To date, Achillion's internal drug discovery has proven fruitful. ACH-806, although now a discontinued program, along with the others in the series of NS4A antagonists active against the Hepatitis C virus, were discovered in-house. ACH-702, the Company's lead antibacterial candidate, was also discovered through internal efforts. Achillion intends to continue applying its deep understanding of virology, microbiology and synthetic chemistry to expand its product candidate portfolio.

From early lead identification through clinical candidate selection, Achillion has coupled its knowledge base in genomic replication targets with an integrated drug discovery infrastructure to aid in the rapid advancement of its discovery programs.

Target Selection and Assay Development - Achillion is focused on addressing unmet medical needs in infectious diseases, with an emphasis on inhibiting viral and bacterial proteins essential for genomic replication. The Company selects targets for its drug discovery programs based upon the relevance of the target to key steps within the viral or bacterial replication cycle, its ability to develop appropriate assays for early assessment of potency, selectivity and safety and confidence in its ability to identify small molecules that can be optimized within a reasonable time period to become drug candidates. Achillion has developed proprietary assays for identification and optimization of small molecule inhibitors of viral and bacterial genomic replication.

Compound Synthesis, Hit Identification and Lead Optimization - Achillion's focused compound library contains a diverse set of molecules that have been synthesized for the principal purpose of inhibiting genomic replication in viruses and bacteria. The Company has developed the following discovery tools that enable management of its compounds efficiently and advance its discovery programs:

1. AACP (Achillion Automated Chemistry Platform) is a proprietary software program that facilitates medium and high throughput synthesis of compounds. AACP allows the synthesis of thousands of small molecules in support of the Company's drug discovery programs.
2. CART (Compound Acquisition and Repository Tracking) is a software tool that streamlines Achillion scientists' ability to select and acquire compounds for lead identification. CART is integrated with computational chemistry tools and a virtual database of greater than two million small molecules.
3. CHEM-ACH is a data mining software that allows compounds synthesized at Achillion to be cross-referenced against biological activities associated with them. Structure-activity relationships are elaborated with CHEM-ACH, greatly facilitating design and synthesis of compounds for lead optimization.
4. D2P2 (Drug Design through Pharmacophore Perception) is a software application that allows Achillion scientists to study interactions between a drug target and its inhibitors in three dimensions. D2P2 has facilitated lead optimization in the Company's HCV program.

Preclinical Candidate Selection - A cornerstone of Achillion's approach to drug discovery and development is the early assessment of the drug-like properties associated with optimized lead compounds. Potency and activity against a given target are necessary but not sufficient predictors of eventual successful clinical development of a new drug. In order to perform an early assessment of the potential for successful development, prior to progression of a compound into late-stage preclinical studies in support of clinical trials, the Company aggressively evaluates compounds in numerous tests relating to safety, metabolism, pharmacokinetic properties and physical properties associated with the feasibility for an oral formulation.