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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. THE COMPANY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Alkermes plc (“Alkermes” or the “Company”) is a fully integrated, global
biopharmaceutical company that applies its scientific expertise and proprietary
technologies to develop innovative medicines that improve patient outcomes. The Company
has a diversified portfolio of more than 20 commercial drug products and a substantial
clinical pipeline of product candidates that address central nervous system (“CNS”)
disorders such as addiction, schizophrenia and depression. Headquartered in Dublin,
Ireland, Alkermes has a research and development center and corporate offices in Waltham, Massachusetts and
manufacturing facilities in Athlone, Ireland; Gainesville, Georgia; and Wilmington,
Ohio.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          On September 16, 2011, the business of Alkermes, Inc. and the drug technologies
business (“EDT”) of Elan Corporation, plc (“Elan”) were combined (referred to as the “Business Combination”, the “acquisition of
EDT” or the“ EDT acquisition”) in a transaction accounted for as a reverse acquisition with Alkermes, Inc. treated as the accounting acquirer. As a result, the historical financial statements of Alkermes, Inc. are included in the comparative prior periods. As part of the Business Combination, Antler
Acquisition Corp., a wholly owned subsidiary of the Company, merged with and into
Alkermes, Inc. (the “Merger”), with Alkermes, Inc. surviving as a wholly owned
subsidiary of the Company. Prior to the Merger, EDT was carved-out of Elan and
reorganized under the Company. At the effective time of the Merger, (i) each share of
Alkermes, Inc. common stock then issued and outstanding and all associated rights were
canceled and automatically converted into the right to receive one ordinary
share of the Company; (ii) all then issued and outstanding options to purchase
Alkermes, Inc. common stock granted under any stock option plan were converted into
options to purchase on substantially the same terms and conditions the same number of
ordinary shares of the Company at the same exercise price; and (iii) all then issued
and outstanding awards of Alkermes Inc. common stock were converted into awards of the same
number, on substantially the same terms and conditions, of ordinary shares of the
Company. As a result, upon consummation of the Merger and the issuance of the ordinary
shares of the Company in exchange for the canceled shares of Alkermes, Inc. common
stock, the former shareholders of Alkermes, Inc. owned approximately 75% of the Company,
with the remaining approximately 25% of the Company owned by a subsidiary of Elan
pursuant to the terms of a shareholder’s agreement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Except
where specifically noted or the context otherwise requires, the
use of the terms such as “Alkermes” and “Company” and
“we” and “our” and “us” in these
<i>Notes to Condensed Consolidated Financial Statements</i> refers to
Alkermes and Alkermes, Inc., interchangeably.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Basis of Presentation</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The accompanying condensed consolidated financial statements of Alkermes for the
three and six months ended September 30, 2011 and 2010 are unaudited and have been
prepared on a basis substantially consistent with the audited financial statements for
the year ended March 31, 2011. The year-end condensed consolidated balance sheet data
was derived from audited financial statements, but does not include all disclosures
required by accounting principles generally accepted in the United States of America
(“U.S.”) (commonly referred to as “GAAP”). In the opinion of management, the condensed
consolidated financial statements include all adjustments, which are of a normal
recurring nature, that are necessary to present fairly the results of operations for
the reported periods. These financial statements should be read in conjunction with the
financial statements and notes thereto of Alkermes, Inc. which are
contained, or incorporated by reference, in Alkermes, Inc.’s Annual Report on Form 10-K
for the year ended March 31, 2011, as amended (the “Annual Report”), and the audited financial statements and notes thereto, which has been filed with the U.S. Securities and
Exchange Commission (“SEC”). The
results of the Company’s operations for any interim period are not necessarily
indicative of the results of the Company’s operations for any other interim period or
for a full fiscal year.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Principles of Consolidation</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The condensed consolidated financial statements include the accounts of Alkermes
plc and its wholly-owned subsidiaries: Alkermes Ireland Holdings Limited, Alkermes
Pharma Ireland Limited, Alkermes US Holdings, Inc., Alkermes, Inc., Eagle Holdings USA,
Inc., Alkermes Gainesville LLC, Alkermes Controlled Therapeutics, Inc., and Alkermes
Europe, Ltd. Intercompany accounts and transactions have been eliminated.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Use of Estimates</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The preparation of the Company’s condensed consolidated financial statements in
accordance with GAAP requires management to make estimates, judgments, and assumptions
that may affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. On an on-going basis, the
Company evaluates its estimates and judgments and methodologies, including those
related to revenue recognition and related allowances, its collaborative relationships,
clinical trial expenses, the valuation of inventory, impairment and amortization of
intangibles and long-lived assets, share-based compensation, income taxes including the
valuation allowance for deferred tax assets, valuation of investments and derivative
instruments, litigation, and restructuring charges. The Company bases its
estimates on historical experience and on various other assumptions that are
believed to be reasonable, the results of which form the basis for making judgments
about the carrying values of assets and liabilities. Actual results may differ from
these estimates under different assumptions or conditions.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Risk-management instruments</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          On
September 16, 2011, the Company entered into a $310.0 million first lien term
loan facility (the “First Lien Term Loan”)
and a $140.0 million second lien term loan
facility the (“Second Lien Term Loan” and, together with the First Lien Term Loan,
the “Term Loans”). Interest on the Term Loans is at a rate equal to an applicable
margin plus three-month LIBOR. The Company addressed its risk to exposure to
fluctuations in interest rates by entering into certain derivative financial
instruments, the objective of which is to limit the impact of fluctuations in interest
rates on earnings. The Company’s derivative activities are initiated within the
guidelines of documented corporate risk management policies and do not create
additional risk because gains and losses on derivative contracts offset losses and
gains on the assets, liabilities, and transactions being hedged.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          During the three months ended September 30, 2011, the Company entered into an
interest rate swap contract that was designated and qualified as a cash flow hedge. The
Company reviews the effectiveness of its derivatives on a quarterly basis. The
effective portion of gains and losses on the Company’s cash flow hedge is reported as a
component of accumulated other comprehensive loss and reclassified into earnings in the
same period the hedged transaction affects earnings. Hedge ineffectiveness is
immediately recognized in earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          During the three months ended September 30, 2011, the Company entered into an
interest rate cap contract that was not designated as a hedging instrument. The
interest rate cap is recorded at fair value with associated gains or losses recognized
in current earnings during the period of change.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Segment Information</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company operates as one business segment, which is the business of developing,
manufacturing and commercializing medicines designed to yield better
therapeutic outcomes and improve the lives of patients with serious diseases. The
Company’s chief decision maker, the Chairman and Chief Executive Officer, reviews the
Company’s operating results on an aggregate basis and manages the Company’s operations
as a single operating unit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Business Acquisitions</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company’s condensed consolidated financial statements include the operations
of an acquired business after the completion of the acquisition. The Company accounts
for acquired businesses using the acquisition method of accounting. The acquisition
method of accounting for acquired businesses requires, among other things, that most
assets acquired and liabilities assumed be recognized at their estimated fair values as
of the acquisition date, and that the fair value of acquired in-process research and
development (“IPR&D”) be recorded on the balance sheet. Also, transaction costs are
expensed as incurred. Any excess of the purchase price over the assigned values of the
net assets acquired is recorded as goodwill. Contingent consideration is included
within the acquisition cost and is recognized at its fair value on the acquisition
date. A liability resulting from contingent consideration is remeasured to fair value
at each reporting date until the contingency is resolved. Changes in fair value are
recognized in earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Goodwill and Intangible Assets</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Goodwill represents the excess cost of the Company’s investment in the net assets
of acquired companies over the fair value of the underlying identifiable net assets at
the date of acquisition. The Company’s goodwill balance solely relates to the EDT
acquisition in the fiscal year ended March 31, 2012, as described in Note 3, <i>Acquisitions</i>. Goodwill is not
amortized but is tested for impairment annually or when events or circumstances
indicate the fair value of a reporting unit may be below its carrying value. A
reporting unit is an operating segment or sub-segment to which goodwill is assigned
when initially recorded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          In September 2011, the Financial Accounting Standards Board (“FASB”) issued
guidance related to testing goodwill for impairment. This accounting standard allows an
entity to first assess qualitative factors to determine whether it is necessary to
perform the current two-step test. If an entity believes, as a result of its
qualitative assessment, that it is more-likely-than-not that the fair value of a
reporting unit is less than its carrying amount, the quantitative impairment test is
required. Otherwise, no further testing is required. An entity can choose to perform
the qualitative assessment on none, some or all of its reporting units. Moreover, an
entity can bypass the qualitative assessment for any reporting unit in any period and
proceed directly to step one of the impairment test, and then resume performing the
qualitative assessment in any subsequent period. This standard is effective for annual
and interim goodwill impairment tests performed for fiscal years beginning after
December 15, 2011. However, an entity can choose to early adopt the standard if its annual test date
is before the issuance of the final standard, provided that the entity has not yet
performed its 2011 annual impairment test or issued its financial statements. The
Company chose to early adopt the provisions of this standard as it had not yet performed its
annual impairment test, which the
Company performs as of October 30, 2011. The adoption of this standard did not
impact the Company’s financial position or results of operations.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company’s finite-lived intangible assets consist of core developed technology
and collaboration agreements and are recorded at fair value at the time of their
acquisition and are stated within its condensed consolidated balance sheets net of
accumulated amortization and impairments. The finite-lived intangible assets are
amortized over their estimated useful life using the economic use method, which
reflects the pattern that the economic benefits of the intangible assets are consumed
as revenue is generated from the underlying patent or contract. The useful lives of the
Company’s intangible assets are primarily based on the legal or contractual life of the
underlying patent or contract, which does not include additional years for the
potential extension or renewal of the contract or patent. IPR&D represents the fair
value assigned to research and development assets that were acquired prior to its
completion. IPR&D is considered an indefinite-lived asset and is not amortized but is
tested for impairment annually or when events or circumstances indicate the fair value
may be below its carrying value. If and when development is complete, which generally
occurs when regulatory approval to market a product is obtained, the associated assets
would be deemed finite-lived and would then be amortized based on their respective
estimated useful lives at that point in time. The Company’s intangible assets were all
acquired as part of the EDT acquisition in the fiscal year ended March 31, 2012, as described in Note 3,
<i>Acquisitions</i>.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Foreign Currency</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company’s functional and reporting currency is the U.S. dollar. Transactions
in foreign currencies are recorded at the exchange rate prevailing on the date of the
transaction. The resulting monetary assets and liabilities are translated into U.S.
dollars at exchange rates prevailing on the subsequent balance sheet date. Gains and
losses as a result of translation adjustments are recorded within “Other income
(expense)” in the accompanying condensed consolidated statement of operations and
comprehensive loss.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>New Accounting Pronouncements</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          From time to time, new accounting pronouncements are issued by the FASB or other
standard setting bodies that are adopted by the Company as of the specified effective
date. Unless otherwise discussed, the Company believes that the impact of recently
issued standards that are not yet effective will not have a material impact on its
financial position or results of operations upon adoption.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          In January 2010, the Company adopted accounting guidance issued by the FASB
related to fair value measurements that requires additional disclosure related to
transfers in and out of Levels 1 and 2 of the fair value hierarchy. In addition,
effective for the Company on April 1, 2011, this standard further requires an entity to
present disaggregated information about activity in Level 3 fair value measurements on
a gross basis, rather than as one net amount. As this accounting standard only requires
enhanced disclosure, the adoption of this newly issued accounting standard did not
impact the Company’s financial position or results of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          On April 1, 2011, the Company prospectively adopted the accounting guidance
related to the milestone method of revenue recognition for research and development
arrangements. Under the milestone method, contingent consideration received from the
achievement of a substantive milestone is recognized in its entirety in the period in
which the milestone is achieved, which the Company believes is more consistent with the
substance of its performance under its various licensing and collaboration agreements.
A milestone is defined as an event (i) that can only be achieved based in whole or in
part on either the entity’s performance or on the occurrence of a specific outcome
resulting from the entity’s performance, (ii) for which there is substantive
uncertainty at the date the arrangement is entered into that the event will be
achieved, and (iii) that would result in additional payments being due to the entity. A
milestone is substantive if the consideration earned from the achievement of the
milestone is consistent with the Company’s performance required to achieve the
milestone, or the increase in value to the collaboration resulting from the Company’s
performance, relates solely to the Company’s past performance, and is reasonable
relative to all of the other deliverables and payments within the arrangement. The
Company’s license and collaboration agreements with its partners provide for payments
to the Company upon the achievement of development milestones, such as the completion
of clinical trials or regulatory approval for drug candidates. As of April 1, 2011, the
Company’s agreements with partners included potential future payments for development
milestones aggregating $17.0 million from agreements with Amylin Pharmaceuticals, Inc.
(“Amylin”), and Cilag GmbH International (“Cilag”).
Given the challenges inherent in developing and obtaining approval for
pharmaceutical and biologic products, there was substantial uncertainty whether any
such milestones would be achieved at the time these licensing and collaboration
agreements were entered into. In addition, the Company evaluated whether the
development milestones met the remaining criteria to be considered substantive. As a
result of the Company’s analysis, the Company considers its development milestones to
be substantive and, accordingly, the Company expects to recognize as revenue future
payments received from such milestones as it achieves each milestone. The election to
adopt the milestone method did not impact the Company’s historical financial position
at April 1, 2011. This policy election may result in revenue recognition patterns for
future milestones that are materially different from those recognized for milestones
received prior to adoption. During the six months ended September 30, 2011, the Company
recognized into revenue $3.0 million received from Cilag
upon the achievement of developmental milestones during this period.
During the six months ended September 30, 2011, the Company
recognized a $7.0 million milestone payment it received from Amylin as there were no
remaining performance obligations under this agreement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Milestone payments received prior to April 1, 2011 from arrangements where the
Company has continuing performance obligations have been deferred and are recognized
through the application of a proportional performance model where the milestone payment
is recognized over the related performance period or, in full, when there are no
remaining performance obligations. The Company makes its best estimate of the period of
time for the performance period. The Company will continue to recognize milestone
payments received prior to April 1, 2011 in this manner. As of September 30, 2011, the
Company has deferred revenue of $5.0 million from milestone payments received prior to
April 1, 2011 that will be recognized ratably through 2018.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          In June 2011, the FASB issued guidance related to the presentation of
comprehensive income. This accounting standard (1) eliminates the option to present the
components of other comprehensive income as part of the statement of changes in
stockholders’ equity; (2) requires the consecutive presentation of the statement of net
income and other comprehensive income; and (3) requires an entity to present
reclassification adjustments on the face of the financial statements from other
comprehensive income to net income. The amendments in this accounting standard do not change the items
that must be reported in other comprehensive income or when an item of other
comprehensive income must be reclassified to net income nor do the amendments affect
how earnings per share is calculated or presented. This standard is required to be
applied retrospectively and is effective for fiscal years and interim periods within
those years beginning after December 15, 2011. As this accounting standard only
requires enhanced disclosure, the adoption of this standard will not impact the
Company’s financial position or results of operations.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. ACQUISITIONS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          On September 16, 2011, the Company acquired EDT from Elan in a transaction
accounted for under the acquisition method of accounting for business
combinations, in
exchange for $500.0 million in cash and 31.9 million
ordinary shares of Alkermes, valued at $525.1
million based on a stock price of $16.46 per share on the acquisition date. Under the
acquisition method of accounting, the assets acquired and liabilities assumed were recorded as of the acquisition date, at their respective fair values. The reported
consolidated financial condition and results of operations after completion of the
acquisition reflect these fair values. EDT’s results of operations are included in the
consolidated financial statements from the date of acquisition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Prior
to the acquisition, EDT, which was a division of Elan, developed and
manufactured pharmaceutical products that deliver clinical benefits to patients using
EDT’s experience and proprietary drug technologies in collaboration with other pharmaceutical
companies worldwide. EDT’s two principal drug technology platforms are the oral
controlled release platform (“OCR”) and the bioavailability enhancement platform,
including EDT’s <i>NanoCrystal</i><sup style="font-size: 85%; vertical-align: text-top">®</sup> technology. The Company acquired EDT to
diversify its commercialized
product portfolio and pipeline candidates, enhance its financial resources in
order to invest in its proprietary drug candidates, pursue additional growth
opportunities and reduce its cost of capital.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          During the six months ended September 30, 2011, the Company incurred approximately
$22.3 million in expenses related to the EDT acquisition which primarily consist of
banking, legal, accounting and valuation related expenses. These expenses have been
recorded within “Selling, general and administrative expense” in the accompanying
condensed consolidated statement of operations and comprehensive loss. During the three
and six months ended September 30, 2011, the Company’s results of operations included
revenues of $9.1 million and net income of $0.7 million from the acquired EDT business.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The purchase price of the EDT business was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Upfront payment in accordance with the merger agreement
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">500,000</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Equity consideration in accordance with the merger agreement
</div></td>
<td> </td>
<td> </td>
<td align="right">525,074</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total purchase price
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,025,074</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The purchase price allocation resulted in the following amounts being allocated to
the assets acquired and liabilities assumed at the acquisition date based upon their
respective fair values summarized below (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,038</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Receivables
</div></td>
<td> </td>
<td> </td>
<td align="right">57,408</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventory
</div></td>
<td> </td>
<td> </td>
<td align="right">29,670</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Prepaid expenses and other current assets
</div></td>
<td> </td>
<td> </td>
<td align="right">2,134</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Property plant and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">210,800</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquired identifiable intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">689,800</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">104,989</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">4,360</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accounts payable and accrued expenses
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19,048</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred tax liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(59,493</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other long-term liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(584</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,025,074</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Asset categories acquired in the EDT acquisition included working capital, fixed
assets and identifiable intangible assets, including IPR&D. The allocation of the
purchase price for the acquisition has been prepared on a preliminary basis and changes
to that allocation may occur as additional information becomes available.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The intangible assets acquired include the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Collaboration agreements
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">500,300</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">NanoCrystal technology
</div></td>
<td> </td>
<td> </td>
<td align="right">74,600</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">OCR technology
</div></td>
<td> </td>
<td> </td>
<td align="right">66,300</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">In-process research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">46,000</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademark
</div></td>
<td> </td>
<td> </td>
<td align="right">2,600</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">689,800</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          Intangible assets associated with collaboration agreements relate to the several
collaboration agreements EDT has in place with third-party pharmaceutical companies
related to the development and commercialization of products or an improvement to
existing products based on EDT’s experience with drug delivery systems and their
technology platforms. Intangible assets associated with IPR&D relate to various
preclinical EDT product candidates. The estimated fair value for the collaboration
agreements and IPR&D was determined using the excess earnings approach. The excess
earnings approach includes projecting revenue and costs attributable to the associated
collaboration agreement or product candidate and then subtracting the required return
related to other contributory assets used in the business to determine any residual
excess
earnings attributable to the collaboration agreement or product candidate. The
after-tax excess earnings are then discounted to present value using an appropriate
discount rate. The estimated useful life of the collaboration agreements is 12 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The NanoCrystal and OCR technologies are platform technologies that are used in
both currently marketed products and potential future products currently under
development. The estimated fair value was determined using the relief from royalty
method, an approach under which fair value is estimated to be the present value of
royalties saved because the Company owns the intangible assets and therefore does not
have to pay a royalty for its use. The estimated useful lives of the NanoCrystal and
OCR technologies are 13 and 12 years, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The estimated fair value of the EDT trademark was determined using the relief from
royalty method. The Company does not expect to use the EDT trademark beyond March 31,
2012, and as a result, the Company will amortize the full value of the trademark over
the remainder of the fiscal year.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The excess of purchase price over the fair value amounts assigned to the assets
acquired and liabilities assumed represents the goodwill amount resulting from the
acquisition. The Company does not expect any portion of this goodwill to be deductible
for tax purposes. The goodwill attributable to the acquisition of EDT has been recorded
as a noncurrent asset and is not amortized, but is subject to an annual review for
impairment. The factors that contributed to the recognition of goodwill included the
synergies that are specific to the Company’s business and not available to market
participants, including the Company’s unique ability to leverage its knowledge in the
areas of drug delivery and development of innovative medicines to improve patients’
lives, the acquisition of a talented workforce that brings translational medicine
expertise to the Company’s preclinical compounds and the Company’s ability to utilize
its research capacity to develop additional compounds using the acquired
technologies.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Pro forma financial information (unaudited)</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The following unaudited pro forma information presents the combined results of
operations for the three and six months ended September 30, 2011 and 2010 as if the
acquisition of EDT had been completed on April 1, 2010. The unaudited pro forma results
do not reflect any material adjustments, operating efficiencies or potential cost
savings which may result from the consolidation of operations but do reflect certain
adjustments expected to have a continuing impact on the combined results.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands, except per share data)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenues
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">121,090</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,359</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">244,049</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">210,688</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,881</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,008</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7,817</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(23,733</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic and diluted
loss per common
share
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.04</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.08</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.06</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.19</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:MarketableSecuritiesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. INVESTMENTS</b>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>Investments consist of the following:</td>
</tr>
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Gross Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Less than</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Greater than</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gains</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>One Year</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>One Year</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="18"><b>(In thousands)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:45px; text-indent:-15px"><b>September 30, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Short-term investments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Available-for-sale securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government and agency debt securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">78,030</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">91</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">78,121</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">International government agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">31,727</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">115</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,840</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">15,119</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,165</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">124,876</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">252</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125,126</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">1,201</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,201</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:75px; text-indent:-15px">Total short-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">126,077</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">252</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,327</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term investments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Available-for-sale securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government and agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">11,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,999</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">8,011</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">7,586</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Strategic investments
</div></td>
<td> </td>
<td> </td>
<td align="right">644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(96</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">548</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">19,655</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(97</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">19,133</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Held-to-maturity securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Certificates of deposit
</div></td>
<td> </td>
<td> </td>
<td align="right">5,440</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,440</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">417</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">417</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">5,857</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,857</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:75px; text-indent:-15px">Total long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">25,512</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(97</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">24,990</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">151,589</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">252</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(99</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">151,317</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td align="center">
<div style="margin-left:60px; text-indent:-15px"><b>March 31, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Short-term investments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Available-for-sale securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government and agency debt securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">117,298</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">129</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">117,426</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">20,973</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">21,017</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">International government agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">23,048</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">236</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,284</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">161,319</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">413</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">161,727</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">1,201</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,201</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:75px; text-indent:-15px">Total short-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">162,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">413</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">162,928</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term investments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Available-for-sale securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government and agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">57,709</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(804</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,905</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">International government agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">15,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(93</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,188</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">15,140</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(328</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">14,783</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Strategic investments
</div></td>
<td> </td>
<td> </td>
<td align="right">644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">675</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">88,774</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(926</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(328</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">87,551</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Held-to-maturity securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Certificates of deposit
</div></td>
<td> </td>
<td> </td>
<td align="right">5,440</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,440</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">417</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">417</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">5,857</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,857</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:75px; text-indent:-15px">Total long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">94,631</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(926</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(328</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">93,408</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">257,151</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">444</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(927</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(332</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">256,336</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company’s strategic investments include common stock in public companies with
which the Company has or had a collaborative arrangement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The proceeds from the sales and maturities of marketable securities, excluding
strategic equity investments, which were primarily reinvested and resulted in realized
gains and losses, were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Proceeds from the sales and maturities of marketable securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">240,363</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">276,437</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Realized gains
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">37</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">63</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Realized losses
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company’s available-for-sale and held-to-maturity securities at September 30,
2011 have contractual maturities in the following periods:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Available-for-sale</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Held-to-maturity</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Within 1 year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">72,733</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">72,897</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,857</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,857</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">After 1 year through 5 years
</div></td>
<td> </td>
<td> </td>
<td align="right">71,154</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,814</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">143,887</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">143,711</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,857</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,857</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          At September 30, 2011, the Company believes that the unrealized losses on its
available-for-sale investments are temporary. The investments with unrealized losses
consist primarily of corporate debt securities. In making the determination that the
decline in fair value of these securities was temporary, the Company considered various
factors, including but not limited to: the length of time each security was in an
unrealized loss position; the extent to which fair value was less than cost; financial
condition and near term prospects of the issuers; and the Company’s intent not to sell
these securities and the assessment that it is more likely than not that the Company
would not be required to sell these securities before the recovery of their amortized
cost basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company has an $8.5 million investment in a collaborative partner, Acceleron
Pharma, Inc. (“Acceleron”), which is recorded within “Other assets” in the accompanying
condensed consolidated balance sheets at September 30, 2011 and March 31, 2011. The
Company accounts for its investment in Acceleron under the cost method as Acceleron is
a privately-held company over which the Company does not exercise significant
influence. The Company will continue to monitor this investment to evaluate whether any
decline in its value has occurred that would be other-than-temporary, based on the
implied value from any recent rounds of financing completed by Acceleron, market prices
of comparable public companies and general market conditions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">          The Company’s investment in Civitas Therapeutics, Inc. (“Civitas”) was $0.9
million and $1.3 million at September 30, 2011 and March 31, 2011, respectively, which
is recorded within “Other assets” in the accompanying condensed consolidated balance
sheets. The Company accounts for its investment in Civitas under the equity method as
the Company has an approximately 11% ownership position in Civitas, has a seat on the
board of directors and believes it may be able to exercise significant influence over
the operating and financial policies of Civitas. During the six months ended September
30, 2011, the Company reduced its investment in Civitas by $0.4 million, which
represented the Company’s proportionate share of Civitas’ net losses for this period.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. FAIR VALUE MEASUREMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table presents information about the Company’s assets and
liabilities that are measured at fair value on a recurring basis and indicates the fair
value hierarchy of the valuation techniques the Company utilized to determine such fair
value:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,201</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,201</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government and agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">89,120</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">89,120</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">International government agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">31,840</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,840</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">22,751</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,045</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,706</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Strategic equity investments
</div></td>
<td> </td>
<td> </td>
<td align="right">548</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">548</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate cap contract
</div></td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">145,472</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">122,709</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21,057</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,706</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate swap contract
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">388</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">388</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">388</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">388</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr> <td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,303</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,303</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government and agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">174,331</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">174,331</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">35,801</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34,754</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,047</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">International government agency debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">38,471</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38,471</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Strategic equity investments
</div></td>
<td> </td>
<td> </td>
<td align="right">675</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">675</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">250,581</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">214,780</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">34,754</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,047</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     There were no transfers or reclassifications of any securities between Level 1 and
Level 2 during the six months ended September 30, 2011. The following table illustrates
the rollforward of the fair value of the Company’s investments whose fair value is
determined using Level 3 inputs:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, April 1, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,047</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments transferred into Level 3
</div></td>
<td> </td>
<td> </td>
<td align="right">728</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total unrealized losses included in comprehensive loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, September 30, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,706</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the six months ended September 30, 2011, there was one investment in
corporate debt securities transferred into Level 3 from Level 2 as trading in this
security ceased during the period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2011, the Company entered into an interest rate cap and an interest
rate swap agreement, which are described in greater detail in Note 11, <i>Derivative
Instruments</i>. The fair value of the Company’s interest rate cap and interest rate swap
agreements were based on an income approach, which excludes accrued interest, and takes into
consideration then-current interest rates and then-current creditworthiness of the Company or the
counterparty, as applicable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Substantially all of the Company’s corporate debt securities have been classified
as Level 2. These securities were initially valued at the transaction price and
subsequently valued, at the end of each reporting period, utilizing market observable
data. The market observable data includes reportable trades, benchmark yields, credit
spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and
economic events. The Company validates the prices developed using the market observable
data by obtaining market values from other pricing sources, analyzing pricing data in
certain instances and confirming that the relevant markets are active.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The
Company’s Level 3 investments at September 30, 2011 consist
of two investments in corporate
debt securities. The Company used a discounted cash flow model to determine the
estimated fair value of these securities. The assumptions used in the discounted
cash
flow model included estimates for interest rates, timing of cash flows, expected
holding periods and risk adjusted discount rates, which include provisions for default
and liquidity risk, which the Company believes to be the most critical assumptions
utilized within the analysis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The carrying amounts reflected in the condensed consolidated balance sheets for
cash and cash equivalents, accounts receivable, other current assets, accounts payable
and accrued expenses approximate fair value due to their short-term nature. The fair
value of the remaining financial instruments not currently recognized at fair value on
the Company’s condensed consolidated balance sheets consist of the Term Loans. The
estimated fair value of the Term Loans, which was based on quoted market price
indications, is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">First Lien Term Loan
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">306,951</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">302,250</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Second Lien Term Loan
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">137,233</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">137,200</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:InventoryDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. INVENTORY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Inventory is stated at the lower of cost or market value. Cost is determined using
the first-in, first-out method. Inventory consists of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">13,886</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Work in process
</div></td>
<td> </td>
<td> </td>
<td align="right">12,131</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,843</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">20,719</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,127</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Consigned-out inventory (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">382</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">355</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total inventory
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">47,118</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20,425</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>At September 30, 2011 and March 31, 2011, the Company had $1.8 million and $2.0
million, respectively, of finished goods inventory located at its third party
warehouse and shipping service provider.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>At September 30, 2011 and March 31, 2011, consigned-out inventory relates to VIVITROL
inventory in the distribution channel for which the Company has not recognized
revenue.</td>
</tr>
</table>
</div>
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<!-- Begin Block Tagged Note 7 - us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. PROPERTY, PLANT AND EQUIPMENT</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Property, plant and equipment consist of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Land
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,572</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">301</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Building and improvements
</div></td>
<td> </td>
<td> </td>
<td align="right">144,606</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36,792</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Furniture, fixture and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">168,771</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,660</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Leasehold improvements
</div></td>
<td> </td>
<td> </td>
<td align="right">45,179</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">44,779</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction in progress
</div></td>
<td> </td>
<td> </td>
<td align="right">37,749</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">42,194</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td> </td>
<td align="right">400,877</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">186,726</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: accumulated depreciation
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(96,266</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(91,706</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total property, plant and equipment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">304,611</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">95,020</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. GOODWILL AND INTANGIBLE ASSETS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Intangible assets consist of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>September 30, 2011</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Net</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortizable Life</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Carrying Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Carrying Amount</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finite-lived intangible assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Collaboration agreements
</div></td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">500,300</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,273</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">499,027</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">NanoCrystal technology
</div></td>
<td> </td>
<td> </td>
<td align="right">13</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,600</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(131</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">74,469</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">OCR technology
</div></td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">66,300</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(227</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">66,073</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Trademark
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,600</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(186</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,414</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total finite-lived intangible assets
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">643,800</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,817</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">641,983</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Indefinite-lived intangible assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">IPR&D
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,000</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">689,800</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,817</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">687,983</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The
Company recorded goodwill of $105.0 million in September 2011 in
connection with the acquisition of EDT. There were no changes to the initial carrying
amount of the Company’s goodwill during the three months ended September 30, 2011. The
Company recorded $1.8 million of amortization expense related to its intangible assets
during the six months ended September 30, 2011. Based upon the Company’s most recent
analysis, amortization of intangible assets included within its consolidated balance
sheet as of September 30, 2011, is expected to be in the range of approximately $42.0
million to $76.0 million annually through fiscal year 2017.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Accounts payable and accrued expenses consist of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accounts payable
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">15,396</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,269</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued compensation
</div></td>
<td> </td>
<td> </td>
<td align="right">17,421</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,481</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued other
</div></td>
<td> </td>
<td> </td>
<td align="right">50,933</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,184</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total accounts payable and accrued expenses
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,750</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,934</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - us-gaap:LongTermDebtTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10. LONG-TERM DEBT</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Long-term debt consists of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
</tr>
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<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">First Lien Term Loan, due September 16, 2017
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">306,951</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Second Lien Term Loan, due September 16, 2018
</div></td>
<td> </td>
<td> </td>
<td align="right">137,233</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">444,184</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Less: current portion
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,325</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Long-term debt
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">441,859</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On September 16, 2011, the Company entered into the Term Loans with certain
of its subsidiaries, as guarantors, Morgan Stanley Senior Funding, Inc., (“MSSF”) as
administrative agent and as collateral agent, MSSF and
HSBC Securities (USA) Inc., (“HSBC”) as co-syndication agents, joint lead arrangers and
joint bookrunners, and various other financial institutions, as lenders. The First
Lien Term Loan was issued with an original issue discount of $3.1 million, has a term
of six years and is secured by a first priority lien on substantially all of the
assets and properties of the Company and the guarantors. The Second
Lien Term Loan was issued with an original issue discount of $2.8 million, has a term
of seven years and is secured by a second priority lien on substantially all of the
assets and properties of the Company and the guarantors.
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Scheduled maturities with respect to the Term Loans are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Fiscal Year:</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
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<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2012
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">775</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2013
</div></td>
<td> </td>
<td> </td>
<td align="right">3,100</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2014
</div></td>
<td> </td>
<td> </td>
<td align="right">3,100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2015
</div></td>
<td> </td>
<td> </td>
<td align="right">3,100</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2016
</div></td>
<td> </td>
<td> </td>
<td align="right">3,100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Thereafter
</div></td>
<td> </td>
<td> </td>
<td align="right">436,825</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">450,000</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The initial applicable margin for borrowings under the First Lien Term Loan will
be three-month LIBOR plus 5.25% with respect to LIBOR borrowings and 4.25% with respect to
base rate borrowings. The initial applicable margin for borrowings under the Second
Lien Term Loan will be three-month LIBOR plus 8.00% with respect to LIBOR borrowings and
7.00% with respect to base rate borrowings. Under each of the Term Loans, LIBOR is subject to
an interest rate floor of 1.50% and the base rate is subject to an interest rate floor
of 2.50%. Commencing with completion of the Company’s first fiscal quarter ending after
the Merger, the applicable margin under the First Lien Term Loan is subject to
adjustment each fiscal quarter, based upon meeting a certain consolidated leverage
ratio during the preceding quarter. The applicable margin under the Second Lien Term
Loan is not subject to adjustment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Required quarterly principal payments of $0.8 million on the First Lien Term Loan
begin on March 31, 2012. The principal amount of the Second Lien Term Loan is due and
payable in full on the maturity date. The Company may make prepayments of principal
without penalty; however, no principal payments may be made on the Second Lien Term
Loan until the First Lien Term Loan has been repaid in full. If prepayments are made
prior to September 16, 2012, the Company may be subject to prepayment premium of 1% of
the amount of the term loans being repaid if the prepayment is made in connection with
a refinancing transaction or 1% of the amount of the outstanding term loans if the
prepayment is made in connection with an amendment to the agreement resulting in a
refinancing transaction.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Each
of the Term Loans has incremental capacity in an amount of
$50.0 million, plus additional amounts so long as Alkermes meets certain conditions,
including a specified leverage ratio. The agreements governing the
Term Loans
include a number of restrictive covenants that, among other things, and subject to
certain exceptions and baskets, impose operating and financial restrictions on
Alkermes, Inc., the Company and the restricted subsidiaries. These financing
agreements also contain customary affirmative covenants and events of default. The
Company was in compliance with its debt covenants at September 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As
part of the Term Loans, the Company is required to enter into and
thereafter maintain hedge agreements to the extent necessary to provide that at least
50% of the aggregate principal amount of the Term Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than three years.
Pursuant to this term, the Company entered into an interest rate cap and an interest
rate swap agreement, which are discussed in greater detail in Note 11, <i>Derivative
Instruments</i>.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company incurred $11.8 million of offering costs associated with the issuance
of the Term Loans which were recorded under the caption “Other assets” in the
accompanying condensed consolidated balance sheets. The offering costs and original
issue discount related to the Term Loans are being amortized to interest expense over
the estimated repayment terms using the effective interest method. During the six
months ended September 30, 2011, the Company had amortization expense of $0.3 million
related to the offering costs and original issue discount.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>11. DERIVATIVE INSTRUMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three months ended September 30, 2011, the Company entered into an
interest rate cap agreement with HSBC Bank USA at a cost of less than $0.1 million to
mitigate the impact of fluctuations in the three-month LIBOR rate at
which the
Company’s Term Loans bear interest. The interest rate cap agreement became
effective upon the issuance of the Term Loans, expires in December 2012, has a notional
value of $65.0 million and is not designated as a hedging instrument. The Company
recorded an immaterial amount of loss as other expense in the accompanying condensed
consolidated statements of operations and comprehensive loss due to the decline in
value of this contract during the three and six months ended September 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three months ended September 30, 2011, the Company entered into an
interest rate swap agreement with Morgan Stanley Capital Services LLC (“MSCS”) to
mitigate the impact of fluctuations in the three-month LIBOR rate at
which the Company’s
Term Loans bear interest. The interest rate swap agreement becomes effective in
December 2012, expires in
December 2014 and has a notional value of $65.0 million. This
contract has been designated as a cash flow hedge and accordingly, to the extent
effective, any unrealized gains or losses on this interest rate swap contract is
reported in accumulated other comprehensive loss. To the extent the hedge is
ineffective, hedge transaction gains and losses are reported in other income (expense),
net when the interest payment on the related debt is recognized.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the fair value and presentation in the consolidated
balance sheets for derivatives designated and not designated as hedging instruments:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Value at</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Balance Sheet Location</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><i>Interest rate swap</i>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Liability derivative designated as a cash flow hedge
</div></td>
<td> </td>
<td colspan="3" align="center">Other long-term liabilities</td>
<td> </td>
<td align="left">$</td>
<td align="right">388</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><i>Interest rate cap</i>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset derivative not designated as a hedging instrument
</div></td>
<td> </td>
<td colspan="3" align="center">Other long-term assets</td>
<td> </td>
<td align="left">$</td>
<td align="right">11</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the effect of derivatives designated as hedging
instruments on the condensed consolidated statements of operations and comprehensive
loss:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Reclassified from</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Comprehensive Loss</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount of</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Comprehensive Loss</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>into Earnings</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss Recorded</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Ineffective Portion)</b></td>
<td> </td>
</tr>
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<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">September 30, 2011
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(245</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The cash flow hedge was deemed to be perfectly effective at September 30,
2011. Accordingly, the Company included the loss incurred during the three and six
months ended September 30, 2011 within accumulated other comprehensive loss. The
Company expects that when this contract matures, any amounts in accumulated other
comprehensive loss is to be reported as an adjustment to interest expense. The Company
considers the impact of its and MSCS’ credit risk on the fair value of the contract as
well as the ability of each party to execute its obligations under the contract. As of
September 30, 2011, credit risk did not materially change the fair value of the
Company’s interest rate swap contract.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>12. SHARE-BASED COMPENSATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Share-based compensation expense consists of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of goods manufactured and sold
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">529</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">525</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,085</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">886</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">2,309</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,637</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,244</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,152</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Selling, general and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">4,214</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,786</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,383</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,366</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total share-based compensation expense
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,052</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,948</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,712</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,404</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At September 30, 2011 and March 31, 2011, $0.5 million and $0.6 million,
respectively, of share-based compensation cost was capitalized and recorded as
Inventory in the condensed consolidated balance sheets.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 13 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>13. LOSS PER SHARE</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic loss per common share is calculated based upon net loss available to holders
of common shares divided by the weighted average number of shares outstanding. Diluted
loss per common share is based upon the weighted-average number of common shares
outstanding during the period plus additional weighted-average common equivalent shares
outstanding during the period when the effect is dilutive. Common equivalent shares
result from the assumed exercise of outstanding stock options (the proceeds of which
are then assumed to have been used to repurchase outstanding stock using the treasury
stock method) and the vesting of unvested restricted stock units. Common equivalent shares have not been included in the net loss per common share calculations because the
effect would have been anti-dilutive.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The potential common equivalent shares consisted of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Stock options
</div></td>
<td> </td>
<td> </td>
<td align="right">8,084</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,076</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,736</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units
</div></td>
<td> </td>
<td> </td>
<td align="right">1,457</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">909</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,555</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">850</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">9,541</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,807</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,631</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,586</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 14 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>14. INCOME TAXES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company recorded an income tax provision of $3.7 million and $3.6 million for
the three and six months ended September 30, 2011, respectively, and an income tax
benefit of $0.9 million and $1.0 million for the three and six months ended September
30, 2010, respectively. During the three months ended September 30, 2011, the Company
recorded a $13.2 million current tax expense for the taxable transfer of the
BYDUREON<sup style="font-size: 85%; vertical-align: text-top">®</sup> intellectual property from the U.S. to Ireland and a deferred tax
benefit of $9.5 million in connection with the Business Combination, as the Company recorded a
U.S. deferred tax liability in purchase accounting allowing for the partial release of
an existing valuation allowance.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company records a deferred tax asset or liability based on the difference
between the financial statement and tax basis of its assets and liabilities, as
measured by enacted jurisdictional tax rates assumed to be in effect when these
differences reverse. At September 30, 2011, the Company determined that it is more
likely than not that its U.S. and Irish deferred tax assets may not be realized and a
full valuation allowance has been recorded.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 15 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>15. COMMITMENTS AND CONTINGENCIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company and/or the Company’s product partners are involved in various
so-called “Paragraph IV” litigation proceedings in the U.S. In the U.S., putative
generics of innovator drug products (including products in which the innovation
comprises a new drug delivery method for an existing product, such as the drug
delivery market occupied by the Company) may file Abbreviated New Drug
Applications (“ANDAs”) and, in doing so, they are not required to include
preclinical and clinical data to establish safety and effectiveness of their
drug. Instead, they would rely on such data provided by the New Drug Application
(“NDA”) held with respect to the innovator drug. However, to benefit from this
less costly abbreviated procedure, the ANDA applicant must demonstrate that its
drug is “generic” or “bioequivalent” to the innovator drug, and, to the extent
that patents protecting the innovator drug are listed in the “Orange Book”, the
ANDA applicant must write to the holder of the NDA for the innovator drug and the
patent holder (to the extent that the Orange Book-listed patents are not owned by
the holder of the NDA for the innovator drug) certifying that their product
either does not infringe the innovator’s and patent holder’s patents and/or that
the relevant patents are invalid. The innovator and the patent holder may sue the
ANDA applicant within 45 days of receiving the certification and, if they do so,
the U.S. Food and Drug Administration may not approve the ANDA for 30 months from
the date of certification unless, at some point before the expiry of those 30
months, a court makes a final decision in the ANDA applicant’s favor.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company is involved in
various sets of Paragraph IV litigations in the U.S. and similar suits
in Canada and France in respect of five different products: TriCor, Focalin
XR, Avinza, Luvox CR, and Megace ES either as plaintiff or
as an interested party (where the suit is being brought in the name of one of our collaborators).
</div>
</div>
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--03-31
Q2
2012
2011-09-30
10-Q
0001520262
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