volatility
    
    
    115.1
    %
    
    
    118.0
    %
    
    
    113.7
    %Expected life (years)
    
    
    5.6
    
    
    
    6.0
    
    
    
    5.9
 F-10




---



##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
 ESPP:
 December 31,2008
    
    2007
    
    2006Risk-free interest rate
    
    
    1.1
    %
    
    
    4.5
    %
    
    
    4.8
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Volatility
    
    
    99.6
    %
    
    
    67.8
    %
    
    
    46.4
    %Expected life (years)
    
    3 months
    
    3 months
    
    3 months
      F-11




---



##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
 Restricted Stock
      Net Loss Per Share
 Earnings per Share EPS
 F-12




---



##### Table of Contents



1. Organization and Summary of Significant Accounting Policies (continued)
  Comprehensive Loss
 Reporting Comprehensive Income (Loss)
 Recently Issued Accounting Standards
 FASB Fair Value
Measurements SFAS 157
 The Fair Value Option
for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115 SFAS 159
 EITF Accounting for Nonrefundable Advance Payments for Goods or
Services to Be Used in Future Research and Development Activities EITF 07-3
 The Hierarchy of Generally Accepted Accounting
Principles SFAS 162 The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles
 F-13




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##### Table of Contents



2. Cash Equivalents and Short-term Investments
  Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    Realized
    
    Realized
    
    Estimated FairCost
    
    Gains
    
    Losses
    
    Gains
    
    Losses
    
    ValueDecember 31, 2008Money market accounts
    
    $
    2,686
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,686Asset-backed auction rate securities
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,270
    )
    
    
    7,730Auction security rights
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,270
    
    
    
    
    
    
    
    2,270$
    12,686
    
    
    $
    
    
    
    $
    
    
    
    $
    2,270
    
    
    $
    (2,270
    )
    
    $
    12,686
 Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    Realized
    
    Realized
    
    Estimated FairCost
    
    Gains
    
    Losses
    
    Gains
    
    Losses
    
    ValueDecember 31, 2007Money market accounts
    
    $
    2,051
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,051Obligations of United States government agencies
    
    
    6,916
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,930Asset-backed auction rate securities
    
    
    28,056
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,056$
    37,023
    
    
    $
    14
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    37,037
   ARS Rights
  F-14




---



##### Table of Contents



2. Cash Equivalents and Short-term Investments (continued)
  3. Fair Value of Financial Instruments
   Fair Value Measurements at Reporting Date UsingQuoted prices inactive markets
    
    
    
    
    
    Significantfor identical
    
    Significant other
    
    unobservableBalance at
    
    assets
    
    observable inputs
    
    inputsDescription
    
    December 31, 2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Cash and cash equivalents
    
    $
    9,447
    
    
    $
    9,447
    
    
    $
    
    
    
    $
    Short-term investments
    
    
    7,730
    
    
    
    
    
    
    
    
    
    
    
    7,730ARS Rights (Note 2)
    
    
    2,270
    
    
    
    
    
    
    
    
    
    
    
    2,270Total
    
    $
    19,447
    
    
    $
    9,447
    
    
    $
    
    
    
    $
    10,000
  Fair Value Measurement UsingSignificant Unobservable Inputs(Level 3)Year EndedDecember 31, 2008Beginning balance
    
    $
    Transfers in to Level 3Auction rate securities


10,000ARS Rights


2,270Total realized/unrealized lossesIncluded in net loss
    
    
    (2,270
    )Included in comprehensive loss
    
    
    Purchases, issuances and settlements
    
    
    Ending balance
    
    $
    10,000
 F-15




---



##### Table of Contents



4. Commitments
 Leases
   F-16




---



##### Table of Contents



4. Commitments (continued)
  Operating
    
    
    CapitalYears ended December 31,
    
    Leases
    
    
    Leases2009
    
    $
    491
    
    
    $
    152010
    
    
    66
    
    
    
    142011
    
    
    49
    
    
    
    142012
    
    
    32
    
    
    
    122013 and there-after
    
    
    19
    
    
    
    Total
    
    $
    657
    
    
    
    55Less amount representing interest
    
    
    
    
    
    
    (10
    )Present value of net minimum lease payments
    
    
    
    
    
    
    45Less current portion
    
    
    
    
    
    
    (11
    )Noncurrent portion of capital lease obligations
    
    
    
    
    
    $
    34
  Purchase Obligations
  5. Credit Facility
 Credit Facility
 6. Long-Term Debt
  OriginalNoteInterest
    
    
    
    AmountDate of Note
    
    Rate (%)
    
    Monthly Payments
    
    (in thousands)December 28, 2006
    
    10.56
    
    First 36 months at $8,000; last 12 months at $3,000
    
    
    263June 28, 2007
    
    10.82
    
    First 36 months at $2,000; last 12 months at $500
    
    
    75December 31, 2007
    
    10.55
    
    $6,000 for 48 months
    
    
    236$
    574
 F-17




---



##### Table of Contents



6.
Long-Term Debt (continued)
  NotesYears ended December 31,
    
    Payable2009
    
    $
    1772010
    
    
    1272011
    
    
    69Total
    
    
    373Less amount representing interest
    
    
    (42
    )Present value of net minimum notes payable payments
    
    
    331Less current portion
    
    
    (152
    )Noncurrent portion of notes payable
    
    $
    179
 7. Stockholders Equity
 Preferred Stock
  Series A Preferred Stock
  Warrants
    Restricted Stock
  F-18




---



##### Table of Contents



7. Stockholders Equity (continued)
      Stock Option Plans
 1994 Plan
 2004 Plan
  Outstanding OptionsOptions
    
    
    
    
    
    Weighted-Available
    
    Number of
    
    AverageFor Grant
    
    Shares
    
    Exercise PriceBalance at December 31, 2005
    
    
    3,190,231
    
    
    
    2,148,028
    
    
    $
    16.09Granted
    
    
    (2,450,745
    )
    
    
    2,450,745
    
    
    $
    4.58Restricted stock granted
    
    
    (23,600
    )
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    (56,012
    )
    
    $
    2.25Cancelled
    
    
    240,382
    
    
    
    (240,382
    )
    
    $
    14.04
 F-19




---



##### Table of Contents



7. Stockholders Equity (continued)
 Outstanding OptionsOptions
    
    
    
    
    
    Weighted-Available
    
    Number of
    
    AverageFor Grant
    
    Shares
    
    Exercise PriceExpired
    
    
    (100,983
    )
    
    
    
    
    
    $
    26.39Balance at December 31, 2006
    
    
    855,285
    
    
    
    4,302,379
    
    
    $
    9.83Additional shares authorized
    
    
    840,000
    
    
    
    
    
    
    
    Granted
    
    
    (1,027,973
    )
    
    
    1,027,973
    
    
    $
    4.30Restricted stock granted
    
    
    (3,600
    )
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    (166,280
    )
    
    $
    3.01Cancelled
    
    
    354,496
    
    
    
    (354,496
    )
    
    $
    14.20Expired
    
    
    (153,808
    )
    
    
    
    
    
    $
    25.80Balance at December 31, 2007
    
    
    864,400
    
    
    
    4,809,576
    
    
    $
    8.56Additional shares authorized
    
    
    1,400,000
    
    
    
    
    
    
    
    Granted
    
    
    (1,481,900
    )
    
    
    1,481,900
    
    
    $
    2.02Exercised
    
    
    
    
    
    
    (1,097
    )
    
    $
    2.51Cancelled
    
    
    663,418
    
    
    
    (663,418
    )
    
    $
    8.91Expired
    
    
    (203,486
    )
    
    
    
    
    
    $
    19.80Balance at December 31, 2008
    
    
    1,242,432
    
    
    
    5,626,961
    
    
    $
    6.80
   Years Ended December 31,2008
    
    2007
    
    2006Weighted-
    
    
    
    
    
    Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseOptions
    
    Price
    
    Options
    
    Price
    
    Options
    
    PriceExercisable at end of year
    
    
    3,522,747
    
    
    $
    9.08
    
    
    
    2,808,588
    
    
    $
    11.44
    
    
    
    1,859,139
    
    
    $
    16.27Weighted-average fair
value of options granted
during the year
    
    $
    1.70
    
    
    
    
    
    
    $
    3.71
    
    
    
    
    
    
    $
    3.92
  Weighted-
    
    
    
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    
    
    
    AverageRemaining
    
    Weighted-
    
    
    
    
    
    ExerciseContractual
    
    Average
    
    
    
    
    
    Price ofOptions
    
    Range of
    
    Life
    
    Exercise
    
    Options
    
    OptionsOutstanding
    
    Exercise Prices
    
    (in years)
    
    Price
    
    Exercisable
    
    Exercisable747,759
    
    $
    0.64
    
    
    
    
    
    
    $
    1.82
    
    
    
    9.45
    
    
    $
    1.66
    
    
    
    9,821
    
    
    $
    1.09786,614
    
    $
    1.87
    
    
    
    
    
    
    $
    2.42
    
    
    
    8.38
    
    
    $
    2.36
    
    
    
    286,884
    
    
    $
    2.34541,869
    
    $
    3.06
    
    
    
    
    
    
    $
    3.60
    
    
    
    8.01
    
    
    $
    3.13
    
    
    
    288,869
    
    
    $
    3.16667,678
    
    $
    3.61
    
    
    
    
    
    
    $
    4.44
    
    
    
    7.37
    
    
    $
    4.01
    
    
    
    554,234
    
    
    $
    4.03791,568
    
    
    
    
    
    $
    4.46
    
    
    
    
    
    
    
    7.29
    
    
    $
    4.46
    
    
    
    728,778
    
    
    $
    4.46853,500
    
    $
    4.60
    
    
    
    
    
    
    $
    5.26
    
    
    
    7.27
    
    
    $
    5.24
    
    
    
    592,750
    
    
    $
    5.25664,395
    
    $
    5.36
    
    
    
    
    
    
    $
    14.85
    
    
    
    6.68
    
    
    $
    9.17
    
    
    
    487,833
    
    
    $
    10.46573,578
    
    $
    15.70
    
    
    
    
    
    
    $
    60.31
    
    
    
    3.00
    
    
    $
    29.09
    
    
    
    573,578
    
    
    $
    29.095,626,961
    
    $
    0.64
    
    
    
    
    
    
    $
    60.31
    
    
    
    7.29
    
    
    $
    6.80
    
    
    
    3,522,747
    
    
    $
    9.08
 F-20




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##### Table of Contents



7. Stockholders Equity (continued)
  Employee Stock Purchase Plan
  Years Ended December 31,2008
    
    2007
    
    2006Weighted-average fair value of Employee Stock Purchase Plan purchases
    
    $
    0.71
    
    
    $
    1.47
    
    
    $
    1.48
 F-21




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##### Table of Contents



7. Stockholders Equity (continued)
 Stockholder Rights Plan
 Rights
Plan Right
 8. 401(k) Plan
 401(k)
Plan
 9. Income Taxes
 Accounting for Uncertainty in Income Taxes an
Interpretation of FASB Statement No. 109
  F-22




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##### Table of Contents



9. Income Taxes (continued)
    December 31,2008
    
    
    2007Deferred tax assets:Net operating loss carryforwards
    
    $
    
    
    
    $
    Research and development credits
    
    
    
    
    
    
    Capitalized research and development and other
    
    
    14,330
    
    
    
    10,923Total deferred tax assets
    
    
    14,330
    
    
    
    10,923Net deferred tax assets
    
    
    14,330
    
    
    
    10,923Valuation allowance for deferred tax assets
    
    
    (14,330
    )
    
    
    (10,923
    )Net deferred taxes
    
    $
    
    
    
    $
    
 10. Subsequent Events
 Development and Stock Purchase Agreement
 Effective Date Development Agreement BioMarin CF BioMarin
Pharma Riquent
 Series B Preferred Stock
  F-23




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##### Table of Contents



10. Subsequent Events (continued)
 Purchase Agreement
 Auction Rate Securities
  F-24




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##### Table of Contents



10. Subsequent Events (continued)
 Interim Efficacy Analysis Results and Restructuring Activities
   F-25




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##### Table of Contents



11. Selected Quarterly Financial Data (unaudited)
  Quarters EndedMar. 31,
    
    Jun. 30,
    
    Sept. 30,
    
    Dec. 31,2008Expenses:Research and development
    
    $
    11,338
    
    
    $
    12,732
    
    
    $
    14,099
    
    
    $
    12,856General and administrative
    
    
    1,906
    
    
    
    2,069
    
    
    
    2,791
    
    
    
    2,936Asset impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,810Loss from operations
    
    
    (13,244
    )
    
    
    (14,801
    )
    
    
    (16,890
    )
    
    
    (18,602
    )Interest income (expense), net
    
    
    (393
    )
    
    
    (134
    )
    
    
    (244
    )
    
    
    1,454Net loss
    
    $
    (13,637
    )
    
    $
    (14,935
    )
    
    $
    (17,134
    )
    
    $
    (17,148
    )Basic and diluted net loss per share
    
    $
    (0.34
    )
    
    $
    (0.31
    )
    
    $
    (0.31
    )
    
    $
    (0.31
    )Shares used in computing basic and diluted net loss per share
    
    
    39,631
    
    
    
    48,252
    
    
    
    55,327
    
    
    
    55,4232007Expenses:Research and development
    
    $
    10,375
    
    
    $
    12,186
    
    
    $
    11,448
    
    
    $
    12,626General and administrative
    
    
    1,980
    
    
    
    2,112
    
    
    
    2,585
    
    
    
    2,381Loss from operations
    
    
    (12,355
    )
    
    
    (14,298
    )
    
    
    (14,033
    )
    
    
    (15,007
    )Interest income, net
    
    
    485
    
    
    
    781
    
    
    
    744
    
    
    
    607Net loss
    
    $
    (11,870
    )
    
    $
    (13,517
    )
    
    $
    (13,289
    )
    
    $
    (14,400
    )Basic and diluted net loss per share
    
    $
    (0.36
    )
    
    $
    (0.34
    )
    
    $
    (0.34
    )
    
    $
    (0.36
    )Shares used in computing basic and diluted net loss per share
    
    
    32,737
    
    
    
    39,256
    
    
    
    39,577
    
    
    
    39,607
 F-26




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    Description3.1
    
    Restated Certificate of Incorporation (1)3.2
    
    Amended and Restated Bylaws (2)3.3
    
    Certificate of Designations of Series A Junior Participating Preferred Stock (32)4.1
    
    Form of Common Stock Certificate (3)4.2
    
    Rights Agreement, dated as of December 3, 1998, between the Company
and American Stock Transfer & 
Trust Company (4)4.2
    
    Amended and Restated Rights Agreement, dated as of December 2, 2008,
between the Company and American Stock Transfer & Trust Company
(4)4.3
    
    Amendment No. 1 to Amended and Restated Rights Agreement, dated as of
January 20, 2009 between the Company and American Stock Transfer &
Trust Company (30)10.1
    
    Form of Indemnification Agreement (5)*10.2
    
    Industrial Real Estate Lease, effective July 27, 1992, by and between
the Company and BRE Properties, Inc. (6)10.3
    
    First Amendment to Lease, dated March 15, 1993, by and between the
Company and BRE Properties, Inc. (6)10.4
    
    Second Amendment to Lease, dated July 18, 1994, by and between the
Company and BRE Properties, Inc. (7)10.5
    
    Third Amendment to Lease, dated January 26, 1995, by and between the
Company and BRE Properties, Inc. (8)10.6
    
    Fourth Amendment to Lease, dated July 8, 2004, by and between the
Company and EOP-Industrial Portfolio, LLC (9)10.7
    
    Building Lease Agreement, effective November 1, 1996, by and between
the Company and WCB II-S BRD Limited Partnership (10)10.8
    
    First Amendment to Lease, dated May 4, 2001, by and between the
Company and Spieker Properties, L.P. (9)10.9
    
    Second Amendment to Lease, dated July 8, 2004, by and between the
Company and EOP-Industrial Portfolio, LLC (9)10.10
    
    La Jolla Pharmaceutical Company 1994 Stock Incentive Plan (Amended and
Restated as of May 16, 2003) (11)*




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##### Table of Contents



Exhibit Number
    
    Description10.11
    
    La Jolla Pharmaceutical Company 1995 Employee Stock Purchase Plan
(Amended and Restated as of June 20, 2008)
(33)*10.12
    
    La Jolla Pharmaceutical Company 2004 Equity Incentive Plan (Amended
and Restated as of June 20, 2008) (33)*10.13
    
    Form of Option Grant under the La Jolla Pharmaceutical Company 2004
Equity Incentive Plan (12)*10.14
    
    Steven B. Engle Employment
Agreement (6)*10.15
    
    Amendment No. 1 to Steven B. Engle Employment Agreement (13)*10.16
    
    Amendment No. 2 to Steven B. Engle Employment Agreement (14)*10.17
    
    Amendment No. 3 to Steven B. Engle Employment Agreement (11)*10.18
    
    Amended and Restated Employment Agreement, dated February 23, 2006, by
and between the Company and Bruce Bennett, Jr. (1)*10.19
    
    Amended and Restated Employment Agreement, dated February 23, 2006, by
and between the Company and Josefina Elchico (1)*10.20
    
    Amended and Restated Employment Agreement, dated February 23, 2006, by
and between the Company and Paul Jenn, Ph.D. (1)*10.21
    
    Amended and Restated Employment Agreement, dated February 23, 2006, by
and between the Company and Theodora Reilly (1)*10.22
    
    Amended and Restated Employment Agreement, dated February 23, 2006, by
and between the Company and Gail Sloan (1)*10.23
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Steven B. Engle (15)*10.24
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Matthew Linnik, Ph.D. (15)*10.25
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Bruce Bennett (15)*10.26
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Josefina T. Elchico (15)*10.27
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Paul Jenn, Ph.D. (15)*




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##### Table of Contents



Exhibit Number
    
    Description10.28
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Theodora Reilly (15)*10.29
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Gail Sloan (15)*10.30
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Andrew Wiseman, Ph.D. (15)*10.31
    
    Retention Agreement, dated October 6, 2005, by and between the Company
and Lisa Koch (24)*10.32
    
    Master Security Agreement, effective as of September 6, 2002, by and
between the Company and General Electric Capital Corporation (17)10.33
    
    Promissory Note, dated as of December 28, 2006, by and between the
Company and General Electric Capital 
Corporation (23)10.34
    
    Promissory Note, dated as of September 28, 2004, by and between the
Company and General Electric Capital 
Corporation (18)10.35
    
    Promissory Note, dated as June 25, 2004, between the Company and
General Electric Capital Corporation (9)




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##### Table of Contents



Exhibit Number
    
    Description10.36
    
    Promissory Note, dated as March 31, 2003, between the Company and
General Electric Capital Corporation (19)10.37
    
    Promissory Note, dated as of December 18, 2003, between the Company
and General Electric Capital Corporation (20)10.38
    
    Promissory Note, dated as of September 26, 2003, between the Company
and General Electric Capital Corporation (16)10.39
    
    Promissory Note, dated as of June 27, 2003, between the Company and
General Electric Capital Corporation (11)10.40
    
    Promissory Note, dated as of April 23, 2003, between the Company and
General Electric Capital Corporation (21)10.41
    
    Promissory Note, dated as of December 30, 2002, between the Company
and General Electric Capital Corporation (21)10.42
    
    Amendment to Promissory Note, dated as of September 27, 2002, by and
between the Company and General Electric Capital Corporation (17)10.43
    
    Promissory Note, dated as of September 26, 2002, by and between the
Company and General Electric Capital Corporation (17)10.44
    
    Employment Agreement, dated March 15, 2006, by and between the Company
and Deirdre Y. Gillespie, M.D. (22)*10.45
    
    Separation Agreement, dated March 17, 2006, by and between the Company
and Steven B. Engle (22)*10.46
    
    Employment Offer Letter, dated July 10, 2006 and executed July 14,
2006, by and between the Company and Michael Tansey, M.D. (25)*10.47
    
    Employment Agreement, dated December 4, 2006, by and between the
Company and Michael Tansey, M.D. (23)*10.48
    
    Underwriting Agreement, dated as of March 29, 2007, between the
Company and Needham & Company, LLC and A.G. Edwards & Sons, Inc. (29)10.49
    
    Employment Agreement, dated May 10, 2007, by and between the Company
and Niv Caviar (27)*10.50
    
    Promissory Note, dated as of June 28, 2007, between the Company and
General Electric Capital Corporation (6)10.51
    
    Amendment to Chief Executive Officer Employment Agreement (6)*10.52
    
    Promissory Note, dated as of December 31, 2007, between the Company
and General Electric Capital Corporation (31)10.53
    
    Employment Agreement, dated March 4, 2008, by and between the Company
and Luke Seikkula (28)*10.54
    
    Underwriting Agreement, dated as of May 6, 2008, between the Company and UBS Securities, LLC and Canaccord Adams, Inc. (34)10.55
    
    Form of Warrant Agreement (34)10.56
    
    Reserved10.57
    
    Employment Agreement, dated March 4, 2008, by and between the Company and Lisa Koch-Hulle **10.58
    
    First Amendment to Employment Agreement, dated December 24, 2008, by and between the Company and Gail Sloan.**10.59
    
    First Amendment to Employment Agreement, dated December 24, 2008, by and between the Company and Niv Caviar.**10.60
    
    First Amendment to Employment Agreement, dated December 26, 2008, by and between the Company and Vicki Motte.**10.61
    
    First Amendment to Employment Agreement, dated December 26, 2008, by and between the Company and Luke Seikkula.**10.62
    
    First Amendment to Employment Agreement, dated December 29, 2008, by and between the Company and Josefina Elchico.**10.63
    
    First Amendment to Employment Agreement, dated December 29, 2008, by and between the Company and Lisa Koch-Hulle.**10.64
    
    First Amendment to Employment Agreement, dated December 30, 2008, by and between the Company and Michael Tansey.**10.65
    
    First Amendment to Employment Agreement, dated December 31, 2008, by and between the Company and Deirdre Gillespie.**




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##### Table of Contents



Exhibit Number
    
    Description21.1
    
    Subsidiaries of La Jolla Pharmaceutical Company (12)23.1
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    This exhibit is a management contract or compensatory plan or arrangement.**
    
    Filed herewith.(1)
    
    Previously filed with the Companys Current Report on Form 8-K filed March 1, 2006 and
incorporated by reference herein.(2)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000 and incorporated by reference herein.(3)
    
    Previously filed with the Companys Registration Statement on Form S-3 (Registration No.
333-131246) filed January 24, 2006 and incorporated by reference herein.




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##### Table of Contents



(4)
    
    Previously filed with the Companys Current Report on Form 8-K filed December 4, 2008 and
incorporated by reference herein.(5)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005 and incorporated by reference herein.(6)
    
    Previously filed with the Companys Registration Statement on Form S-1 (Registration No.
33-76480) filed June 3, 1994 and incorporated by reference herein.(7)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 1994 and incorporated by reference herein.(8)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended March
31, 1995 and incorporated by reference herein.(9)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2004 and incorporated by reference herein.(10)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 and incorporated by reference herein.(11)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2003 and incorporated by reference herein.(12)
    
    Previously filed with the Companys Annual Report on Form 10-K for the year ended December
31, 2004 and incorporated by reference herein.(13)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 1997 and incorporated by reference herein.(14)
    
    Previously filed with the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 and incorporated by reference herein.(15)
    
    Previously filed with the Companys Current Report on Form 8-K filed October 7, 2005 and
incorporated by reference herein.




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##### Table of Contents



(16)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2003 and incorporated by reference herein.(17)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002 and incorporated by reference herein.(18)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004 and incorporated by reference herein.(19)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended March
31, 2004 and incorporated by reference herein.(20)
    
    Previously filed with the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 and incorporated by reference herein.(21)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended March
31, 2003 and incorporated by reference herein.(22)
    
    Previously filed with the Companys Current Report on Form 8-K filed March 20, 2006 and
incorporated by reference herein.(23)
    
    Previously filed with the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2006 and incorporated by reference herein.(24)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2006 and incorporated by reference herein.(25)
    
    Previously filed with the Companys Current Report on Form 8-K filed July 18, 2006 and
incorporated by reference herein.(26)
    
    Previously filed with the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2007 and incorporated by reference herein.(27)
    
    Previously filed with the Companys Current Report on Form 8-K filed May 10, 2007 and
incorporated by reference herein.(28)
    
    Previously filed with the Companys Current Report on Form 8-K filed March 4, 2008 and
incorporated by reference herein.(29)
    
    Previously filed with the Companys Current Report on Form 8-K filed March 30, 2007 and
incorporated by reference herein.




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##### Table of Contents



(30)
    
    Previously filed with the Companys Registration Statement on Form 8-A (Registration No.
000-24274) filed January 26, 2009 and incorporated by reference herein.(31)
    
    Previously filed with the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2007 and incorporated by reference herein.(32)
    
    Previously filed with the Companys Current Report on Form 8-A12G filed December 4, 2008 and
incorporated by reference herein.(33)
    
    Previously filed with the Companys Registration Statement on Form S-8 (Registration No.
333-151825) filed June 20, 2008 and incorporated by reference herein.(34)
    
    Previously filed with the Companys Current Report on Form 8-K filed May 7, 2008 and
incorporated by reference herein.