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Delaware		2835		04-3030815
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

William T. Whelan, Esq. Daniel T. Kajunski, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. One Financial Center Boston, Massachusetts 02111 (617) 542-6000		Michael G. Kauffman, M.D., Ph.D. Predix Pharmaceuticals Holdings, Inc. 4 Maguire Road Lexington, Massachusetts 02421 (781) 372-3260		Lawrence S. Wittenberg, Esq. Edward A. King, Esq. Goodwin Procter LLP Exchange Place Boston, Massachusetts 02109 (617) 570-1000

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The information in this joint proxy statement/ prospectus is not complete and may be changed. The securities being offered by the use of this joint proxy statement/ prospectus may not be issued until the registration statement filed with the Securities and Exchange Commission, of which this proxy statement and prospectus is a part, is declared effective. This joint proxy statement/ prospectus is not an offer to sell these securities nor a solicitation of any offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

For EPIX stockholders:           , 2006 10:00 a.m., local time Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, Massachusetts 02111		For Predix stockholders:           , 2006 9:00 a.m., local time Goodwin Procter LLP Exchange Place Boston, Massachusetts 02109

Andrew C.G. Uprichard, M.D. President and Chief Operating Officer EPIX Pharmaceuticals, Inc.		Michael G. Kauffman, M.D., Ph.D. Chief Executive Officer Predix Pharmaceuticals Holdings, Inc.

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	EPIX Pharmaceuticals, Inc.
	Attn: Investor Relations
	161 First Street
	Cambridge, Massachusetts 02142
	(617) 250-6000
	E-mail: ahedison@epixpharma.com

	Predix Pharmaceuticals Holdings, Inc.
	Attn: Investor Relations
	4 Maguire Road
	Lexington, Massachusetts 02421
	(781) 372-3260
	E-mail: investors@predixpharm.com

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	1. To consider and vote upon the issuance of shares of EPIX common stock in the merger as contemplated by the Agreement and Plan of Merger, dated as of April 3, 2006, as amended, by and among EPIX Pharmaceuticals, Inc., EPIX Delaware, Inc., a wholly-owned subsidiary of EPIX, and Predix Pharmaceuticals Holdings, Inc., and approve the merger of Predix Pharmaceuticals Holdings, Inc. with and into EPIX Delaware, Inc.;
	2. To approve an amendment to EPIX’s amended and restated certificate of incorporation to increase the number of authorized shares of common stock from 40,000,000 shares to 100,000,000 shares, representing an additional 60,000,000 shares, which may be necessary to provide EPIX with sufficient authorized shares of common stock to issue in connection with the merger and is described in the joint proxy statement/ prospectus;
	3. To authorize the EPIX board of directors to amend in its discretion EPIX’s restated certificate of incorporation to effect a reverse stock split of EPIX’s issued and outstanding shares of common stock, at such ratio between 1:1.25 to 1:4 to be determined by the EPIX board of directors, which may be necessary for EPIX to maintain its eligibility for trading on The NASDAQ Global Market after completion of the merger, which is a condition to consummate the merger, as described in this joint proxy statement/prospectus;
	4. To elect two directors for a three-year term to expire at the 2009 annual meeting of stockholders and to elect one director for a one-year term to expire at the 2007 annual meeting of stockholders; provided, however, that, if the merger is completed, the EPIX board of directors will consist of the nine persons identified in the joint proxy statement/ prospectus;
	5. To ratify the selection of Ernst & Young LLP as EPIX’s independent registered public accounting firm for the fiscal year ending December 31, 2006;
	6. To consider and vote on a proposal to approve the adjournment of the annual meeting, if necessary, to solicit additional proxies, in the event that there are not sufficient votes at the time of the annual meeting to approve Proposal Nos. 1, 2 and 3; and
	7. To transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

	By Order of the Board of Directors,
	President and Chief Operating Officer
	EPIX Pharmaceuticals, Inc.

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	1. To consider and vote on a proposal to approve and adopt the Agreement and Plan of Merger, dated as of April 3, 2006, as amended, by and among EPIX Pharmaceuticals, Inc., EPIX Delaware, Inc., a wholly-owned subsidiary of EPIX, and Predix Pharmaceuticals Holdings, Inc., and approve the merger of Predix Pharmaceuticals Holdings, Inc. with and into EPIX Delaware, Inc.;
	2. To consider and vote on a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to approve and adopt the merger agreement and to approve the merger; and
	3. To transact such other business as may properly come before the special meeting or any adjournment or postponement thereof.

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	By Order of the Board of Directors,
	President and Chief Executive Officer
	Predix Pharmaceuticals Holdings, Inc.

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			Page
QUESTIONS AND ANSWERS ABOUT THE MERGER				v
SUMMARY OF THE JOINT PROXY STATEMENT/ PROSPECTUS				1
	The Companies			1
	Risks Associated with the Merger and the Combined Company, EPIX and Predix			2
	Stockholder Meetings			2
	Recommendation to Stockholders			3
	Fairness Opinion Received by EPIX			4
	Voting Agreements			4
	Interests of EPIX’s Directors and Management			4
	Interests of Predix’s Directors and Management			4
	The NASDAQ Global Market Listing			5
	Completion and Effectiveness of the Merger			5
	Restrictions on Solicitation of Alternative Transactions by EPIX and Predix			5
	Conditions to the Completion of the Merger			6
	Termination of the Merger Agreement and Payment of Certain Termination Fees			6
	United States Federal Tax Consequences of the Merger			6
	Accounting Treatment of the Merger			6
	Appraisal Rights			6
	Exchange of Predix Stock Certificates			6
	Regulatory Approvals			6
	Restrictions on the Ability to Sell EPIX Common Stock			7
	Comparison of EPIX and Predix Stockholder Rights			7
EPIX SELECTED HISTORICAL FINANCIAL INFORMATION				8
PREDIX SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION				9
EPIX AND PREDIX UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS				10
COMPARATIVE PER SHARE DATA				18
MARKET PRICE AND DIVIDEND INFORMATION				19
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS				20
RISK FACTORS				21
	Risks Relating to the Merger			21
	Risks Relating to the Combined Company			26
THE ANNUAL MEETING OF EPIX STOCKHOLDERS				55
THE SPECIAL MEETING OF PREDIX STOCKHOLDERS				59
THE MERGER				62
	General Description of the Merger			62
	Background of the Merger			63
	EPIX’s Reasons for the Merger			71
	Recommendation of EPIX’s Board of Directors			73
	Opinion of EPIX’s Financial Advisor			74
	Predix’s Reasons for the Merger			80
	Recommendation of Predix’s Board of Directors			82
	Accounting Treatment			82

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			Page
	Material United States Federal Income Tax Consequences of the Merger			83
	Appraisal Rights			86
	Federal Securities Laws Consequences			87
	Interests of EPIX’s Directors and Management			87
	Interests of Predix’s Directors and Management			87
	The NASDAQ Global Market Listing			88
THE MERGER AGREEMENT				89
	Structure of the Merger			89
	Effective Time of the Transaction			89
	Officers and Directors			89
	Conversion of Predix Shares			89
	The Exchange Ratio and Milestone Payment			89
	Stock Options and Warrants			91
	Fractional Shares			91
	Surrender of Predix Certificates			91
	United States Tax Consequences			92
	Representations and Warranties			92
	Conduct of Business Prior to the Completion of the Merger			92
	No Solicitation			93
	Additional Agreements			94
	Continuing Obligation to Convene Stockholders’ Meeting			95
	Confidentiality			95
	Regulatory Filings			95
	Notification of Certain Matters			95
	Indemnification			96
	Listing of EPIX Common Stock			96
	Public Announcements			96
	Taxes			96
	Severance Payments			97
	EPIX Board of Directors			97
	Treatment as Reorganization			97
	Conditions to the Completion of the Merger			97
	Termination of the Merger Agreement			99
	Notice/ Effect of Termination			100
	Fees and Expenses			100
	Amendment and Waiver			101
	Amendment No. 1			101
THE VOTING AGREEMENTS				102
MANAGEMENT OF EPIX AFTER THE MERGER				103
CURRENT MANAGEMENT OF EPIX AND RELATED INFORMATION				109
CURRENT MANAGEMENT OF PREDIX AND RELATED INFORMATION				122
EPIX’S BUSINESS				136
	Overview			136
	Recent Events			136

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			Page
	EPIX Technology			138
	Products Under Development			138
	Use of Vasovist with MRI and Magnetic Resonance Angiography Technology			140
	Strategic Alliances and Collaborations			142
	Competition			145
	Patents and Proprietary Rights			145
	Contractual Disputes			147
	Manufacturing			147
	Government Regulation			147
	Reimbursement			149
	Employees			149
	Research and Development			150
	Legal Proceedings			150
EPIX MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				151
EPIX PRINCIPAL STOCKHOLDERS				166
PREDIX’S BUSINESS				169
	Overview			169
	G-Protein Coupled Receptors and Ion Channels as Drug Targets			171
	Complexities of Traditional G-Protein Coupled Receptor and Ion Channel Drug Discovery			172
	Predix’s G-Protein Coupled Receptor and Ion Channel Drug Discovery Technology and Approach			173
	Predix’s Strategy			174
	Predix’s Drug Development Programs			176
	PRX-00023 for Anxiety and Depression			176
	PRX-03140 for Alzheimer’s Disease			180
	PRX-08066 for Pulmonary Hypertension			183
	PRX-07034 for Obesity and Cognitive Impairment			186
	Predix’s Pre-clinical and Discovery Programs			186
	Predix’s Drug Discovery Technology and Approach			187
	Technology License Agreement with Ramot			189
	Collaboration with Cystic Fibrosis Foundation Therapeutics Incorporated			190
	Competition			190
	Marketing, Sales and Distribution			191
	Manufacturing			192
	Intellectual Property			192
	Government Regulation and Product Approval			193
	Reimbursement			196
	Employees			196
	Properties			196
	Legal Proceedings			196
PREDIX MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				197
PREDIX PRINCIPAL STOCKHOLDERS				214
DESCRIPTION OF EPIX CAPITAL STOCK				218

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		Page
COMPARISON OF RIGHTS OF HOLDERS OF EPIX COMMON STOCK AND PREDIX COMMON STOCK			219
EPIX ANNUAL MEETING PROPOSAL NO. 1 — APPROVAL OF THE ISSUANCE OF EPIX COMMON STOCK IN THE MERGER AND APPROVAL OF THE MERGER			227
EPIX ANNUAL MEETING PROPOSAL NO. 2 — AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK			228
EPIX ANNUAL MEETING PROPOSAL NO. 3 — AUTHORIZATION OF THE EPIX BOARD OF DIRECTORS TO EFFECT A REVERSE STOCK SPLIT			230
EPIX ANNUAL MEETING PROPOSAL NO. 4 — ELECTION OF EPIX DIRECTORS			236
EPIX ANNUAL MEETING PROPOSAL NO. 5 — RATIFICATION OF SELECTION OF EPIX’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			237
EPIX ANNUAL MEETING PROPOSAL NO. 6 — APPROVAL OF POSSIBLE ADJOURNMENT OF ANNUAL MEETING			239
PREDIX SPECIAL MEETING PROPOSAL NO. 1 — APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE MERGER			240
PREDIX SPECIAL MEETING PROPOSAL NO. 2 — APPROVAL OF POSSIBLE ADJOURNMENT OF SPECIAL MEETING			241
EXPERTS			242
LEGAL MATTERS			242
STOCKHOLDER PROPOSALS			242
WHERE YOU CAN FIND MORE INFORMATION			243
INDEX TO FINANCIAL STATEMENTS			F-1
The following annexes also constitute part of this joint proxy statement/ prospectus:
Annex A Agreement and Plan of Merger, as amended			A-1
Annex B Form of Voting Agreement between EPIX Pharmaceuticals, Inc. and certain stockholders of Predix Pharmaceuticals Holdings, Inc.			B-1
Annex C Opinion of Needham & Company, LLC			C-1
Annex D Relevant Sections of the General Corporation Law of the State of Delaware			D-1
Ex-23.1 Consent of Ernst & Young LLP/EPIX
Ex-23.2 Consent of Ernst & Young LLP/Predix
Ex-99.3 Form of EPIX Pharmaceuticals Proxy Card
Ex-99.4 Form of Predix Pharmaceuticals Holdings, Inc. Proxy Card
Ex-99.9 Consent of Robert J. Perez

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Q:		Why are EPIX and Predix proposing the merger? (See pages 71 and 80)
A:		EPIX and Predix are proposing the merger because they believe the resulting combined company will be a stronger, more diverse company with more growth potential than either company would have separately.

		EPIX and Predix believe that the merger may result in a number of benefits, including:
		• a broader, more balanced portfolio of product candidates, with significant market potential;
		• the opportunity for each company’s stockholders to participate in the potential growth of the combined company after the merger; and
		• a seasoned management team and significant financial resources.

Q:		Why am I receiving this joint proxy statement/ prospectus?
A:		You are receiving this joint proxy statement/ prospectus because you have been identified as a stockholder of either EPIX or Predix, and thus you are entitled to vote at EPIX’s annual meeting or Predix’s special meeting, as the case may be. This document serves as both a joint proxy statement of EPIX and Predix, used to solicit proxies for the stockholder meetings, and as a prospectus of EPIX, used to offer shares of EPIX common stock in exchange for shares of Predix common stock and preferred stock pursuant to the terms of the merger agreement. This document contains important information about the merger and the stockholder meetings of EPIX and Predix, and you should read it carefully.
Q:		What will a Predix stockholder receive in exchange for Predix stock in the merger? (See pages 62 and 89)
A:		Each Predix stockholder will receive 1.239411 shares of EPIX common stock, subject to adjustment to account for the reverse stock split if implemented, for each share of Predix common stock or preferred stock (on an as-converted to Predix common stock basis) that they own, and cash in lieu of fractional shares. We refer to this as the “exchange ratio.” In approving the merger agreement, the holders of Predix preferred stock will be agreeing to accept the merger consideration as set forth in the merger agreement in lieu of any liquidation preferences that they would be entitled to under the Predix restated certificate of incorporation, as amended, prior to the consummation of the merger.
		In addition, EPIX will make a milestone payment to Predix stockholders, option holders and warrant holders in an aggregate amount of $35 million upon the occurrence of certain events. EPIX may elect to make the milestone payment in cash or shares of EPIX common stock, or any combination thereof. The milestone payment will be allocated and paid to each holder of Predix shares, options and warrants at the time of the merger, on a pro rata basis assuming that each Predix warrant and option (whether or not vested) was exercised in full immediately prior to the merger.

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		In no event will the shares of EPIX common stock issuable at the effective time of the merger, including the shares of EPIX common stock issuable upon exercise of Predix options and warrants assumed by EPIX in the merger, exceed 49.99% of the outstanding EPIX common stock immediately after the effective time of the merger. In addition, in no event may the milestone be paid in shares of EPIX common stock to the extent that such shares would exceed 49.99% of the outstanding shares of EPIX common stock immediately after such milestone payment, when combined with all shares of EPIX common stock issued in the merger and issuable upon exercise of all Predix options and warrants assumed by EPIX in the merger.

A:	Predix stockholders, option holders and warrant holders will receive the milestone payment within 90 days following the occurrence, as determined by the non-Predix members of the combined company’s board of directors, of any of the following events between the date of this joint proxy statement/ prospectus and June 30, 2008:

	•	receipt of statistically significant final results from a randomized, placebo- or active comparator controlled, double-blinded Phase II or Phase III clinical trial of:
	•	PRX-00023 for the treatment of generalized anxiety disorder, depression, attention-deficit hyperactivity disorder or other neuropsychiatric disorder with at least 100 patients;
	•	PRX-03140 for the treatment of Alzheimer’s disease or other cognitive disorders with at least 60 patients;
	•	PRX-08066 for the treatment of pulmonary artery hypertension, chronic obstructive pulmonary disease or a different indication with at least 60 patients;
	•	PRX-07034 for the treatment of obesity, cognitive disorders or a different indication with at least 60 patients; or
	•	entering into a strategic partnership for any Predix drug candidate, which provides milestone and research funding payments of more than $50 million, of which $20 million must be in unrestricted cash received by June 30, 2008 through non-refundable license fees, research funding payments, and/or premiums paid in connection with an equity investment by the strategic partner within 60 days following entry into the strategic partnership.

Q:	If triggered, when will the milestone payment be made? (See pages 62 and 90)
A:	The milestone payment will be paid within 90 days after the achievement of a milestone event, at the option of the non-Predix members of the combined company’s board of directors either:

	•	in cash, shares of EPIX common stock or any combination thereof with the number of such shares to be issued determined based on the five-day average closing price of EPIX common stock on The NASDAQ Global Market ending on the trading day that is ten days prior to the payment date; or
	•	$20 million payable in accordance with the preceding bullet and $15 million payable on the date that is 12 months after the payment of the initial $20 million in shares of EPIX common stock, with the number of such shares to be issued determined based on 75% of the 30-day average closing price of EPIX common stock on The NASDAQ Global Market ending on the trading day that is ten days prior to the payment date. If, as a result of the 49.99% limitation described below, the entire $15 million payment cannot be made in shares of EPIX common stock, the balance will be paid in cash plus interest calculated from the milestone payment date at the rate of 10% per year.

In no event may the milestone be paid in shares of EPIX common stock to the extent that such shares would exceed 49.99% of the outstanding shares of EPIX common stock immediately after such milestone payment, when combined with all shares of EPIX common stock issued in the merger and issuable upon exercise of all Predix options and warrants assumed by EPIX in the merger. As a result of this limitation, if the milestone payment is triggered before EPIX issues a significant number of new

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	shares of its capital stock or before consummation of the merger, all or a substantial portion of the milestone payment will be paid in cash. Additionally, the milestone will be paid in cash to the holders of Predix options and warrants assumed by EPIX in the merger.

Q:		Who will be the directors of EPIX following the merger? (See page 103)
A:		Following the merger, the board of directors of EPIX will consist of nine members, of which five will be designated by EPIX and four will be designated by Predix. The following individuals are expected to comprise the EPIX board of directors after the merger:

		Christopher F.O. Gabrieli, Chairman Patrick J. Fortune, Ph.D. Frederick Frank Michael Gilman, Ph.D. Michael G. Kauffman, M.D., Ph.D. Mark Leuchtenberger Robert J. Perez Gregory D. Phelps Ian F. Smith, CPA, ACA
		Mr. Perez will be the fifth person designated by EPIX to serve on the board of directors of EPIX after the merger.

Q:		Who will manage EPIX following the merger? (See page 103)
A:		Following the merger, the management team and key employees of EPIX will be comprised of certain key employees and members of both EPIX’s and Predix’s respective management teams prior to the merger and is expected to include the following individuals:

Name		Position in the Combined Company		Current Position
Michael G. Kauffman, M.D., Ph.D.		Chief Executive Officer and Director		Predix’s President and Chief Executive Officer
Andrew C.G. Uprichard, M.D.		President		EPIX’s President and Chief Operating Officer
Kimberlee C. Drapkin, CPA		Chief Financial Officer		Predix’s Chief Financial Officer
Oren Becker, Ph.D.		Chief Scientific Officer		Predix’s Chief Scientific Officer
Stephen R. Donahue M.D.		Vice President of Clinical & Regulatory Affairs		Predix’s Vice President of Clinical and Regulatory Affairs
Philip Graham, Ph.D.		Vice President of Product Management and Imaging		EPIX’s Vice President of Program Management
Silvia Noiman, Ph.D.		Senior Vice President of Pipeline Management, General Manager Israel		Predix’s Senior Vice President of Pipeline Management, General Manager Israel
Chen Schor, CPA		Chief Business Officer		Predix’s Chief Business Officer
Sharon Shacham, Ph.D.		Vice President of Preclinical Development and Product Leadership		Predix’s Vice President of Preclinical Development and Product Leadership
Brenda Sousa		Vice President of Human Resources		EPIX’s Vice President of Human Resources

Q:		What stockholder approval is needed to complete the merger? (See pages 58 and 60)
A:		To consummate the merger, EPIX stockholders must approve the issuance of shares of EPIX common stock in the merger and approve the merger, which requires the affirmative vote of the holders of a majority of the shares present at the EPIX annual meeting, whether in person or by proxy. In addition, to ensure EPIX has sufficient shares of EPIX common stock authorized to issue in connection with the merger and to enable EPIX to meet the listing requirements of The NASDAQ Global Market after the merger. EPIX is seeking stockholder approval of each of the following: (a) the amendment to

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		EPIX’s restated certificate of incorporation increasing the number of authorized shares of EPIX common stock, which requires the affirmative vote of the holders of a majority of the outstanding shares of EPIX common stock as of the record date and (b) the authorization of the EPIX board of directors to amend in its discretion EPIX’s restated certificate of incorporation to effect a reverse stock split of the issued and outstanding shares of EPIX common stock at a ratio of between 1:1.25 to 1:4, which requires the affirmative vote of the holders of a majority of the outstanding shares of EPIX common stock as of the record date. As discussed in more detail in this joint proxy statement/prospectus, the approval of authorization to implement the reverse stock split will be necessary to complete the merger only if the trading price of EPIX common stock on The NASDAQ Global Market is below $5.00 per share upon closing of the merger. The EPIX board of directors, however, is seeking approval of both actions at the EPIX annual meeting to ensure that all actions necessary to consummate the merger are obtained at that time. Additionally, the EPIX board of directors expects to amend EPIX’s restated certificate of incorporation to increase the number of authorized shares of EPIX common stock, if approved, whether or not it is necessary to consummate the merger.
		In addition, Predix stockholders must vote to approve and adopt the merger agreement and to approve the merger, which requires the affirmative vote of the holders of: (a) a majority of the Predix common stock and preferred stock voting as a single class (on an as-converted to Predix common stock basis); (b) 60% of the Predix preferred stock voting as a single class (on an as-converted to Predix common stock basis), and (c) 662/3 % of the shares of Predix Series C preferred stock (on an as-converted to Predix common stock basis), in each case, outstanding on the record date for the Predix special meeting.

		In addition to obtaining stockholder approval, each of the other closing conditions set forth in the merger agreement must be satisfied or waived. For a more complete description of the closing conditions under the merger agreement, we urge you to read the section entitled “The Merger Agreement — Conditions to the Completion of the Merger” on page 97 of this joint proxy statement/ prospectus.

Q:		What do I need to do now? (See pages 55 and 59)
A:		After carefully reading and considering the information contained in and incorporated into this joint proxy statement/ prospectus, please submit your proxy card according to the instructions on the enclosed proxy card as soon as possible. If you do not submit a proxy card or attend the special meeting and vote in person, your shares will not be represented or voted at the meeting.
Q:		Will the merger trigger the recognition of gain or loss for U.S. federal income tax purposes for Predix stockholders? (See page 83)
A:		The closing of the merger is conditioned upon the receipt by Predix and EPIX of opinions that the merger will constitute a reorganization for U.S. federal income tax purposes. Assuming the merger does constitute a reorganization, subject to the limitations and qualifications described in “The Merger — Material United States Federal Income Tax Consequences of the Merger,” each Predix stockholder generally will recognize gain, but not loss, for federal income tax purposes under the installment method at the time of any cash milestone payment in the aggregate amount equal to the lesser of (a) the amount of cash such Predix stockholder receives in the merger or (b) the amount, if any, by which the sum of (i) the fair market value of any EPIX common stock such Predix stockholder receives, and (ii) the amount of cash such Predix stockholder receives in the merger, exceeds such Predix stockholder’s adjusted tax basis in its shares of Predix common stock or preferred stock, as applicable, and will be required to include the amount of the gain in such stockholder’s gross income for federal income tax purposes for the year in which the holder receives the cash milestone payment attributable to the gain. Under the installment method, a Predix stockholder will not recognize any gain in the merger until any cash milestone payment is made. However, a Predix stockholder electing out of the application of the installment method will be required to recognize gain at the closing in the amount equal to the lesser of (a) the fair market value of the milestone payment obligation such Predix stockholder receives in the merger or (b) the amount, if any, by which the sum of (i) the fair market value of any EPIX common stock such Predix stockholder receives, and (ii) the fair market value of the milestone payment obligation such Predix stockholder receives, exceeds such Predix stockholder’s adjusted tax basis in its shares of Predix stock surrendered in the merger. Any cash received in lieu of a fractional share of EPIX common stock will be treated separately for federal

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		income tax purposes. The tax consequences to Predix stockholders will depend on each stockholder’s own circumstances. Each Predix stockholder should consult with his, her or its tax advisor for a full understanding of the tax consequences of the merger to that stockholder.

Q:	How does the EPIX Board of Directors recommend that I vote?
A:	After careful consideration, the EPIX board of directors recommends that EPIX stockholders vote:

	•	“FOR” Proposal No. 1 to approve the issuance of shares of EPIX common stock in the merger and approve the merger;
	•	“FOR” Proposal No. 2 to approve an amendment to EPIX’s amended and restated certificate of incorporation to increase the number of authorized shares of common stock from 40,000,000 shares to 100,000,000 shares;
	•	“FOR” Proposal No. 3 to authorize the EPIX board of directors to amend in its discretion EPIX’s restated certificate of incorporation to effect a reverse stock split of EPIX’s issued and outstanding shares of common stock, at such ratio to be determined by the EPIX board of directors;
	•	“FOR” Proposal No. 4 to elect two directors for a three-year term to expire at the 2009 annual meeting of stockholders and to elect one director for a one-year term to expire at the 2007 annual meeting of stockholders; provided, however, that if the merger is completed, the EPIX board of directors will consist of the nine persons identified in this joint proxy statement/ prospectus;
	•	“FOR” Proposal No. 5 to ratify the selection of Ernst & Young LLP as EPIX’s independent registered public accounting firm for the fiscal year ending December 31, 2006; and
	•	“FOR” Proposal No. 6 to adjourn the annual meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3.

Q:	How does the Predix Board of Directors recommend that I vote?
A:	After careful consideration, the Predix board of directors recommends that Predix stockholders vote:

	•	“FOR” Proposal No. 1 to approve and adopt the merger agreement and to approve the merger; and
	•	“FOR” Proposal No. 2 to adjourn the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1.

Q:	What risks should I consider in deciding whether to vote in favor of the share issuance, approval of the merger, the amendment to EPIX’s restated certificate of incorporation, the approval and adoption of the merger agreement and the authorization of the EPIX board of directors to effect a reverse stock split?
A:	You should carefully review the section of this joint proxy statement/ prospectus entitled “Risk Factors” beginning on page 21, which sets forth certain risks and uncertainties related to the merger and risks and uncertainties to which the combined company’s business will be subject, including the individual businesses of each of EPIX and Predix.
Q:	What happens if I do not return a proxy card or otherwise provide proxy instructions?
A:	If you are an EPIX stockholder, the failure to return your proxy card or otherwise provide proxy instructions could be a factor in establishing a quorum for the annual meeting of EPIX stockholders. In addition, the failure to return your proxy card or otherwise provide instructions will have the same effect as voting against Proposal No. 2, the amendment of EPIX’s restated certificate of incorporation to increase the authorized shares of EPIX common stock, the approval of which may be necessary to enable EPIX to issue shares of EPIX common stock to Predix stockholders, option holders and warrant holders in connection with the merger, and Proposal No. 3, the authorization of the EPIX board of directors to amend in its discretion EPIX’s restated certificate of incorporation to effect a reverse stock split of EPIX’s issued and outstanding shares of common stock, at such ratio to be determined by the EPIX board of directors, which may be necessary for EPIX to maintain its eligibility for trading on The NASDAQ Global Market after completion of the merger. If you are a Predix stockholder, the

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	failure to return your proxy card or otherwise provide proxy instructions will have the same effect as voting against the approval and adoption of the merger agreement and the approval of the merger, and could be a factor in establishing a quorum for the special meeting of Predix stockholders.

Q:	May I vote in person?
A:	If your shares of EPIX common stock on the record date are registered directly in your name with EPIX’s transfer agent you are considered, with respect to those shares, the stockholder of record, and the proxy materials and proxy card are being sent directly to you by EPIX. If you are an EPIX stockholder of record, you may attend the annual meeting of EPIX stockholders to be held on                , 2006 and vote your shares in person, rather than signing and returning your proxy card or otherwise providing proxy instructions. Each Predix stockholder on the record date is a stockholder of record and may attend the special meeting of Predix stockholders to be held on                , 2006 and vote your shares in person, rather than signing and returning your proxy card or otherwise providing proxy instructions. All EPIX and Predix stockholders are requested to return their proxy cards, even if they intend to vote in person.
Q:	May I change my vote after I have provided proxy instructions?
A:	Yes. You may change your vote at any time before your proxy is voted at either the annual meeting of EPIX stockholders or the special meeting of Predix stockholders. You can do this in one of three ways. First, you can send a written notice stating that you would like to revoke your proxy. Second, you can submit new proxy instructions either on a new proxy card and if you are an EPIX stockholder also, by telephone or via the Internet. Third, you can attend the meeting and vote in person. Your attendance alone will not revoke your proxy. If you have instructed a broker to vote your shares of EPIX common stock, you must follow directions received from your broker to change those instructions.
Q:	Have any Predix stockholders entered into lock-up agreements?
A:	EPIX expects to obtain lock-up agreements from the officers, directors and certain stockholders of Predix covering an aggregate of approximately 9,049,530 Predix shares (on an as-converted to Predix common stock basis), or approximately 56% of Predix’s outstanding shares, which agreements prohibit the sale, transfer, pledge or other disposition with respect to EPIX common stock for up to 180 days following the consummation of the merger as follows: (a) one-third (1/3) of such holder’s restricted shares will be released from the lock-up after the 90th day following the consummation of the merger; (b) an additional one-third (1/3) of such holder’s restricted shares will be released from the lock-up after the 120th day following the consummation of the merger; and (c) the remaining one-third (1/3) of such holder’s restricted shares will be released from the lock-up after the 180th day following the consummation of the merger.

		In addition, prior to the closing, EPIX expects to obtain affiliate agreements from the holders of approximately 9,049,530 Predix shares (on an as-converted to Predix common stock basis), representing approximately 56% of Predix outstanding shares (on an as-converted to Predix common stock basis) as of such date. These agreements prohibit the sale, transfer or other disposition with respect to EPIX’s common stock in violation of the Securities Act of 1933, as amended, or the rules and regulations thereunder.

Q:		Have any EPIX stockholders entered into lock-up agreements?
A:		Yes. The chairman of the board of directors of EPIX, Christopher F.O. Gabrieli, has agreed to enter into the same lock-up agreement as certain Predix stockholders with respect to his shares of EPIX common stock.
Q:		Will Predix stockholders be able to trade the EPIX common stock that they receive in the merger? (See page 87)
A:		EPIX has filed an initial listing application with The NASDAQ Global Market pursuant to the “Reverse Merger” rules of The NASDAQ Global Market. If such application is accepted, EPIX anticipates that its common stock will continue to be listed on The NASDAQ Global Market following the completion of the

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		merger under its current trading symbol “EPIX.” It is a condition to Predix’s consummation of the merger that EPIX maintain the listing of its common stock on The NASDAQ Global Market.

		Subject to the lock-up agreements discussed herein, all shares of EPIX common stock issued to Predix stockholders, other than Predix stockholders who are deemed to be affiliates of Predix, will be freely tradable following the merger. EPIX has agreed to file a registration statement with respect to these shares of EPIX common stock to be issued in the merger to persons who are deemed to be affiliates of Predix. As a result, these shares will also be freely tradable upon the effectiveness of this registration statement, subject only to certain prospectus delivery requirements and the terms of the lock-up agreements described herein, if applicable.

Q:		Who is paying for this proxy solicitation?
A:		EPIX and Predix are conducting this proxy solicitation and will bear the cost of soliciting proxies, including the preparation, assembly, printing and mailing of this joint proxy statement/ prospectus, the proxy card and any additional information furnished to stockholders of EPIX and Predix. EPIX may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their costs of forwarding proxy and solicitation materials to beneficial owners.
Q:		When do you expect the merger to be completed?
A:		EPIX and Predix are working to complete the merger as quickly as possible. EPIX and Predix expect to complete the merger by the end of August 2006.
Q:		Should Predix stockholders send in their stock certificates now? (See page 91)
A:		No. After the merger is completed, EPIX will send you written instructions for exchanging your Predix stock certificates for EPIX stock certificates.
Q:		Whom should I call with questions? (See page 243)
A:		If you are an EPIX stockholder and would like additional copies, without charge, of this joint proxy statement/ prospectus or if you have questions about the merger, including the procedures for voting your shares, you should contact:

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	If we are not successful in integrating our organizations, we may not be able to operate efficiently after the merger.

	Integrating our companies may divert management’s attention away from our operations.

	We expect to incur significant costs in connection with the merger and in integrating the companies into a single business.

	•	severance;
	•	conversion of information systems;
	•	combining development, regulatory, manufacturing and commercial teams and processes;

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	•	reorganization of facilities; and
	•	relocation or disposition of excess equipment.

	We may be unable to repay, repurchase or redeem EPIX’s 3.0% Convertible Senior Notes due 2024 if, and when, required.

	EPIX’s failure to comply with the initial listing standards of The NASDAQ Global Market will subject its stock to delisting from The NASDAQ Global Market, which listing is a condition to the consummation of the merger.

	If we fail to retain key employees, the benefits of the merger could be diminished.

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	If one or more of the product candidates in the combined company cannot be shown to be safe and effective in clinical trials, is not approvable or not commercially successful, then the benefits of the merger may not be realized.

	Because Predix stockholders will receive a fixed number of shares of EPIX common stock in the merger, rather than a fixed value, if the market price of EPIX common stock declines, Predix stockholders will receive consideration in the merger of lesser value and if the market price of EPIX common stock increases, EPIX will pay consideration in the merger of greater value.

	The merger may fail to qualify as a reorganization for U.S. federal income tax purposes, resulting in recognition of taxable gain or loss by Predix stockholders in respect of their Predix stock.

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	Failure to complete the merger could adversely affect EPIX’s stock price and EPIX’s and Predix’s future business and operations.

	Certain directors and management of EPIX and Predix may have interests that are different from, or in addition to, those of the respective EPIX and Predix stockholders generally.

	•	Upon the closing of the merger, Christopher F.O. Gabrieli, Michael Gilman, Ph.D., Mark Leuchtenberger and Gregory D. Phelps, each of whom is a current director of EPIX, is expected to be a member of the combined company’s board of directors.
	•	It is anticipated that certain current officers and key employees of EPIX, including Andrew C.G. Uprichard, M.D., Philip Graham, Ph.D., and Brenda Sousa, will be executive officers or key employees of the combined company.
	•	Upon completion of the merger, Brenda Sousa, EPIX’s Vice President of Human Resources, is entitled to a bonus of $47,500. In addition, Philip Chase, EPIX’s Vice President and General Counsel, is entitled to a bonus of $72,000 upon completion of the merger.
	•	Upon the closing of the merger, the executive officers of Predix, including Michael G. Kauffman, M.D., Ph.D., Silvia Noiman, Ph.D., Oren Becker, Ph.D., Chen Schor and Kimberlee C. Drapkin will become executive officers of the combined company.
	•	EPIX will maintain all rights to indemnification existing in favor of Predix directors and officers for their acts and omissions occurring prior to the completion of the merger and will maintain the directors’ and officers’ liability insurance to cover any such liabilities for six years following the completion of the merger.

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	EPIX and Predix stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management of the combined company following the merger.

	Future sales of common stock by existing EPIX and Predix stockholders may cause the stock price of the combined company to fall.

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	Research and Development Risks

	EPIX may never receive marketing approval for any of its product candidates in the United States, including Vasovist and EP-2104R.

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	EPIX is currently focusing its development efforts on only two product candidates and one research program and will have limited prospects for successful operations if its two lead product candidates do not prove successful in clinical trials or if its only research program does not produce another product candidate suitable for clinical trials.

	If EPIX’s clinical trials are not successful, EPIX may not be able to develop and commercialize its product candidates.

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	EPIX must receive government regulatory approval for its product candidates before they can be marketed and sold in the United States or in other countries and this approval process is uncertain, time-consuming and expensive.

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	Gadolinium-based imaging agents, such as Vasovist and EP-2104R, may cause adverse side effects which could limit EPIX’s ability to receive approval for these product candidates and its ability to effectively market these product candidates, if approved.

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	If EPIX fails to comply with the extensive regulatory requirements to which it and its product candidates are subject, EPIX’s product candidates could be subject to restrictions or withdrawal from the market and EPIX could be subject to penalties.

	•	delay in approval or refusal to approve a product candidate;
	•	product candidate recall or seizure;
	•	interruption of production;
	•	operating restrictions;
	•	warning letters;
	•	injunctions;

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	•	criminal prosecutions; and
	•	unanticipated expenditures.

	EPIX’s research and development efforts may not result in product candidates appropriate for testing in human clinical trials.

	EPIX has have a limited manufacturing capability and it intends to outsource manufacturing of Vasovist to third parties, who may not perform as EPIX expects.

	Technology Risks

	If MRI manufacturers are not able to enhance their hardware and software sufficiently, EPIX will not be able to complete development of its contrast agent for the evaluation of cardiac indications.

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	EPIX depends on exclusively licensed technology from the Massachusetts General Hospital and if EPIX loses this license, it is unlikely it could obtain this technology elsewhere, which would have a material adverse effect on EPIX’s business.

	EPIX depends on patents and other proprietary rights, and if they fail to protect its business, EPIX may not be able to compete effectively.

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	EPIX may need to initiate lawsuits to protect or enforce its patents and other intellectual property rights, which could result in its incurrence of substantial costs and which could result in the forfeiture of these rights.

	Other rights and measures that EPIX relies upon to protect its intellectual property may not be adequate to protect its products and services and could reduce its ability to compete in the market.

	•	the agreements may be breached;
	•	EPIX may have inadequate remedies for any breach;
	•	proprietary information could be disclosed to EPIX’s competitors; or
	•	others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to EPIX’s trade secrets or disclose such technologies.

	EPIX’s success will depend partly on its ability to operate without infringing the intellectual property rights of others, and if EPIX is unable to do so, it may not be able to sell its products.

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	If EPIX fails to get adequate levels of reimbursement from third-party payors for its product candidates after they are approved in the United States and abroad, EPIX may have difficulty commercializing its product candidates.

	If EPIX is unable to attract and retain key management and other personnel, it would hurt EPIX’s ability to compete.

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	Business Risks

	EPIX currently depends on its strategic collaborators for support in product development and the regulatory approval process and, in the future, will depend on them for product marketing support as well. These efforts could be materially harmed if EPIX experiences problems with its collaborators.

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	EPIX’s stock price is volatile. It is possible that you may lose all or part of your investment.

	•	actual or anticipated fluctuations in EPIX’s operating results;
	•	announcements of technological innovation or new commercial products by EPIX or its competitors;
	•	new collaborations entered into by EPIX or its competitors;
	•	developments with respect to proprietary rights, including patent and litigation matters;
	•	results of pre-clinical studies and clinical trials;
	•	the timing of EPIX’s achievement of regulatory milestones;
	•	conditions and trends in the pharmaceutical and other technology industries;
	•	adoption of new accounting standards affecting such industries;
	•	changes in financial estimates by securities analysts;
	•	perceptions of the value of corporate transactions; and

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	•	degree of trading liquidity in EPIX’s common stock and general market conditions.

	EPIX has never generated revenues from commercial sales of its product candidates.

	EPIX has never generated positive cash flow, and if EPIX fails to generate revenue, it will have a material adverse effect on its business.

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	•	successfully complete EPIX’s product development efforts;
	•	obtain required regulatory approvals in a timely manner, if at all;
	•	manufacture EPIX’s product candidates at an acceptable cost and with acceptable quality; or
	•	successfully market any approved products.

	EPIX anticipates future losses and may never become profitable.

	If the market does not accept EPIX’s technology and product candidates, EPIX may not generate sufficient revenues to achieve or maintain profitability.

	•	safety;
	•	cost-effectiveness relative to alternative vascular imaging methods;
	•	availability of third-party reimbursement;
	•	ease of administration;
	•	clinical efficacy; and

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	•	availability of competitive products.

	EPIX may need to raise additional funds necessary to fund its operations, and if EPIX does not do so, it may not be able to implement its business plan.

	•	the progress and scope of clinical trials;
	•	the timing and costs of filing future regulatory submissions;
	•	the timing and costs required to receive both U.S. and foreign governmental approvals;
	•	the cost of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights;
	•	the extent to which EPIX’s product candidates gain market acceptance;
	•	the timing and costs of product introductions;
	•	the extent of EPIX’s ongoing and any new research and development programs;
	•	the costs of training physicians to become proficient with the use of EPIX’s product candidates; and
	•	the costs of developing marketing and distribution capabilities.

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	EPIX’s competitors may have greater financial resources, superior products or product candidates, manufacturing capabilities and/or marketing expertise, and EPIX may not be able to compete with them successfully.

	Product liability claims could increase EPIX’s costs and adversely affect its results of operations.

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	EPIX significantly increased its leverage as a result of the sale of 3.0% Convertible Senior Notes due 2024.

	•	make it difficult for EPIX to make payments on the notes;
	•	make it difficult for EPIX to obtain financing for working capital, acquisitions or other purposes on favorable terms, if at all;
	•	make EPIX more vulnerable to industry downturns and competitive pressures; and
	•	limit EPIX’s flexibility in planning for, or reacting to changes in, its business.

	Certain anti-takeover clauses in EPIX’s charter and by-laws and in Delaware law may make an acquisition of EPIX more difficult.

	Business Risks

	If Predix does not obtain required regulatory approval of its drug candidates, Predix will be unable to market and sell Predix’s drug candidates.

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	•	Predix’s failure to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a drug candidate is safe and effective for a particular indication;
	•	Predix’s inability to demonstrate that a drug candidate’s benefits outweigh its risks;
	•	Predix’s inability to demonstrate that the drug candidate presents a significant advantage over existing therapies;
	•	the FDA’s or comparable foreign regulatory authorities’ disagreement with the manner in which Predix and Predix’s collaborators interpret the data from pre-clinical studies or clinical trials;
	•	the FDA’s or comparable foreign regulatory authorities’ failure to approve Predix’s manufacturing processes or facilities or the processes or facilities of Predix’s collaborators; or
	•	a change in the approval policies or regulations of the FDA or comparable foreign regulatory authorities.

	Predix’s clinical trials may not yield results that will enable Predix to obtain regulatory approval for Predix’s drug candidates.

	•	the drug candidate may not prove to be safe and efficacious;
	•	the dosage form of the drug candidate may not deliver reproducible amounts of drug to patients;
	•	patients may die or suffer other adverse effects for reasons that may or may not be related to the drug candidate being tested;
	•	the results of later-stage clinical trials may not confirm the positive results of earlier trials;
	•	the results may not meet the level of statistical significance required by the FDA or other regulatory agencies for approval; and
	•	the FDA or other regulatory agencies may require additional or expanded trials.

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	If Predix does not obtain additional financing, its ability to implement its business plan will be significantly harmed.

	Predix has never had commercially available products and, because all of Predix’s drug candidates are in early stages of development, there is a high risk of failure, and Predix may never succeed in developing marketable products or generating product revenue.

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	If clinical trials for Predix’s drug candidates are prolonged or delayed, Predix may be unable to commercialize Predix’s drug candidates on a timely basis, which would require Predix to incur additional costs and delay Predix’s receipt of any revenue from potential product sales.

	•	conditions imposed on Predix by the FDA or any foreign regulatory authority regarding the scope or design of Predix’s clinical trials;
	•	delays in obtaining, or Predix’s inability to obtain, required approvals from institutional review boards or other reviewing entities at clinical sites selected for participation in Predix’s clinical trials;
	•	delay in developing a clinical dosage form, insufficient supply or deficient quality of Predix’s drug candidates or other materials necessary to conduct Predix’s clinical trials;
	•	negative or inconclusive results from clinical trials, or results that are inconsistent with earlier results, that necessitate additional clinical study;
	•	negative or inconclusive results from clinical trials, or results that are inconsistent with earlier results, that necessitate additional clinical study;
	•	serious and/or unexpected drug-related side effects experienced by subjects in clinical trials; or
	•	failure of Predix’s third-party contractors or Predix’s investigators to comply with regulatory requirements or otherwise meet their contractual obligations to Predix in a timely manner.

	If Predix encounters difficulties enrolling subjects in Predix’s clinical trials, or subjects drop out of trials in progress, Predix’s trials could be delayed or otherwise adversely affected.

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	•	the limited size of the patient population and the availability of commercial products for certain target indications, including pulmonary arterial hypertension and pulmonary hypertension associated with chronic obstructive pulmonary disease;
	•	the nature and design of the trial protocol;
	•	the proximity of patients to clinical sites;
	•	the availability of other effective treatments for the relevant disease (whether approved or experimental);
	•	the eligibility criteria for enrollment in Predix’s clinical trials;
	•	perceived risks and benefits of the drug candidate under study; and
	•	competing studies or trials.

	Predix’s drug candidates are currently unformulated.

	•	the current dosage may not provide reproducible amounts of drug;
	•	the pharmaceutical development of a commercially viable formulation may add significant cost and time to Predix’s clinical development programs;
	•	additional trials may be required if the new formulation is not bioequivalent to formulations already used in clinical trials;
	•	future clinical trials may be delayed in order to identify, develop, optimize, manufacture and certify a commercially viable formulation; and
	•	regulatory filings, and/or commercial launch may be delayed due to the lack of a commercial process for cGMP manufacturing of the new formulation.

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	If Predix fails to obtain the additional capital necessary to fund Predix’s operations, Predix will be unable to successfully develop and commercialize Predix’s drug candidates.

	•	the progress and results of Predix’s first Phase III clinical trial for PRX-00023 and any other trials Predix may initiate based on the results of this trial;
	•	Predix’s ability to enter into a strategic collaboration, licensing or other arrangement, particularly with respect to PRX-00023, on terms favorable to Predix;
	•	the progress and results of any future clinical trials Predix may initiate with PRX-03140 and PRX-08066 based on the Phase I results obtained to date;
	•	the results of Predix’s pre-clinical studies and testing for Predix’s pre-clinical programs, and any decisions to initiate clinical trials if supported by the pre-clinical results;
	•	the costs, timing and outcome of regulatory review of PRX-00023, PRX-03140, PRX-08066 and PRX-07034, and any pre-clinical drug candidates that progress to clinical trials;
	•	the scope, progress, results and cost of pre-clinical development, manufacturing, pharmaceutical development, clinical trials and regulatory review of any new drug candidates Predix may discover or acquire;
	•	the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing Predix’s issued patents, and defending intellectual property-related claims;
	•	the costs of establishing sales and marketing functions and of establishing commercial manufacturing arrangements if any of Predix’s drug candidates is approved;
	•	the costs to satisfy Predix’s obligations under potential future collaborations; and
	•	the timing, receipt and amount of sales or royalties, if any, from PRX-00023, PRX-03140, PRX-08066 and PRX-07034, and any other drug candidates.

	•	terminate or delay pre-clinical studies, manufacturing, pharmaceutical development, clinical trials or other development for one or more of Predix’s drug candidates, including the initiation of clinical development of PRX-00023 for a depression indication;
	•	delay Predix’s establishment of sales and marketing capabilities or other activities that may be necessary to commercialize any of Predix’s drug candidates; or
	•	curtail significant drug discovery programs that are designed to identify new drug candidates.

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	Failure to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs could prevent Predix from selling Predix’s drug candidates in foreign markets, which may adversely affect Predix’s operating results and financial condition.

	Predix’s drug candidates will remain subject to ongoing regulatory requirements even if they receive marketing approval, and if Predix fails to comply with requirements, Predix could lose these approvals and the sale of any approved commercial products could be temporarily or permanently suspended.

	•	restrictions on the products, manufacturers or manufacturing processes;
	•	civil or criminal penalties;
	•	fines;
	•	injunctions;
	•	product seizures or detentions;
	•	import bans;
	•	product recalls and related publicity requirements;
	•	total or partial suspension of production; and
	•	refusal to approve pending applications for marketing approval of new products or supplements to approved applications.

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	Predix deals with hazardous materials and must comply with environmental laws and regulations, which can be expensive and restrict how Predix does business.

	Predix is focusing Predix’s drug discovery and development efforts on G-Protein Coupled Receptor and ion channel-targeted drug candidates, which have historically had a high incidence of adverse side effects.

	The application of Predix’s in silico drug discovery technology and approach may be limited to a subset of therapeutically useful and ion channel proteins, which may reduce the opportunities to develop and commercialize drug candidates against other important therapeutic targets.

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	Predix may not be able to keep up with the rapid technological change in the biotechnology and pharmaceutical industries, which could make any of Predix’s future approved products obsolete and reduce Predix’s revenue.

	Predix’s competitors may develop products that are less expensive, safer or more effective, which may diminish or eliminate the commercial success of any future products that Predix may commercialize.

	•	PRX-00023. If approved, PRX-00023, the drug candidate Predix is developing for the treatment of anxiety and depression, will compete with approved products from such pharmaceutical companies as Forest Laboratories, GlaxoSmithKline, Pfizer and Wyeth, and may compete with several drug candidates in clinical development from other companies, including Eli Lilly and MediciNova. Predix believes that there are over 35 drug candidates in clinical trials or that have been submitted for approval for the treatment of anxiety and over 45 drug candidates in clinical trials or that have been submitted for approval for the treatment of depression.
	•	PRX-03140. If approved, PRX-03140, the drug candidate Predix is developing for the treatment of Alzheimer’s disease, will compete with approved products from such pharmaceutical companies as Forest Laboratories, Johnson & Johnson, Novartis and Pfizer, and may compete with several drug candidates in clinical development from other companies, including Myriad Genetics and Neurochem. Predix believes that there are over 60 drug candidates in clinical trials for the treatment of Alzheimer’s disease.
	•	PRX-08066. If approved, PRX-08066, the drug candidate Predix is developing for the treatment of pulmonary hypertension, will compete with approved products from such pharmaceutical companies as Actelion, CoTherix, GlaxoSmithKline, Pfizer and United Therapeutics, and may compete with several drug candidates in clinical development by other companies such as Encysive Pharmaceuticals and Myogen. Predix believes that there are approximately ten drug candidates in clinical trials or that have been submitted for approval for the treatment of pulmonary arterial hypertension and/or pulmonary hypertension associated with chronic obstructive pulmonary disease.

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	If a successful product liability claim or series of claims is brought against Predix for uninsured liabilities or in excess of insured liabilities, Predix could be forced to pay substantial damage awards.

	Predix relies on third parties to conduct Predix’s clinical trials, and those third-parties may not perform satisfactorily, including failing to meet established deadlines for the completion of such trials.

	Predix’s drug candidates require significant biological testing, pre-clinical testing, manufacturing and pharmaceutical development expertise and investment. Predix relies primarily on external partners to complete these activities.

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	If Predix does not establish a collaboration to further develop and commercialize PRX-00023 or other drug candidates, Predix may have to alter Predix’s development plans.

	If physicians and patients do not accept Predix’s product candidates, Predix may be unable to generate significant revenue, if any.

	•	timing of market introduction of competitive products;
	•	lower demonstrated clinical safety and efficacy compared to other products;
	•	lack of cost-effectiveness;
	•	lack of availability of reimbursement from managed care plans and other third-party payors;
	•	convenience and ease of administration;
	•	prevalence and severity of adverse side effects;
	•	other potential advantages of alternative treatment methods; and
	•	ineffective marketing and distribution support.

	If the government and third-party payors fail to provide coverage and adequate payment rates for Predix’s product candidates, if any, Predix’s revenue and prospects for profitability will be harmed.

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	If Predix’s patent position does not adequately protect Predix’s drug candidates or any future products, others could compete against Predix more directly, which would harm Predix’s business.

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	•	Predix or Predix’s licensors were the first to make the inventions covered by each of Predix’s pending patent applications;
	•	Predix or Predix’s licensors were the first to file patent applications for these inventions;
	•	others will not independently develop similar or alternative technologies or duplicate any of Predix’s technologies;
	•	any of Predix’s or Predix’s licensors’ pending patent applications will result in issued patents;
	•	any of Predix’s or Predix’s licensors’ patents will be valid or enforceable;
	•	any patents issued to Predix or Predix’s licensors and collaborators will provide a basis for commercially viable products, will provide Predix with any competitive advantages or will not be challenged by third parties;
	•	Predix will develop additional proprietary technologies or drug candidates that are patentable; or
	•	the patents of others will not have an adverse effect on Predix’s business.

	Predix may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

	Litigation or other proceedings or third-party claims of intellectual property infringement would require Predix to spend time and money and could prevent Predix from developing or commercializing Predix’s drug candidates.

	•	be required to defend a lawsuit, which is very expensive and time consuming, even if Predix ultimately prevails;
	•	be required to defend against an interference proceeding in the United States Patent and Trademark Office, which can also be very expensive and time consuming, regardless of the outcome;

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	•	receive an adverse decision in a lawsuit or in an interference proceeding resulting in the loss of some or all of Predix’s rights to Predix’s intellectual property, drug products or drug candidates;
	•	be required to pay a large sum for damages, including possible punitive damages, if Predix is found to be infringing;
	•	be prohibited from developing, making, using, selling or offering for sale Predix’s drug candidates until Predix obtains a license from the infringed party, and this license may not be granted to Predix at all or may not be granted on satisfactory terms; and
	•	be forced to develop non-infringing products, technologies and methods which, even if possible, could require substantial additional capital, could necessitate additional regulatory approval and could delay commercialization.

	Predix may be subject to claims that Predix or Predix’s employees have wrongfully used or disclosed alleged trade secrets of their former employers.

	Risks Relating to Predix’s Israel Operations

	Political and military instability and other factors may adversely affect Predix’s operations in Israel.

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	1. To consider and vote upon the issuance of shares of EPIX common stock in the merger as contemplated by the Agreement and Plan of Merger, dated as of April 3, 2006, as amended, by and among EPIX Pharmaceuticals, Inc., EPIX Delaware, Inc., a wholly-owned subsidiary of EPIX, and Predix Pharmaceuticals Holdings, Inc., and approve the merger of Predix Pharmaceuticals Holdings, Inc. with and into EPIX Delaware, Inc.;
	2. To approve an amendment to EPIX’s amended and restated certificate of incorporation to increase the number of authorized shares of common stock from 40,000,000 shares to 100,000,000 shares, representing an additional 60,000,000 shares, which may be necessary to provide EPIX with sufficient authorized shares of common stock to issue in connection with the merger, as described in this joint proxy statement/ prospectus;
	3. To authorize the EPIX board of directors to amend in its discretion EPIX’s restated certificate of incorporation to effect a reverse stock split of EPIX’s issued and outstanding shares of common stock, at such ratio to be determined by the EPIX board of directors, which may be necessary for EPIX to maintain its eligibility for trading on The NASDAQ Global Market after completion of the merger, which is a condition to consummate the merger, as described in this joint proxy statement/ prospectus;
	4. To elect two directors for a three-year term to expire at the 2009 annual meeting of stockholders and to elect one director for a one-year term to expire at the 2007 annual meeting of stockholders; provided, however, that, if the merger is completed, the EPIX board of directors will consist of the nine persons identified in this joint proxy statement/ prospectus;
	5. To ratify the selection of Ernst & Young LLP as EPIX’s independent registered public accounting firm for the fiscal year ending December 31, 2006;
	6. To consider and vote on a proposal to approve the adjournment of the annual meeting, if necessary, to solicit additional proxies, in the event that there are not sufficient votes at the time of the annual meeting to approve Proposal Nos. 1, 2 and 3; and
	7. To transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

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	•	To vote in person, come to the annual meeting and we will give you a ballot when you arrive.
	•	To vote using the proxy card, simply mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided. If you return your signed proxy card to us before the annual meeting, we will vote your shares as you direct.
	•	To vote over the telephone, dial toll-free 1-800-652-VOTE (8683) in the United States or Canada using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed proxy card. Your vote must be received by 1:00 a.m., Eastern Time on                , 2006 to be counted.
	•	To vote on the Internet, go to www.computershare.com/expressvote to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. Your vote must be received by 1:00 a.m., Eastern Time on                , 2006 to be counted.

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	1. To consider and vote upon Proposal No. 1 to approve and adopt the merger agreement and approve of the merger.
	2. To consider and vote on Proposal No. 2 to adjourn the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1.
	3. To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

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	•	To vote in person, come to the special meeting and you will be given a ballot when you arrive.
	•	To vote using the proxy card, simply mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided. If you return your signed proxy card to us before the special meeting, we will vote your shares as you direct.

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	•	receipt of statistically significant final results from a randomized, placebo- or active comparator- controlled, double-blinded Phase II or Phase III clinical trial of:

	•	PRX-00023 for the treatment of generalized anxiety disorder, depression, attention deficit hyperactivity disorder or other neuropsychiatric disorder with at least 100 patients;
	•	PRX-03140 for the treatment of Alzheimer’s disease or other cognitive disorders with at least 60 patients;

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	•	PRX-08066 for the treatment of pulmonary artery hypertension, chronic obstructive pulmonary disease or a different indication with at least 60 patients;
	•	PRX-07034 for the treatment of obesity, cognitive disorders or a different indication with at least 60 patients; or

	•	entering into a strategic partnership for any Predix drug candidate, which provides milestone and research funding payments of more than $50 million, of which $20 million must be received by June 30, 2008 in unrestricted cash through non-refundable license fees, research funding payments, and/or premiums paid in connection with an equity investment by the strategic partner within 60 days following entry into the strategic partnership.

	•	in cash, shares of EPIX common stock or any combination thereof with the number of such shares to be issued determined based on the five-day average closing price of EPIX common stock on The NASDAQ Global Market ending on the trading day that is ten days prior to the payment date; or
	•	$20 million payable in accordance with the preceding bullet and $15 million payable on the date that is 12 months after the payment of the initial $20 million in shares of EPIX common stock, with the number of such shares to be issued determined based on 75% of the 30-day average closing price of EPIX common stock on The NASDAQ Global Market ending on the trading day that is ten days prior to the payment date. If, as a result of the 49.99% limitation described below, the entire $15 million payment cannot be made in shares of EPIX common stock, the balance will be paid in cash plus interest calculated from the milestone payment date at the rate of 10% per year.

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	•	In examining the quality of potential merger candidates, EPIX focused on a number of factors, including the depth of the potential candidate’s product pipeline. In particular, EPIX reviewed companies with at least two products in clinical development. The EPIX board of directors noted that Predix has three product candidates in clinical development, and that Predix expects to submit an IND to the FDA for a fourth product candidate in 2006. The EPIX board of directors also considered that some of Predix’s product candidates are being or will be investigated for multiple indications. The EPIX board of directors noted that Predix had as many or more product candidates in clinical development than any of the other potential merger candidates considered by the EPIX board of directors.
	•	In examining the quality of potential partners, EPIX also focused on the presence or absence of a technology platform that could provide the basis for development of additional product candidates. The EPIX board of directors noted Predix’s drug development history, including the speed and efficiency with which Predix’s discovery scientists were able to produce drug candidates with affinity for the intended target receptor and a lack of affinity for other off-target receptors. The EPIX board of directors believes that Predix’s efficient and effective drug discovery platform is well-positioned to continue to deliver product candidates for development by the combined company.
	•	The EPIX board of directors noted that there are a large number of therapeutics companies that develop therapeutic product candidates based on technologies that the EPIX board of directors considers speculative, including gene therapy products and RNA interference products. The EPIX board of directors deliberately sought companies whose technology it believed was less speculative and based on established science and drug development methods. Although the EPIX board of directors recognized that substantial risks still remain in the development of therapeutic products, it

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		noted that Predix’s technology allows for the discovery and development of drug candidates that interact with clinically and commercially validated target proteins. The EPIX board of directors believes that the acceptance of these proteins as viable therapeutic targets and Predix’s ability to develop drug candidates that have affinity for these target receptors and lack affinity for other off-target receptors substantially reduces the risks inherent in drug discovery and development.
	•	In examining the quality of potential merger candidates, EPIX focused on the presence or absence of a strong permanent management team. The EPIX board of directors noted at the time that Mr. Astrue’s agreement with EPIX was scheduled to expire in May 2006. In addition, EPIX has been without a Chief Financial Officer since July 2005. The EPIX board of directors also noted that several other of EPIX’s significant management positions are currently filled by consultants or by employees operating in an interim capacity. For the foregoing reasons, the EPIX board of directors considered the capability of the management of each of the potential merger candidates to lead a combined company after the departure of Mr. Astrue and the others filling management positions at EPIX on a short-term basis. The EPIX board of directors believes Dr. Kauffman, in particular, has the leadership skills and track record of success in the clinical development of therapeutic products to lead the combined company. The EPIX board of directors also noted that strengths of the other members of Predix’s management were highly complementary to the strengths of the full-time members of EPIX’s management team.
	•	The EPIX board of directors also considered the commitment of potential merger candidates to maintain EPIX’s core franchise in medical imaging in order to build a diversified specialty pharmaceuticals company.
	•	The EPIX board of directors noted the difficulties inherent in combining any two organizations and also noted the significant incremental difficulty in integrating two organizations that are geographically diverse. The EPIX board of directors, therefore, limited its search to companies in and around Boston, Massachusetts, or to virtual companies whose management expressed a willingness to move to the greater Boston, Massachusetts area. Predix, based in Lexington Massachusetts, clearly met this pre-specified criteria.
	•	The EPIX board of directors also considered the opinion that Needham & Company, LLC rendered that, as of March 30, 2006, the consideration to be paid by EPIX in the merger to the equity holders of Predix (including the holders of options and warrants) was fair, from a financial point of view, to EPIX and the holders of EPIX common stock.

	•	the risk that the potential benefits of the merger might not be realized, including the risk that EPIX will not successfully convert its focus from solely developing diagnostics product candidates to developing a combination of diagnostic product candidates and therapeutic product candidates;
	•	the fact that Predix’s product candidates are at early stages of development, are subject to significant development risks and target extremely competitive markets, which the EPIX board of directors weighed against the portfolio of other potential transaction candidates that were considered and against the risks inherent in continuing to pursue the approval of Vasovist in the United States;
	•	the price volatility of EPIX’s common stock, which may increase the value of the EPIX common stock that Predix stockholders will receive upon the consummation of the merger and, in particular, possibly result in the holders of Predix common stock and preferred stock receiving significantly more consideration in the merger;
	•	the inability of EPIX’s stockholders to realize the long-term value of the successful execution of EPIX’s current strategy as an independent company;

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	•	the possible loss of key management, technical or other personnel of either of the combining companies as a result of the management and other changes that will be implemented in integrating the businesses;
	•	the risk of diverting management’s attention from other strategic priorities to implement merger integration efforts;
	•	the risk that the merger may not be completed, and that a more limited range of alternative strategic transactions would be available to EPIX in that event;
	•	the substantial charges expected to be incurred in connection with the merger, including transaction fees and expenses arising from or in connection with the merger; and
	•	various other applicable risks associated with the combined company and the merger, including those described under the section entitled “Risk Factors” elsewhere in this joint proxy statement/ prospectus.

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	(a) a draft of the merger agreement dated March 29, 2006 together with the exhibits and schedules thereto;
	(b) certain publicly available information concerning EPIX and Predix, including publicly available filings and the websites of EPIX and Predix, and certain other relevant financial and operating data of EPIX and Predix furnished to us by EPIX and Predix;
	(c) materials prepared by EPIX concerning the business, operations and prospects of EPIX and Predix and the combined company;
	(d) materials prepared by Predix concerning the business, operations and prospects of Predix;
	(e) financial forecasts with respect to EPIX, Predix and the combined company prepared by the management of EPIX;
	(f) financial forecasts with respect to Predix prepared by the management of Predix;
	(g) certain publicly available financial data of companies whose securities are traded in the public markets and that Needham & Company deemed relevant to similar data for EPIX;
	(h) the trading history of EPIX common stock; and
	(i) the financial terms of certain other business combinations that Needham & Company deemed generally relevant.

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	Stock Trading History

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	Comparable Transactions Analysis

	•	Xcyte Therapies, Inc.’s acquisition of Cyclacel Ltd.
	•	Maxim Pharmaceuticals, Inc’s merger with EpiCept Corporation
	•	Corgentech, Inc’s merger with AlgoRx Pharmaceuticals, Inc.
	•	Vernalis plc’s acquisition of Cita Neuropharmaceuticals, Inc.
	•	Clinical Data, Inc’s acquisition of Genaissance Pharmaceuticals, Inc.
	•	Celtic Pharmaceutical Holdings LP’s acquisition of Xenova Group plc
	•	Epimmune, Inc’s merger with IDM Pharma, Inc.
	•	GlaxoSmithKline, Inc.’s acquisition of Corixa Corporation
	•	Cephalon, Inc.’s acquisition of Salmedix, Inc.
	•	Johnson & Johnson’s acquisition of Peninsula Pharmaceuticals, Inc.
	•	Johnson & Johnson’s acquisition of TransForm Pharmaceuticals, Inc.
	•	Aphton Corporation’s acquisition of Igeneon AG
	•	VI Technologies, Inc.’s merger with Panacos Pharmaceuticals, Inc.
	•	MGI Pharma, Inc’s acquisition of Zycos, Inc.
	•	MGI Pharma, Inc’s acquisition of Aesgen Pharmaceuticals, Inc.
	•	Amgen Corporation’s acquisition of Tularik, Inc.
	•	Pfizer, Inc.’s acquisition of Esperion Therapeutics, Inc.
	•	Cell Therapeutics, Inc.’s merger with Novuspharma Spa
	•	Allergan, Inc.’s acquisition of Oculex Pharmaceuticals, Inc.
	•	OSI Pharmaceuticals, Inc.’s acquisition of Cell Pathways, Inc.

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		Low				Median				Mean				High				Predix
																		(At March 28, 2006)
		(In millions)
Initial Equity Purchase Price		$	25.2			$	112.2			$	260.2			$	1,675.2			$	82.2
Enterprise Value(1)		$	7.2			$	91.7			$	240.9			$	1,486.3			$	127.8
Enterprise Value(2)		$	7.2			$	87.5			$	233.3			$	1,486.3			$	90.0

(1)	Includes contingent payment
(2)	Does not include contingent payment

	Comparable Public Companies Analysis

	•	Myriad Genetics, Inc.
	•	Neurochem, Inc.
	•	Nastech Pharmaceutical Company, Inc.
	•	Acadia Pharmaceuticals, Inc.
	•	NeuroSearch A/ S
	•	Cortex Pharmaceuticals, Inc.
	•	Amarin Corporation
	•	Neurogen Corp.
	•	Cypress Bioscience, Inc.
	•	Cytrx Corporation
	•	Corcept Therapeutics, Inc.
	•	Memory Pharmaceuticals Corp.

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		Comparable Public Company Values
		(At March 28, 2006)																Predix
		Low				Median				Mean				High				(At March 28, 2006)
		(In millions)
Equity Value		$	104.8			$	206.6			$	301.5			$	997.8			$	82.2
Enterprise Value		$	60.4			$	158.2			$	233.9			$	762.7			$	127.8	(1)

(1)	Includes contingent payment.

	Comparable Biotechnology Initial Public Offerings Analysis

	•	Alexza Pharmaceuticals, Inc.
	•	Iomai Corp.
	•	SGX Pharmaceuticals, Inc.
	•	Altus Pharmaceuticals, Inc.
	•	Somaxon Pharmaceuticals, Inc.
	•	CombinatoRx Corporation
	•	Accentia Biopharmaceuticals, Inc.
	•	Coley Pharmaceutical Group, Inc.
	•	Advanced Life Sciences Holdings, Inc.
	•	XenoPort, Inc.
	•	Aspreva Pharmaceuticals Corp.
	•	Threshold Pharmaceuticals, Inc.
	•	Icagen, Inc.
	•	Favrille, Inc.

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		Comparable IPO Values
		(At March 28, 2006)																Predix
		Low				Median				Mean				High				(At March 28, 2006)
		(In millions)
Equity Value		$	85.2			$	189.7			$	203.7			$	396.8			$	82.2
Enterprise Value		$	57.4			$	106.0			$	132.4			$	287.9			$	127.8	(1)

(1)	Includes contingent payment.

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	•	the expectation that the merger will be treated as a tax-free reorganization for U.S. federal income tax purposes;
	•	the relative percentage ownership of EPIX stockholders and Predix stockholders in the combined company that is fixed;
	•	the skills and abilities of the anticipated post-merger management team;
	•	given Predix’s prospects as a stand-alone entity, it would be difficult for Predix to raise capital at an attractive valuation to fund its current business plan, and any such financing could, therefore, be highly dilutive to Predix’s stockholders;
	•	that the merger will provide Predix stockholders with shares of EPIX common stock, a publicly traded company, which would provide Predix stockholders with the possibility of liquidity;
	•	the range of options available to the combined organization to access private and public equity markets to fund future capital needs, which would likely be greater than the options available to Predix alone;
	•	the contribution of EPIX’s cash, intellectual property and other assets to a combined company, which could help accelerate Predix’s development plans and Predix’s ability to generate products while also preserving the accumulated value in Predix’s product candidates and research platform;
	•	the status of EPIX’s product candidates, and the prospect that they may provide additional sources of revenue sooner than many of Predix’s product candidates; and
	•	the conclusion of Predix’s board of directors that the $4.5 million termination fee, and the circumstances when such fee may be payable, were reasonable.

	•	the risk that the potential benefits of the merger might not be realized;
	•	the price volatility of EPIX’s common stock, which may reduce the value of the EPIX common stock that Predix stockholders will receive upon the consummation of the merger and, in particular, possibly result in the holders of Predix common stock and preferred stock receiving significantly less consideration in the merger;
	•	the risk that the $35 million milestone payment may not be triggered, thereby significantly decreasing the value of the merger to holders of Predix stock, option and warrants;
	•	the inability of Predix’s stockholders to realize the long-term value of the successful execution of Predix’s current strategy as an independent company;

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	•	the possible loss of key management, technical or other personnel of either of the combining companies as a result of the management and other changes that will be implemented in integrating the businesses;
	•	the risk of diverting management’s attention from other strategic priorities to implement merger integration efforts;
	•	the risk that the merger may not be completed, and that a more limited range of alternative strategic transactions would be available to Predix in that event;
	•	the substantial charges expected to be incurred in connection with the merger, including the $2.0 million fee to be paid to Lehman Brothers, the entire amount of which is contingent upon the consummation of the merger, and other transaction fees and expenses arising from or in connection with the merger; and
	•	various other applicable risks associated with the combined company and the merger, including those described under the section entitled “Risk Factors” elsewhere in this joint proxy statement/ prospectus.

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	•	a “U.S. holder” is a beneficial owner of Predix common stock or preferred stock, that is (a) an individual citizen or resident of the United States, (b) a corporation or any other entity taxable as a corporation created or organized in or under the laws of the United States or of a state of the United States or the District of Columbia, (c) a trust (i) in respect of which a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) that was in existence on August 20, 1996 and validly elected to continue to be treated as a domestic trust, or (d) an estate that is subject to U.S. federal income tax on its worldwide income from all sources; and
	•	a “non-U.S. holder” is any individual, corporation, trust or estate which holds common stock or preferred stock of Predix, other than a U.S. holder.

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	U.S. Holders

	•	if such U.S. holder’s basis in the Predix stock exchanged in the merger does not exceed the fair market value of EPIX common stock such holder receives in the merger, such U.S. holder will recognize gain in the amount of cash received (net of interest imputed under the Code) at the time of the milestone payment under the installment method;
	•	if such U.S. holder’s basis in the Predix stock exchanged by it exceeds the fair market value of EPIX common stock such holder receives in the merger, such U.S. holder will recognize gain in the amount equal to the excess of cash received (net of interest imputed under the Code) over the excess of the basis in Predix stock over the fair market value of EPIX common stock received in the merger, at the time of the milestone payment under the installment method.

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	Certain Requirements for “Reorganization” under Section 368(a)

	U.S. Holders Backup Withholding and Reporting Requirements

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	Non-U.S. Holders

	•	such gain is not effectively connected with the conduct by the non-U.S.  holder of a trade or business within the United States or, if a tax treaty applies, is not attributable to a permanent establishment or fixed place of business maintained by the non-U.S. holder in the United States;
	•	in the case of certain capital gains, the non-U.S. holder either is not considered, for U.S. federal income tax purposes, to be present in the United States for 183 days or more during the taxable year in which the capital gain is recognized or otherwise qualifies for an exemption;
	•	the non-U.S. holder qualifies for an exemption from backup withholding, as discussed below;
	•	Predix is not and has not been a U.S. real property holding corporation at any time within the shorter of the five-year period ending on the date on which the proposed transaction is consummated or such non-U.S. holder’s holding period; and

	Non-U.S. Holders Information Reporting and Backup Withholding

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Name		Position in the Combined Company		Current Position with EPIX
Andrew C.G. Uprichard, M.D.		President		EPIX’s President and Chief Operating Officer
Philip Graham, Ph.D.		Vice President of Product Management and Imaging		EPIX’s Vice President of Program Management
Brenda Sousa		Vice President of Human Resources		EPIX’s Vice President of Human Resources

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	•	receipt of statistically significant final results from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of:

	•	PRX-00023 for the treatment of generalized anxiety disorder, depression, attention-deficit hyperactivity disorder or other neuropsychiatric disorder with at least 100 patients;
	•	PRX-03140 for the treatment of Alzheimer’s disease or other cognitive disorders with at least 60 patients;
	•	PRX-08066 for the treatment of pulmonary artery hypertension, chronic obstructive pulmonary disease or a different indication as selected by Predix or, after the effective time, by the non-Predix members of the combined company’s board of directors, with at least 60 patients;
	•	PRX-07034 for the treatment of obesity, cognitive disorders or a different indication as selected by Predix or, after the effective time, by the non-Predix members of the combined company’s board of directors, with at least 60 patients; or

	•	entering into a strategic partnership for any Predix drug candidate, which provides milestone and research funding payments of more than $50 million, of which $20 million must be received by June 30, 2008 in unrestricted cash through non-refundable license fees, research funding payments and/or premiums paid in connection with an equity investment by the strategic partner within 60 days following entry into the strategic partnership.

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	•	in cash, shares of EPIX common stock or any combination thereof with the number of such shares to be issued determined based on the five-day average closing price of EPIX common stock on The NASDAQ National Market ending on the trading day that is ten days prior to the payment date; or
	•	$20 million payable in accordance with paragraph (a) above and $15 million payable on the date that is 12 months after the payment of the initial $20 million in shares of EPIX common stock, with the number of such shares to be issued determined based on 75% of the 30-day average closing price of EPIX common stock on The NASDAQ National Market ending on the trading day that is ten days prior to the payment date. If, as a result of the 49.99% limitation described below, the entire $15 million payment cannot be made in shares of EPIX common stock, the balance will be paid in cash plus interest calculated from the milestone payment date at the rate of 10% per year.

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	•	changing its certificate of incorporation or by-laws, or otherwise altering its corporate structure;
	•	selling, pledging, disposing of or encumbering any assets except for in the ordinary course of business;
	•	issuing, disposing of or encumbering any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest except pursuant to stock options or warrants outstanding on the date of the merger agreement;
	•	accelerating, amending or changing the period of exercisability of options granted under any stock plans or warrants, as the case may be, or authorizing cash payments in exchange for any options or warrants;
	•	declaring, setting aside, or paying any dividend or other distribution in respect of any of its capital stock;
	•	splitting, combining, or reclassifying any of its capital stock or issuing or authorizing or proposing the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
	•	amending the terms of, repurchasing, redeeming or otherwise acquiring, any of its securities;

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	•	selling, transferring, licensing, sublicensing or otherwise disposing of any intellectual property, or amending or modifying any existing agreements with respect to any intellectual property;
	•	acquiring (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof;
	•	incurring any indebtedness for borrowed money or assuming, guaranteeing or endorsing or becoming responsible for the obligations of any person;
	•	making any loans or advances in excess of $100,000 except in the ordinary course of business consistent with past practice;
	•	entering into or amending any material contract or agreement other than in the ordinary course of business;
	•	authorizing any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000, taken as a whole;
	•	increasing the compensation payable or to become payable to its officers, employees or consultants, except for increases in salary or wages of employees who are not officers in accordance with past practices, or granting any severance or termination pay to, or entering into any employment or severance agreement with, any director, officer (except for officers who are terminated on an involuntary basis) or other employee, or establishing, adopting, entering into or amending any employee benefit plan, provided, that each may provide their officers and employees retention bonuses to retain such officer’s or employee’s services through the effective time of the merger, valued at not more than 20% of such officer’s or employee’s yearly base salary as of the date of the merger agreement, payable in cash, stock or an option to purchase stock that becomes payable or vests on or after the effective time of the merger, if each party has notified the other party in writing at least five business days prior to granting any such retention bonus and included in such notification is a description of the circumstances giving rise to such retention bonus, provided, further, that the aggregate value of all retention bonuses granted by each shall not exceed $350,000;
	•	taking any action, other than as required by generally accepted accounting principals, to change accounting policies or procedures;
	•	making any material tax election inconsistent with past practices or settling or compromising any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of any tax;
	•	paying, discharging or satisfying any claims, liabilities or obligations, other than in the ordinary course of business and consistent with past practice;
	•	entering into any material partnership arrangements, joint development agreements, strategic alliances or collaborations;
	•	except as may be required by law, taking any action to terminate or amend any employee plans other than in connection with the merger; or
	•	taking any action which would make any of the representations or warranties of either party contained in the merger agreement to be untrue or incorrect or prevent either party from performing, or cause either party not to perform, its covenants thereunder or result in any of the conditions to the merger not being satisfied.

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	•	to file, as promptly as practicable after execution of the merger agreement, this joint proxy statement/ prospectus with the Securities and Exchange Commission, and that EPIX will prepare and file the registration statement in which the joint proxy statement/ prospectus is included;
	•	to cooperate with each other in the preparation and filing of the joint proxy statement/ prospectus; and
	•	to promptly notify one another of any comments from the Securities and Exchange Commission with respect to the joint proxy statement/ prospectus.

	•	to mail the joint proxy statement/ prospectus to their respective stockholders at the earliest practicable time after the registration statement is declared effective by the Securities and Exchange Commission;

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	•	to promptly take all steps necessary to hold and convene their respective stockholders’ meeting, and use commercially reasonable efforts to solicit from their respective stockholders proxies in favor of the adoption of the merger agreement and the approval of the merger; and
	•	that their respective boards of directors shall recommend the adoption of the merger agreement and the approval of the merger to their respective stockholders, and, except in certain circumstances, neither the board of directors of EPIX or Predix shall withdraw, amend or modify the recommendation.

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	Conditions to Obligations of Each Party

	•	the registration statement relating to the shares of EPIX common stock to be issued in connection with the merger, of which this joint proxy statement/ prospectus is a part, shall have been declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, and no stop order suspending the effectiveness of the registration statement shall have been issued by the Securities and Exchange Commission nor shall such proceeding have been initiated or, to the knowledge of EPIX and Predix, threatened by the Securities and Exchange Commission;
	•	all approvals of, declarations or filings, with any governmental authority necessary for the consummation of the merger, if any, shall have been obtained or made, including the expiration or termination of the waiting period (and any extension thereof) under the HSR Act, if required;

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	•	the merger agreement shall have been adopted by the requisite vote of the stockholders of EPIX and Predix, respectively, in accordance with General Corporation Law of the State of Delaware and EPIX’s and Predix’s respective certificates of incorporation and by-laws; and the issuance of shares of EPIX common stock by virtue of the merger shall have been approved by the requisite vote of the stockholders of EPIX under the rules of the Securities and Exchange Commission and the National Association of Securities Dealers, Inc.;
	•	no order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger shall be in effect, nor shall any proceeding brought by any governmental authority seeking any of the foregoing be pending;
	•	EPIX and Predix shall have received the written opinion of Goodwin Procter LLP and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., respectively, to the effect that the merger will constitute a reorganization within the meaning of Section 368 of the Code; and
	•	no injunction, or final, non-appealable judgment, decree or order issued by any court of competent jurisdiction shall be in effect which would result in the acceleration of payment of the amounts outstanding under that certain Indenture, dated as of June 7, 2004, between EPIX and U.S. Bank National Association, as trustee, or any notes issued thereunder.

	Additional Conditions to the Obligations of EPIX

	•	the representations and warranties of Predix contained in the merger agreement shall be true and correct in all respects on and as of the effective time;
	•	Predix shall have performed or complied with all agreements and covenants required by the merger agreement to be performed or complied with by it on or prior to the effective time of the merger;
	•	there shall not have been instituted, pending or threatened any action or proceeding by any governmental authority, nor shall there be in effect any judgment, decree or order of any governmental authority, in either case, seeking to prohibit or limit EPIX from exercising all material rights and privileges pertaining to its ownership of the surviving corporation;
	•	there shall have been no change, occurrence or circumstance in the business, results of operations or financial condition of Predix or any subsidiary of Predix having or reasonably likely to have, individually or in the aggregate, a material adverse effect on Predix;
	•	EPIX shall have received from each affiliate of Predix, the affiliate agreements, described elsewhere in this joint proxy statement/ prospectus, and such agreement shall be in full force and effect;
	•	Predix shall have received all consents and approvals required to consummate the merger under Predix’s and its subsidiaries’ agreements listed in the merger agreement;
	•	stockholders of Predix holding an aggregate of approximately 40% of the voting shares of Predix shall have entered into voting agreements, described elsewhere in this joint proxy statement/ prospectus, and such agreements shall be in full force and effect; and
	•	EPIX shall have received from Goodwin Procter LLP, counsel to Predix, an opinion, addressed to EPIX dated as of the effective date of the merger.

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	Additional Conditions to the Obligations of Predix

	•	the representations and warranties of EPIX contained in the merger agreement shall be true and correct in all respects on and as of the effective time;
	•	EPIX shall have performed or complied with all agreements and covenants required by the merger agreement to be performed or complied with by it on or prior to the effective time of the merger;
	•	there shall not have been instituted, pending or threatened any action or proceeding (or any investigation or other inquiry that might result in such an action or proceeding) by any governmental authority, nor shall there be in effect any judgment, decree or order of any governmental authority, in either case, seeking to prohibit or limit Predix from exercising all material rights and privileges pertaining to its ownership of the surviving corporation;
	•	there shall have been no change, occurrence or circumstance in the business, results of operations or financial condition of EPIX having or reasonably likely to have, individually or in the aggregate, a material adverse effect on EPIX;
	•	the EPIX common stock shall be listed on The NASDAQ National Market as of and from the date of the merger agreement through the consummation of the merger and the shares of EPIX common stock issued in the merger shall have been approved for listing on The NASDAQ National Market as of the consummation of the merger;
	•	Predix shall have received from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to EPIX, an opinion, addressed to Predix dated as of the effective date of the merger;
	•	the sum of EPIX’s cash, cash equivalents, restricted cash and securities available for sale at the effective time of the merger less the aggregate amount of any and all liabilities and obligations associated with (a) severance or similar obligations of EPIX as of the effective time; (b) fees payable to any financial advisor to EPIX; (c) fees owed or payable to EPIX’s independent public accountants; (d) bonus payments to employees upon consummation of the merger; and (e) legal fees of EPIX in connection with the negotiation and execution of the merger agreement and consummation of the merger shall be no less than the $110 million;
	•	EPIX shall have caused the board of directors of EPIX to be constituted as set forth the merger agreement; and
	•	each of the current officers of EPIX who is not named in the merger agreement shall have delivered to EPIX their written resignations as officers of EPIX and each of the individuals named in the merger agreement shall have been appointed officers of EPIX.

	•	by mutual written consent duly authorized by the board of directors of EPIX and Predix;
	•	by either EPIX or Predix if the merger shall not have been consummated by August 31, 2006; provided, that the right to terminate the merger agreement for this reason shall not be available to any party whose failure to fulfill any obligation under the merger agreement has been the cause of or resulted in the failure of the merger to occur on or before such date;

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	•	by either EPIX or Predix if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a non-appealable final order, decree or ruling or taken any other action prohibiting the merger;
	•	by EPIX, if the board of directors of Predix shall have withheld or withdrawn its recommendation in favor of the merger, or if there shall have occurred any material adverse effect with respect to Predix since the date of the merger agreement;
	•	by Predix, if the board of directors of EPIX shall have withheld or withdrawn its recommendation in favor of the merger, or if there shall have occurred any material adverse effect with respect to EPIX since the date of the merger agreement;
	•	by either EPIX or Predix, if the required approval of the stockholders of EPIX or Predix shall not have been obtained by reason of the failure to obtain the requisite vote, provided, that the right to terminate the merger agreement for this reason shall not be available to any party where the failure to obtain stockholder approval of such party shall have been caused by the action or failure of such party in breach of the merger agreement;
	•	by either EPIX or Predix, upon a breach of any covenant or agreement on the part of Predix or EPIX, respectively, set forth in the merger agreement, in either case, such that certain conditions set forth in the merger agreement, would not be satisfied, or a Terminating Breach, provided, that, if such Terminating Breach is curable through the exercise of commercially reasonable efforts prior to the expiration of five days from its occurrence (but in no event later than August 31, 2006) by EPIX or Predix, neither Predix nor EPIX, respectively, may terminate the merger agreement unless such 5-day period expires without such Terminating Breach having been cured; or
	•	by either EPIX or Predix, if such party is not in material breach of any of its respective obligations under the merger agreement, if any representation or warranty on the part of the other party set forth in the merger agreement proves to have been untrue on the date of thereof, if such failure to be true would reasonably be likely to have a material adverse effect.

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	•	there is an uncured breach of any covenant or agreement;
	•	the board of directors of Predix shall have withheld or withdrawn its recommendation in favor of the merger;
	•	there shall have occurred any material adverse effect with respect to Predix since the date of the merger agreement; or
	•	Predix fails to obtain the requisite stockholder vote to approve the merger.

	•	there is an uncured breach of any covenant or agreement;
	•	the board of directors of EPIX shall have withheld or withdrawn its recommendation in favor of the merger;
	•	there shall have occurred any material adverse effect with respect to EPIX since the date of the merger agreement; or
	•	EPIX fails to obtain the requisite stockholder vote to approve the merger.

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Name		Age				Position
Management Team:
Michael G. Kauffman, M.D., Ph.D.*			42			Chief Executive Officer
Andrew C.G. Uprichard, M.D.*			48			President
Kimberlee C. Drapkin, CPA*			38			Chief Financial Officer
Oren Becker, Ph.D.*			45			Chief Scientific Officer
Stephen R. Donahue, M.D.			41			Vice President of Clinical & Regulatory Affairs
Philip Graham, Ph.D.			43			Vice President of Product Management and Imaging
Silvia Noiman, Ph.D.*			50			Senior Vice President of Pipeline Management, General Manager Israel
Chen Schor, CPA*			34			Chief Business Officer
Sharon Shacham, Ph.D.			35			Vice President of Preclinical Development and Product Leadership
Brenda Sousa			42			Vice President of Human Resources
Directors:
Christopher F.O. Gabrieli			46			Chairman of the Board
Patrick J. Fortune, Ph.D.			59			Director
Frederick Frank			73			Director
Michael Gilman, Ph.D.			51			Director
Michael G. Kauffman, M.D., Ph.D.			42			Director
Mark Leuchtenberger			50			Director
Robert J. Perez			41			Director
Gregory D. Phelps			57			Director
Ian F. Smith, CPA, ACA			39			Director

	*	Executive officer.

	Management and Key Employees of EPIX After the Merger

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	Board of Directors of EPIX After the Merger

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	Board Composition of EPIX After the Merger

	Committees of the Board of EPIX After the Merger

	•	reviewing the engagement of independent accountants and retaining and terminating the services of independent accountants;
	•	considering matters relating to accounting policy and internal controls and reviewing the scope of annual audits;
	•	reviewing annual financial statements;
	•	preparing the report that Securities and Exchange Commission rules require be included in its annual proxy statement;
	•	overseeing and monitoring its independent registered public accounting firm’s qualifications, independence and performance;
	•	providing the EPIX board of directors with the results of its monitoring and recommendations; and
	•	providing to the EPIX board of directors after the merger additional information and materials as it deems necessary to make the EPIX board of directors aware of significant financial matters that require the attention of the EPIX board of directors.

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	•	determining the compensation of EPIX’s Chief Executive Officer, (conducting its decision making process with respect to that issue without the Chief Executive Officer present);
	•	formulating, evaluating and approving the compensation of the EPIX directors, other executive officers and key employees; and
	•	administering EPIX’s equity plans.

	Compensation Committee Interlocks and Insider Participation with Respect to EPIX

	Compensation of EPIX’s Board of Directors

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Name		Age				Position with EPIX
Christopher F.O. Gabrieli			46			Chairman of the Board
Mark Leuchtenberger			49			Director
Robert J. Perez			41			Nominee for Director
Gregory D. Phelps			57			Director
Michael Gilman, Ph.D.			51			Director

	Committees of the EPIX Board of Directors and Meetings

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	Stockholder Communications to the EPIX Board of Directors

	Compensation of EPIX Directors

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Name		Age				Position with EPIX
Andrew C.G. Uprichard, M.D.			48			President and Chief Operating Officer
Robert Pelletier, CPA			54			Executive Director of Finance

	Compensation of EPIX Executives

	Summary Compensation Table

																			Long-Term
																			Compensation
							Annual Compensation												Awards
																			Securities
															Other Annual				Underlying				All Other
Name and Principal Position			Year				Salary				Bonus(1)				Compensation				Options (#)				Compensation
Andrew C.G. Uprichard, M.D.				2005			$	309,872			$	14,002				—				52,500			$	2,803	(3)
	President and			2004				137,308				54,878	(2)			—				175,000				2,677	(3)
	Chief Operating Officer			2003				—				—				—				—				—
Robert Pelletier, CPA(4)				2005				175,188				25,835				—				23,281				4,591	(3)
	Executive Director of Finance			2004				157,961				34,609				—				7,288				4,078	(3)
	and Principal Accounting			2003				124,038				40,050				—				40,000				3,539	(3)
	Officer
Michael J. Astrue(5)				2005				112,308				—				—				—				—
	Former Interim Chief Executive Officer			2004				—				—				—				—				—
				2003				—				—				—				—				—
Michael D. Webb				2005				356,517	(6)			—				—				50,000				6,300	(7)
	Former Chief Executive Officer			2004				334,286				49,125				—				62,500				8,620	(7)
				2003				313,351				137,722				—				66,500				6,225	(7)
Peyton J. Marshall, Ph.D.(8)				2005				129,635				—				—				—				4,972	(3)
	Former Senior Vice President			2004				238,933				36,114				—				35,625				4,883	(3)
	and Chief Financial Officer			2003				225,000				80,156				—				—				3,404	(3)

(1)	Bonuses were earned in the year indicated and are generally paid in the subsequent year.
(2)	Dr. Uprichard joined EPIX in July 2004 and the bonus compensation amount includes a $20,000 signing bonus.
(3)	Consists of matching 401(k) contributions.

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(4)	Mr. Pelletier and EPIX have agreed that Mr. Pelletier will resign as EPIX’s Executive Director of Finance in August 2006.
(5)	Mr. Astrue resigned as Interim Chief Executive Officer on May 5, 2006.
(6)	Effective September 14, 2005, Mr. Webb resigned as Chief Executive Officer and member of the EPIX board of directors. This figure represents $254,435 earned by Mr. Webb as Chief Executive Officer through September 14, 2005, and $102,082 in fees and expense reimbursements, paid to Mr. Webb in connection with consulting services he provided to EPIX from September 14, 2005 through December 31, 2005.
(7)	Consists of matching 401(k) contributions of $6,300, $6,000 and $6,000 in 2005, 2004 and 2003, respectively, and life insurance premiums paid by EPIX on behalf of Mr. Webb on a policy for the benefit of Mr. Webb of $2,620 in 2004 and $225 in 2003.
(8)	Effective July 1, 2005, Mr. Marshall resigned as Senior Vice President, Finance and Administration and Chief Financial Officer of EPIX.

	Option Grants in EPIX’s Last Fiscal Year

		Individual Grants(1)																Potential Realizable
																		Value at Assumed
		Number of				% of Total												Annual Rates of Stock
		Securities				Options				Exercise								Price Appreciation for
		Underlying				Granted to				or Base								Option Term(2)
		Options				Employees in				Price				Expiration
Name		Granted(1)				Fiscal Year				($/Share)				Date				5%				10%
Andrew C.G. Uprichard, M.D.			52,500				8.83	%		$	7.15				3/17/2015			$	236,071			$	598,251
Robert Pelletier, CPA			8,281				1.39	%			7.15				3/17/2015				37,236				94,364
			15,000				2.52	%			8.69				6/24/2015				81,976				207,744
Michael J. Astrue			—				—				—				—				—				—
Michael D. Webb(3)			50,000				8.41	%			7.15				3/17/2015				224,830				569,763
Peyton J. Marshall, Ph.D.			—				—				—				—				—				—

(1)

These options were granted under EPIX’s Amended and Restated 1992 Equity Incentive Plan, or the Equity Plan, at an exercise price equal to the fair market value of EPIX common stock at the date of grant. All of the options granted vest in five equal annual installments and began vesting on March 17, 2006 except for one of the grants to Mr. Pelletier which began vesting on June 24, 2006. With the exception of Mr. Pelletier’s option for 8,281, which is an incentive stock option, each of the options cited above consists of a combination of non-qualified stock options and incentive stock options as follows: Dr. Uprichard’s option consists of 41,992 non-qualified stock options and 10,508 incentive stock options; Mr. Pelletier’s grant of 15,000 options consists of 7,907 non-qualified stock options and 7,093 incentive stock options, and Mr. Webb’s option consists of 39,998 non-qualified options and 10,002 incentive stock options. The options are not transferable, except by will or by laws of descent and distribution. The post-termination exercise period for exercisable options is generally three months. If an acquisition event also constitutes a change in control, or, if there is a change in control that does not also constitute an acquisition event, unless provided to the contrary in an agreement between EPIX and the optionee, the options or such assumed or substituted options shall become immediately exercisable in full, if within eighteen months of the change in control, a termination event (as defined below) with respect to the optionee occurs. If the acquiring or succeeding corporation does not agree to assume or issue substitute options for the options issued by EPIX, the options issued by EPIX shall become immediately exercisable in full. If the acquisition event involves a cash payment to EPIX’s stockholders, the optionee shall receive a cash payment for each option equal to the amount by which the price to be paid in the acquisition exceeds the option exercise price.

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	An acquisition event means (a) any merger or consolidation of EPIX with or into another entity as a result of which EPIX’s common stock is converted into or exchanged for the right to receive cash, securities or other property; (b) any exchange of EPIX shares for cash, securities or other property pursuant to a statutory share exchange transaction; (c) any sale or exchange of all or substantially all of EPIX’s assets in one transaction or in a series of transactions; or (d) a reorganization or liquidation of EPIX.
	A change in control means either (a) (i) a merger or consolidation of EPIX, whether or not approved by the EPIX board of directors, other than a merger or consolidation in which EPIX’s voting securities continue to represent at least 50% of the total voting power represented by EPIX’s voting securities of the surviving entity outstanding immediately after the merger or consolidation, or (ii) the approval by EPIX’s stockholders of an agreement for the sale or disposition by EPIX of all or substantially all of EPIX’s assets; or (b) any person becoming the beneficial owner of EPIX’s securities representing 50% or more of EPIX’s total outstanding voting power (excluding EPIX or EPIX’s affiliates or any EPIX employee benefit plan) pursuant to a transaction or a series of related transactions which the EPIX board of directors does not approve.
	A termination event means the termination of the optionee’s employment (a) by EPIX or the acquiring or succeeding corporation without cause; or (b) by the optionee upon written notice given promptly after EPIX’s or the acquiring or succeeding corporation’s taking any of the following actions, which actions shall not have been cured within a 30-day period following such notice: (i) the principal place of the performance of the optionee’s responsibilities, or the Principal Location, is changed to a location outside of a 30 mile radius from the Principal Location immediately prior to the change in control; (ii) there is a material reduction in the optionee’s salary; or (iii) there is a material diminution in the scope of the optionee’s responsibilities without the optionee’s agreement or without cause.

(2)	In accordance with the rules of the Securities and Exchange Commission, EPIX shows in these columns the potential realizable value over the term of the option (the period from the grant date to the expiration date). EPIX calculates this assuming that the fair market value of EPIX’s common stock on the date of grant appreciates at the indicated annual rate, 5% and 10% compounded annually, for the entire term of the option and that the option is exercised and sold on the last day of its term for the appreciated stock price. These amounts are based on assumed rates of appreciation and do not represent an estimate of EPIX’s future stock price. Actual gains, if any, on stock option exercises will depend on the future performance of EPIX’s common stock, the optionholder’s continued employment with EPIX through the option exercise period, and the date on which the option is exercised.
(3)	Effective September 14, 2005, Mr. Webb resigned as Chief Executive Officer and member of the EPIX board of directors, but continued to provide consulting services to EPIX through December 31, 2005. In connection with his departure from EPIX these options have now been cancelled.

	Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

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										Number of Securities								Value of the Unexercised
										Underlying Unexercised								In-The-Money Options at
		Shares								Options at Fiscal Year-End								Fiscal Year-End
		Acquired on				Value
Name		Exercise				Realized(1)				Exercisable				Unexercisable				Exercisable				Unexercisable
Andrew C.G. Uprichard, M.D.			—			$	—				35,000				192,500			$	—			$	—
Robert Pelletier, CPA			—				—				9,457				53,112				—				—
Michael J. Astrue			—				—				—				—				—				—
Michael D. Webb			30,000				66,600				467,794				—				—				—
Peyton J. Marshall, Ph.D.			20,500				52,682				—				—				—				—

(1)

Amounts shown in this column do not necessarily represent actual value realized from the sale of the shares acquired upon exercise of the option because in many cases the shares are not sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise.

Number of Securities

Remaining Available for

Future Issuance Under

Number of Securities to

Equity Compensation Plans

be Issued Upon

Weighted-Average Exercise

(Excluding Securities

Exercise of Outstanding

Price of Outstanding

Reflected in the First

Plan category

Options

Options

Column)

Equity Compensation Plans Approved by Securityholders(1)

3,271,909

$

11.39

1,519,165

(2)(3)(4)(5)

Equity Compensation Plans not Approved by Securityholders

N/A

N/A

N/A

Total

3,271,909

$

11.39

1,519,165

(1)	These plans consist of EPIX’s Amended and Restated 1992 Equity Incentive Plan, or the Equity Plan, the Amended and Restated 1996 Director Stock Option Plan, or the Director Plan, and the Amended and Restated 1996 Employee Stock Purchase Plan, or the Employee Plan.
(2)	Includes options to purchase 1,032,521 shares of EPIX common stock issued under the Equity Plan that were cancelled after December 31, 2005.
(3)	Does not include options to purchase 300,562 shares of EPIX common stock issued under the Equity Plan that were granted to employees after December 31, 2005.
(4)	Includes options to purchase 53,334 shares of EPIX common stock issued under the Director Plan that were cancelled after December 31, 2005.
(5)	Does not include 149,916 shares of EPIX common stock issued to date under the Employee Plan. Shares of EPIX common stock that are set aside within the Employee Plan immediately become outstanding EPIX common stock when purchased by employees.

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			Fiscal Year Ending
Company/Index/Market				12/29/2000					12/31/2001					12/31/2002					12/31/2003					12/31/2004					12/30/2005
EPIX Pharmaceuticals, Inc.			$	100.00				$	170.63				$	86.33				$	194.39				$	213.85				$	48.24
NASDAQ Pharmaceuticals				100.00					84.95					52.36					75.53					81.63					90.02
NASDAQ US Only				100.00					77.19					54.01					82.10					89.52					92.74

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	Compensation Philosophy

	•	attract, motivate and retain high caliber individuals who are responsible for leading EPIX in achieving or exceeding business and corporate goals and to increase total return to stockholders;
	•	provide a total compensation program where a significant portion of compensation is linked to both short-term and long-term corporate performance and the achievement of individual performance objectives;
	•	align the financial interests of the management team with EPIX’s financial interests and those of its stockholders; and
	•	emphasize reward for performance at the individual, team and corporate levels.

	Base Salary

	Annual Bonus

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	Equity-Based Long-Term Incentive Compensation

	Compliance with Internal Revenue Code Section 162(m)

	Members of the EPIX Compensation Committee:
	CHRISTOPHER F.O. GABRIELI (CHAIRMAN)
	MARK LEUCHTENBERGER
	GREGORY D. PHELPS

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	•	Reviewed and discussed the audited financial statements and the effectiveness of internal controls on financial reporting for the year ended December 31, 2005 with management and Ernst & Young LLP, EPIX’s independent auditors;
	•	Discussed with Ernst & Young LLP the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit; and
	•	Received written disclosures and the letter from Ernst & Young LLP regarding its independence as required by Independence Standards Board Standard No. 1. The audit committee further discussed with Ernst & Young LLP their independence. The audit committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate.

	Members of the EPIX Audit Committee:
	PETER WIRTH (CHAIRMAN)
	CHRISTOPHER F.O. GABRIELI
	MARK LEUCHTENBERGER

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Director		Cash				Stock Options(1)
Frederick Frank		$	37,500				—
Julian Adams, Ph.D.		$	12,500				3,666	(2)
David Collier, M.D.			—				1,890	(3)
Yigal Erlich			—				—
Patrick J. Fortune, Ph.D.			—				1,890	(3)
Ted Love, M.D.		$	15,000				3,666	(2)
Joel Martin, Ph.D.			—				1,890	(3)
Jonathan Silverstein			—				—
Ian F. Smith, CPA, ACA		$	10,084				5,555	(4)

(1)	All options vested immediately upon grant and have a term of ten years. In the event that the director ceases to serve as a director, the stock option will terminate on the later of 30 days after the recipient ceases to serve as a director or August 8, 2007, except (a) in the case of death or disability, in which event the option will terminate one year from the date of the director’s death or disability or (b) in the event that the non-employee director is terminated for cause, in which event the option will terminate immediately.
(2)	Options were granted on April 28, 2005 at an exercise price of $0.81 per share.
(3)	Options were granted on April 26, 2005 at an exercise price of $0.81 per share.
(4)	Options were granted on May 10, 2005 at an exercise price of $0.81 per share.

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	Summary Compensation Table

															Long Term
															Compensation
															Awards:
															Securities
															Underlying				All Other
Name and Principal Position			Year				Salary				Bonus				Options (#)				Compensation(1)
Michael G. Kauffman, M.D., Ph.D.				2005			$	320,000			$	130,000				337,227				—
	President and Chief Executive Officer
Chen Schor, CPA				2005			$	234,999			$	55,000				132,091				—
	Chief Business Officer
Silvia Noiman, Ph.D.(2)				2005			$	166,846			$	50,000				103,106			$	71,324
	Senior Vice President of Pipeline Management, General Manager Israel
Oren Becker, Ph.D.(2)				2005			$	166,554			$	50,000				97,377			$	71,126
	Chief Scientific Officer
Kimberlee C. Drapkin, CPA(3)				2005			$	146,320			$	50,000				144,996				—
	Chief Financial Officer
Stephen R. Donahue, M.D.(4)				2005			$	252,500			$	30,000				60,222			$	33,238
	Vice President of Clinical and Regulatory Affairs

(1)	Excludes medical, group life insurance and certain other benefits received by the named executive officers that are available generally to all Predix’s salaried employees and certain perquisites and other personal benefits received by the named executive officers which do not exceed the lesser of $50,000 or 10% of any such named executive officer’s total annual compensation reported in this table.
(2)	Drs. Noiman and Becker are employed through Predix’s subsidiary, Predix Pharmaceuticals Ltd. and are paid in Israeli shekels. Dollar amounts used in this table are based upon the exchange rate on December 30, 2005. All Other Compensation for Dr. Noiman represents a car allowance of $12,330 and Israeli social benefits of $58,994. All Other Compensation for Dr. Becker represents a car allowance of $13,367 and Israeli social benefits of $57,759.
(3)	Ms. Drapkin joined Predix on February 22, 2005.
(4)	Upon consummation of the merger, Dr. Donahue will remain the Vice President of Clinical and Regulatory Affairs of the combined company, but will no longer be deemed an executive officer of the combined company. All Other Compensation for Dr. Donahue represents reimbursement for relocation expenses.

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	Option Grants in 2005

		Option Grants in Last Fiscal Year
																		Potential Realizable
						% of Total												Value at Assumed
		Number of				Options												Rated of Stock Price
		Securities				Granted to												Appreciation for
		Underlying				Employees				Exercise								Option Term(1)
		Options				in Fiscal				Price
Name		Granted				Year				per Year				Expiration Date				5% ($)				10% ($)
Michael G. Kauffman, M.D., Ph.D.			253,689				20.7			$	0.810				1/18/2015				129,457				326,726
			83,538				6.8				1.440				4/28/2015				565,987				970,177
Chen Schor, CPA			115,043				9.4				0.810				1/18/2015				58,706				148,164
			35,294				2.9				1.440				4/28/2015				232,009				409,890
Silvia Noiman, Ph.D.			89,628				7.3				0.810				1/18/2015				45,737				115,431
			13,478				1.1				1.440				4/28/2015				91,316				156,528
Oren Becker, Ph.D.			84,133				6.9				0.810				1/18/2015				42,933				108,355
			13,244				1.1				1.440				4/28/2015				89,731				153,811
Kimberlee C. Drapkin, CPA			98,445				8.0				0.810				3/18/2015				50,236				126,787
			46,551				3.8				1.440				4/28/2015				315,392				540,625
Stephen R. Donahue, M.D.			36,277				3.0				0.810				3/18/2015				18,501				46,721
			23,945				2.0				1.440				4/28/2015				162,232				278,088

(1)

There is no established trading market for Predix shares. The option grants listed above were made under the Predix 2003 Stock Incentive Plan at exercise prices equal to the fair market value of Predix common stock at the date of grant, as determined by the Predix board of directors. The potential realizable value, if applicable, is calculated based on the term of the option at its time of grant. The potential realizable value assumes the fair market price of option grants was $0.810 on January 18, 2005 and was $5.04 on March 18, 2005 and April 28, 2005, which is the fair market value subsequently assessed for such stock option grants for accounting purposes to determine compensation expense reportable under Accounting Principles Board Opinion No. 25. These numbers are calculated based on Securities and Exchange Commission requirements and do not reflect Predix’s projection or estimate of future stock price growth.

	Aggregate Option Exercises in 2005 and Values at December 31, 2005

						Number of Securities
						Underlying Unexercised								Value of Unexercised in the
						Options at December 31,								Money Options at December 31,
		Shares				2005								2005(1)
		Acquired on
Name		Exercise				Exercisable				Unexercisable				Exercisable ($)				Unexercisable ($)
Michael G. Kauffman, M.D., Ph.D.			148,829				284,346				310,333				1,423,720				1,553,837
Chen Schor, CPA			83,392				57,496				193,717				287,882				969,941
Silvia Noiman, Ph.D.			0				194,822				83,274				975,474				416,953
Oren Becker, Ph.D.			0				183,116				78,251				916,862				391,803
Kimberlee C. Drapkin, CPA			0				34,419				110,557				172,336				553,559
Stephen R. Donahue, M.D.			0				33,260				87,569				166,533				438,458

(1)	There is no established trading market for Predix shares. Determined by multiplying the product of EPIX’s price per share on December 30, 2005 ($4.04) and the exchange ratio of 1.239411, which is subject to adjustment to account for the reverse stock split if implemented, by the number of shares exercisable and not exercisable on December 31, 2005.

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	Amended and Restated 2003 Stock Incentive Plan

	•	the determination of which employees, directors, consultants and other advisors will be granted options and other awards;
	•	the number of shares subject to options and other awards;
	•	the exercise price of each option which may not be less than fair market value on the date of grant;
	•	the schedule upon which options become exercisable;
	•	the termination or cancellation provisions applicable to options; the terms and conditions of other awards, including conditions for repurchase, termination or cancellation, issue price and repurchase price; and
	•	all other terms and conditions upon which each award may be granted in accordance with this plan.

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	Physiome Sciences, Inc. 1997 Stock Option Plan

	Recapitalization and Acquisition of Predix Pharmaceuticals Ltd.

	•	created a new class of Class A common stock, or the Class A common stock;
	•	reclassified all outstanding shares of its then existing Series A convertible preferred stock into a newly created Series A convertible preferred stock, or the New Series A stock , on a 1-for-0.022104 basis;
	•	reclassified all outstanding shares of its then existing Series B convertible preferred stock into New Series A stock on a 1-for-0.035661 basis;

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	•	reclassified all outstanding shares of its then existing Series C convertible preferred stock into New Series A stock on a 1-for-0.084149 basis; and
	•	reclassified all outstanding shares of its then existing Series D convertible preferred stock into a newly created Series B convertible preferred stock, or the New Series B stock, on a 1-for-0.123774 basis.

	•	Eaton Vance Worldwide Health Sciences Portfolio and Finsbury Worldwide Pharma, each an affiliate of OrbiMed Advisors LLC, a beneficial owner of more than five percent of Predix’s common stock, received an aggregate of 103,360 shares of New Series B stock in exchange for an aggregate of 835,072 shares of Predix’s then existing Series D convertible preferred stock. Jonathan Silverstein, a member of the Predix board of directors, is a general partner at OrbiMed Advisors LLC.
	•	PA International Limited, a beneficial owner of more than five percent of Predix’s common stock, received 216,125 shares of New Series A stock in exchange for 2,568,371 shares of Predix’s then existing Series C convertible preferred stock.
	•	SR One Limited, a beneficial owner of more than five percent of Predix’s common stock, received 43,225 shares of New Series A stock in exchange for 1,212,122 shares of Predix’s then existing Series B convertible preferred stock and 28,657 shares of Series B Stock in exchange for 231,528 shares of Predix’s then existing Series D convertible preferred stock.

			Number of				Number of
			Preferred Shares				Ordinary Shares				Equivalent Cash
Name			Purchased				Purchased				Purchase Price
Silvia Noiman, Ph.D.(1)				—				24,000			$	14,692
Oren Becker, Ph.D.(2)				—				24,000				14,692
Frederick Frank(3)				121,556				—				58,280
Yozma II (Israel) L.P.(4)				1,610,158				—				772,110
YVC-Yozma Management & Investments Ltd, as trustees for Yozma II (BVI) L.P.(4)				2,744,594				—				1,316,110
PCM Venture Capital L.P.(4)				1,463,786				—				701,930
OrbiMed Associates LLC(5)				176,636				—				84,690
UBS PW Juniper Crossover Fund LLC(5)				2,471,433				—				1,185,130
Caduceus Private Investments, L.P.(5)				7,254,111				—				3,478,570
	Total			15,842,274				48,000			$	7,262,204

(1)	Dr. Noiman is Predix’s Senior Vice President of Pipeline Management and General Manager of Israel operations.
(2)	Dr. Becker is Predix’s Chief Scientific Officer.
(3)	Mr. Frank is Chairman of the Predix board of directors.

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(4)	Yozma II (Israel) L.P., YVC-Yozma Management & Investment Ltd, as trustees for Yozma II (BVI) L.P. and PCM Venture Capital L.P. are affiliates of the Yozma Group, a beneficial owner of more than five percent of Predix’s voting securities. Yigal Erlich, a member of the Predix board of directors, is the founder and managing partner of the Yozma Group.
(5)	OrbiMed Associates LLC, UBS PW Juniper Crossover Fund LLC and Caduceus Private Investments, L.P. are affiliates of OrbiMed Advisors LLC. In connection with Predix’s acquisition of Predix Pharmaceuticals Ltd., Predix entered into an agreement with OrbiMed Associates LLC, UBS PW Juniper Crossover Fund LLC and Caduceus Private Investments, L.P., or collectively, the OrbiMed Entities, pursuant to which the OrbiMed Entities agreed to indemnify Predix against any and all Israeli capital gains taxes which Predix may be required to pay in connection with Israeli withholding tax obligations in connection with Predix’s purchase of the shares of Predix Pharmaceuticals Ltd. owned by the OrbiMed Entities. This agreement has a term of six years.

			Number of				Number of				Number of
			Shares of Predix				Shares of				Shares of
			Common Stock				New Series A				New Series B				Equivalent Cash
Name			Sold(1)				Stock Sold(1)				Stock Sold(1)				Purchase Price
Silvia Noiman, Ph.D.				816				—				—			$	14,692
Oren Becker, Ph.D.				816				—				—				14,692
Frederick Frank				—				4,507				1,321				58,280
Yozma II (Israel) L.P.				—				59,703				17,508				772,110
YVC-Yozma Management & Investments Ltd, as trustees for Yozma II (BVI) L.P.				—				101,767				29,844				1,316,110
PCM Venture Capital L.P.				—				54,276				15,917				701,930
OrbiMed Associates LLC				—				6,549				1,920				84,690
UBS PW Juniper Crossover Fund LLC				—				91,639				26,874				1,185,130
Caduceus Private Investments, L.P.				—				268,977				78,880				3,478,570
	Total			1,632				587,418				172,264			$	7,626,204

(1)	Each share of New Series A stock and New Series B stock was convertible into ten shares of Predix common stock. In August 2004, the New Series A stock and New Series B stock were converted into shares of Predix common stock or Series AB preferred stock in connection with the initial issuance of Predix’s Series C preferred stock and the recapitalization as described in further detail below.

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							Pro Rata Portion
			Maximum Shares of				of Subsequent
			New Series B Stock				Financings
			Purchasable with				Under Funding
Name			Transaction Warrant				Warrant
Stockholders of Predix Pharmaceuticals Ltd.
Frederick Frank				2,301				0.23	%
Yozma II (Israel) L.P.				30,491				3.05
YVC-Yozma Management & Investments Ltd, as trustees for Yozma II (BVI) L.P.				51,974				5.20
PCM Venture Capital L.P.				27,719				2.77
OrbiMed Associates LLC				3,344				0.33
UBS PW Juniper Crossover Fund LLC				46,801				4.68
Caduceus Private Investments, L.P.				137,372				13.74
Stockholders of Predix
Eaton Vance Worldwide Health Sciences Portfolio				25,511				2.55
Finsbury Worldwide Pharma				15,306				1.53
PA International Limited				85,349				8.53
SR One Limited				28,386				2.84
	Total			454,554				45.50	%

							Options to
			Shares of Class A				Purchase Class A
Name			Common Stock(1)				Common Stock(1)
Michael G. Kauffman, M.D., Ph.D.(2)				59				42,056
Silvia Noiman, Ph.D.				3,641				18,839
Oren Becker, Ph.D.				3,641
Frederick Frank				—				397
	Total			7,341				90,812

(1)	In August 2004, the Class A common stock was converted into shares of Predix common stock in connection with the initial issuance of the Series C preferred stock and the recapitalization as described in further detail below.
(2)	Dr. Kauffman is Predix’s President and Chief Executive Officer and a member of the Predix board of directors.

	Issuances of Series C Preferred Stock and Recapitalization

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			Shares of Series C				Aggregate
Name			Preferred Stock				Purchase Price
SR One Limited				22,689,112			$	5,000,000
Michael G. Kauffman, M.D., Ph.D.				4,538				1,000
Frederick Frank				226,891				50,000
OrbiMed Associates LLC				337,970				74,478
UBS PW Juniper Crossover Fund LLC				4,729,409				1,042,220
Caduceus Private Investments, L.P.				13,881,629				3,059,095
Eaton Vance Worldwide Health Sciences Portfolio				2,337,565				515,129
Hare and Co. FAO: Finsbury Worldwide Pharmaceutical Trust				1,402,539				309,078
Yozma II (Israel) L.P.				2,692,671				593,384
Yozma Venture Capital Ltd.(1)				1,000,613				220,505
YVC-Yozma Management & Investments Ltd, as trustees for Yozma II (BVI) L.P.				4,589,826				1,011,460
PCM Venture Capital L.P.				2,447,924				539,449
	Total			56,340,687			$	12,415,798

(1)	Yozma Venture Capital Ltd. is an affiliate of the Yozma Group.

	•	each share of New Series A stock and New Series B stock held by a stockholder that purchased at least 51 percent of its pro rata portion of Series C preferred stock sold in the financing into ten shares of newly created Series AB preferred stock (convertible on a 1-for-18 basis into shares of Predix common stock) and granted each such stockholder a warrant to purchase shares of newly created Series AB preferred stock at an exercise price of $0.01 per share prior to August 9, 2009; and
	•	each share of New Series A stock and New Series B stock held by a stockholder that did not purchase at least 51 percent of its pro rata portion of Series C preferred stock sold in the financing into 0.5556 shares of Predix common stock.

	•	an aggregate of 732,347 shares of New Series A stock and an aggregate of 720,799 shares of New Series B stock for an aggregate of 14,531,460 shares of Series AB preferred stock and granted warrants to purchase an aggregate of 62,240,212 shares of Series AB preferred stock; and
	•	an aggregate of 335,623 shares of New Series A stock and an aggregate of 743,456 shares of New Series B stock for an aggregate of 599,488 shares of Predix common stock.

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																			Number of
			Number of				Number of				Number of				Number of				Warrants to
			Shares of				Shares of				Shares of				Shares of				Purchase
			New Series A				New Series B				Predix				Series AB				Series AB
			Stock				Stock				Common Stock				Preferred Stock				Preferred Stock
Name			Exchanged				Exchanged				Issued				Issued				Issued
SR One Limited				43,225				28,657				—				718,820				3,619,477
Frederick Frank				4,507				1,321				—				58,280				293,458
OrbiMed Associates LLC				6,549				2,791				—				93,400				470,297
UBS PW Juniper Crossover Fund LLC				91,639				39,061				—				1,307,000				6,581,142
Caduceus Private Investments, L.P.				268,977				114,650				—				3,836,270				19,316,785
Eaton Vance Worldwide Health Sciences Portfolio				—				64,600				—				646,000				3,252,806
Hare and Co. FAO: Finsbury Worldwide Pharmaceutical Trust				—				38,760				—				387,600				1,951,684
Yozma II (Israel) L.P.				59,703				17,508				—				772,110				3,887,808
Yozma Venture Capital Ltd.				—				28,692				—				286,920				1,444,729
YVC-Yozma Management & Investments Ltd, as trustees for Yozma II (BVI) L.P.				101,767				29,844				—				1,316,110				6,627,011
PCM Venture Capital L.P.				54,726				15,917				—				701,930				3,534,430
PA International Limited				216,125				—				120,069				—				—
	Total			847,218				381,801				120,069				10,124,440				50,979,627

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			Number of
			Shares of
			Series C				Aggregate
Name			Preferred Stock				Purchase Price
Astellas Venture Capital LLC(1)				15,882,380			$	3,500,000
Boston Millennia Partners II Limited Partnership(2)				18,843,979				4,152,648
Boston Millennia Partners GmbH & Co. KG(2)				2,683,400				591,341
Boston Millennia Partners II-A Limited Partnership(2)				902,673				198,922
Strategic Advisors Fund Limited Partnership(2)				169,438				37,339
Boston Millennia Associates II Partnership(2)				89,622				19,750
Forward Ventures V, L.P.(3)				24,958,025				5,500,000
CMEA Ventures Life Sciences 2000, L.P.(4)				6,765,046				1,490,813
CMEA Ventures Life Sciences 2000, Civil Law Partnership(4)				406,787				89,644
CMEA Ventures VI, L.P.(4)				12,948,730				2,853,512
CMEA Ventures VI, GmbH & Co. K.G.(4)				299,639				66,031
PA International Limited				6,719,347				1,480,743
	Total			90,669,066			$	19,980,743

(1)	Formerly known as Yamanouchi Venture Capital, LLC. Astellas Venture Capital LLC is a beneficial owner of more than five percent of Predix’s voting securities.
(2)	Boston Millennia Partners GmbH & Co. KG, Boston Millennia Partners II-A Limited Partnership, Strategic Advisors Fund Limited Partnership and Boston Millennia Associates II Partnership are affiliates of Boston Millennia Partners II Limited Partnership, a beneficial owner of more than five percent of Predix’s voting securities. Patrick J. Fortune, Ph.D., a member of the Predix board of directors, is a partner at Boston Millennia Partners.
(3)	Forward Ventures V, L.P. is a beneficial owner of more than five percent of Predix’s voting securities. Joel Martin, Ph.D., a member of the Predix board of directors, is a partner at Forward Ventures.
(4)	CMEA Ventures Life Sciences 2000, L.P., CMEA Ventures Life Sciences 2000, Civil Law Partnership and CMEA Ventures VI, GmbH & Co. K.G. are affiliates of CMEA Ventures VI, L.P., a beneficial owner of more than five percent of Predix’s voting securities. David Collier, M.D., a member of the Predix board of directors, is a General Partner of CMEA Ventures.

	Issuance of Notes and Warrants

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			Number of Warrant
			Shares Exercisable
			for Predix				Principal Amount
Name			Common Stock				of Notes
Caduceus Private Investments, LP				72,149			$	3,403,888.56
OrbiMed Associates LLC				1,757				82,873.00
UBS Juniper Crossover Fund, L.L.C				24,581				1,159,689.58
Finsury Worldwide Pharmaceutical Trust				2,758				130,113.29
S.R. One Limited				19,920				939,817.82
Boston Millennia Partners II Limited Partnership				28,366				1,338,274.19
Boston Millennia Partners II-A Limited Partnership				1,359				64,106.62
Boston Millennia Partners GmbH & Co. KG				4,039				190,571.49
Strategic Advisors Fund Limited Partnership				255				12,033.31
Boston Millennia Associates Partnership				135				6,364.83
CMEA Ventures Life Sciences 2000, L.P.				11,317				533,925.33
CMEA Ventures Life Sciences 2000, Civil Law Partnership				678				32,001.34
CMEA Ventures VI, L.P.				21,656				1,021,683.70
CMEA Ventures VI, GmbH & Co. K.G				503				23,740.07
PA International Limited				11,889				560,916.87
	Total			201,709			$	9,500,000

	Stockholders Agreement

	Agreements with Executive Officers and Directors

	Engagement of Lehman Brothers Inc.

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	Management

	Regulatory Update for Vasovist

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	Reduction-in-Force

	EP-2104R

	Use of Gadolinium-Based Imaging Agents

	Fibrin-Binding Therapeutic Program

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	Schering AG

	Vasovist

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	EP-2104R

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	Schering AG

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	Tyco/ Mallinckrodt

	Daiichi

	Massachusetts General Hospital

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	Prince

	•	Two U.S. patents exclusively licensed from MGH which expire in 2006 in the United States (U.S. Patents 4,899,755 and 4,880,008) as well as their cognate patents in certain foreign countries, including EPO 222,886. This patent has been extended through Supplementary Protection Certificates for Primovist through May 2011 in certain European countries. These patents generally relate to MRI signal generation technology, albumin binding with metal chelates and liver targeting metal chelates, and U.S. Patent 4,880,008 relates to Primovist and MultiHance, for which EPIX receives a royalty on sales, and Vasovist.

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	•	Eight U.S. patents owned by EPIX as well as their cognate patents and applications in certain foreign countries which relate to Vasovist:

	•	U.S. Patent 5,919,967, “Process for Synthesizing Phosphodiesters” (granted July 6, 1999; expires April 11, 2017);
	•	U.S. Patent 6,548,044, “Imaging Sexual Response” (granted April 15, 2003; expires November 21, 2020);
	•	U.S. Patent 6,549,798, “Magnetic Resonance Angiography Data” (granted April 15, 2003; expires February 7, 2021);
	•	U.S. Patent 6,676,929, “Diagnostic Imaging Contrast Agents With Extended Blood Retention” (granted January 13, 2004; expires February 1, 2015; however, the USPTO has indicated that the patent is entitled to 114 days of patent term adjustment);
	•	U.S. Patent 6,861,045, “Contrast-enhanced diagnostic imaging method for monitoring interventional therapies” (granted March 1, 2005; expires October 2, 2017; however the USPTO has indicated that the patent is entitled to 424 days of patent term adjustment);
	•	U.S. Patent 6,925,321, “Magnetic Resonance Angiography Data” (granted August 2, 2005; expires February 7, 2021);
	•	U.S. Patent 6,969,507, “Imaging Sexual Response” (granted November 29, 2005; expires November 21, 2020; however the USPTO has indicated that the patent is entitled to 117 days of patent term adjustment); and
	•	U.S. Patent 7,011,815, “Diagnostic Imaging Contrast Agents with Extended Blood Retention” (granted March 14, 2006; expires February 1, 2015).

	•	Four U.S. patents owned by EPIX as well as their cognate patents and applications in certain foreign countries which relate to EP-2104R or other EPIX research projects:

	•	U.S. Patent 5,582,814, “Contrast Agents for Diagnostic Imaging” (granted December 10, 1996; expires April 15, 2014);
	•	U.S. Patent 6,652,835, “Targeting Multimeric Imaging Agents Through Multilocus Binding” (granted November 25, 2003; expires July 28, 2020);
	•	U.S. Patent 6,709,646, “Bioactivated Diagnostic Imaging Contrast Agents” (granted March 23, 2004; expires March 25, 2017; however, the USPTO has indicated that the patent is entitled to 99 days of patent term adjustment); and
	•	U.S. Patent 6,991,775, “Peptide-based multimeric targeted contrast agents” (granted January 31, 2006; expires July 30, 2022).

	•	Twenty-three U.S. utility applications in prosecution as well as their cognate applications in certain foreign countries and five provisional utility applications. Some of these relate to MRI, Vasovist and methods of use, EP-2104R and methods of use, and others to therapeutics and methods of use.

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	•	performance of pre-clinical laboratory and animal studies;
	•	submission to the FDA of an application for an investigational new drug application, or IND, which must become effective before human clinical trials may commence;
	•	completion of adequate and well-controlled human clinical trials to establish the safety and efficacy of the pharmaceutical for its intended use;
	•	submission to the FDA of an NDA;

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	•	satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance; and
	•	FDA review and approval of the NDA.

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	Revenue Recognition

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	•	EPIX calculates its development costs directly related to Vasovist.
	•	EPIX obtains cost reports, or an estimate of costs, from Schering AG for costs incurred by Schering AG related to the development of Vasovist during the same period. Where estimates are used, EPIX reviews the estimates and records adjustments in the subsequent quarter when EPIX receives actual results from Schering AG. To date, there have been no material adjustments.
	•	EPIX multiplies its and Schering AG’s development costs by approximately 50% based on the contractual allocation of work contemplated under the agreement.
	•	EPIX then records the net difference as development revenue if the balance results in a payment to EPIX and negative revenue if the balance results in a payment to Schering AG.

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	Research and Development Expenses

	Employee Stock Compensation

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	Three Months Ended March 31, 2006 versus 2005

	Revenues

	Research and Development Expenses

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Research and Development		Q1 2005				Q1 2006
Vasovist		$	1,611,160			$	1,221,032
EP-2104R			1,410,916				751,862
Other research			2,511,075				2,020,067
Total research and development expense			5,533,151				3,992,961

	•	EPIX conducts its clinical trials in accordance with specific protocols, which it has filed with the FDA or other relevant authorities. If the FDA requires EPIX to perform additional trials, to perform additional procedures in its trials or to increase patient numbers in those trials, EPIX could incur significant additional costs and additional time to complete its clinical trials, assuming EPIX is able to reach agreement with the FDA on protocols for any additional studies or procedures.
	•	EPIX relies on third-party clinical trial centers to find suitable patients for its clinical trial program. If these clinical trial centers do not find suitable patients in the timeframe for which EPIX has planned, EPIX will not be able to complete its clinical trials according to its expected schedule.
	•	EPIX relies on third-party contract research organizations for a variety of activities in its development program, including conducting blinded reading activities, lab testing and analysis of clinical samples, data collection, cleanup and analysis and drafting study reports and regulatory submissions.
	•	The length of time that the FDA or other regulatory authorities take to review EPIX’s regulatory submissions and the length of time it takes EPIX to respond to the FDA or other regulatory authorities’ questions can also vary widely. In January 2005, EPIX received an approvable letter from the FDA for Vasovist in which the FDA requested additional clinical trials to demonstrate efficacy prior to approval. In May 2005, EPIX submitted its response to the approvable letter received from the FDA in January 2005 and the response was accepted by the FDA as a complete response in June 2005. In November 2005, EPIX received a second approvable letter from the FDA for Vasovist in which the FDA again requested an additional clinical trial and a re-read, or reanalysis, of images obtained in certain of the previously completed Phase III trials by a new group of radiologists. EPIX has filed a formal appeal with the FDA asking the FDA to approve Vasovist and to utilize an advisory committee as part of the appeal process. The process of obtaining agreement with the FDA for conducting necessary clinical trials, and the outcome of EPIX’s appeal of the second approvable letter is subject to significant uncertainties in terms of timing, costs and outcome.
	•	EPIX’s partner, Schering AG, is responsible for the commercial launch and marketing of Vasovist in Europe, where Vasovist has been approved for commercial sale and is currently being marketed by Schering AG, and in the United States, where Vasovist is not approved for commercial sale.

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	General and Administrative Expenses

	Restructuring Costs

	Interest Income and Interest Expense

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	Provision for Income Taxes

	Year ended December 31, 2005 and 2004

	Revenues

	Research and Development Expenses

Research and Development		2004				2005
Vasovist		$	7,767,945			$	5,311,856
EP-2104R			7,125,252				5,143,486
Other research			6,980,794				10,320,429
Total research and development expense			21,873,991				20,775,771

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	•	EPIX conducts EPIX’s clinical trials in accordance with specific protocols, which EPIX has filed with the FDA or other relevant authorities. If the FDA requires EPIX to perform additional trials, to perform additional procedures in EPIX’s trials or to increase patient numbers in those trials, EPIX could incur significant additional costs and additional time to complete EPIX’s clinical trials, assuming EPIX is able to reach agreement with the FDA on protocols for any additional trials or procedures.
	•	EPIX relies on third party clinical trial centers to find suitable patients for EPIX’s clinical trial program. If these clinical trial centers do not find suitable patients in the timeframe for which EPIX has planned, EPIX will not be able to complete EPIX’s clinical trials according to EPIX’s expected schedule.
	•	EPIX relies on third party contract research organizations for a variety of activities in EPIX’s development program, including conducting blinded reading activities, lab testing and analysis of clinical samples, data collection, cleanup and analysis and drafting study reports and regulatory submissions.
	•	The length of time that the FDA or other regulatory authorities take to review EPIX’s regulatory submissions and the length of time it takes EPIX to respond to the FDA or other regulatory authorities’ questions can also vary widely. In January 2005, EPIX received an approvable letter from the FDA for Vasovist in which the FDA requested additional clinical studies to demonstrate efficacy prior to approval. In May 2005, EPIX submitted EPIX’s response to the approvable letter received from the FDA in January 2005 and it was accepted by the FDA as a complete response in June 2005. In November 2005, EPIX received a second approvable letter from the FDA for Vasovist in which the FDA again requested an additional clinical trial and a re-read, or reanalysis, of images obtained in certain of the previously completed Phase III trials by a new group of radiologists. EPIX has filed a formal appeal with the FDA asking the FDA to approve Vasovist and to utilize an advisory committee as part of the appeal process. The process of obtaining agreement with the FDA for conducting necessary clinical trials and the outcome of EPIX’s appeal of the second approvable letter is subject to significant uncertainties in terms of timing, costs and success.
	•	EPIX’s partner, Schering AG, is responsible for the commercial launch and marketing of Vasovist in Europe, where Vasovist has been approved for commercial sale and is currently marketed by Schering AG, and in the United States, where Vasovist is not approved for commercial sale.

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	General and Administrative Expenses

	Restructuring Costs

	Interest Income and Interest Expense

	Provision for Income Taxes

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	Years ended December 31, 2004 and 2003

	Revenues

	Research and Development Expenses

Research and Development		2003				2004
Vasovist		$	17,734,396			$	7,767,945
EP-2104R			4,958,513				7,125,252
Other research			5,330,612				6,980,794
Total research and development expense			28,023,522				21,873,991

	General and Administrative Expenses

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	Interest Income and Interest Expense

	Provision for Income Taxes

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						Payments Due by Period
						Less Than				1-3				3-5				More Than
Contractual Obligations		Total				1 Year				Years				Years				5 Years
Long-term debt obligations, including interest payments		$	116,375,000			$	3,000,000			$	6,000,000			$	6,000,000			$	101,375,000
Operating lease obligations			2,627,996				1,303,059				1,324,937				—
Purchase obligations			5,933,866				5,764,188				169,678				—				—
Total		$	124,936,862			$	10,067,247			$	7,494,615			$	6,000,000			$	101,375,000

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			Shares Beneficially
			Owned
Name and Address **			Number				Percent
Prescott Group Capital Management, L.L.C.(1)				1,712,334				7.35	%
	1924 South Utica, Suite 1120
	Tulsa, Oklahoma 74104-6529
GLG Partners LP(2)				1,173,975				5.04	%
	1 Curzon Street
	London W2J 5HB
	England
Andrew C.G. Uprichard, M.D.(3)				80,500				*
Robert Pelletier, CPA(4)				25,131				*
Michael J. Astrue(5)				—				*
Michael D. Webb(6)				32,666				*
Peyton J. Marshall, Ph.D.(7)				64,000				*
Christopher F.O. Gabrieli(8)				225,784				*
Gregory D. Phelps(9)				21,667				*
Mark Leuchtenberger(10)				13,334				*
Peter Wirth, Esq.(11)				60,000				*
Michael Gilman, Ph.D.				—				*
Robert J. Perez				—				*
All current directors and executive officers as a group (7 persons)(12)				426,416				1.83	%

	*	Represents beneficial ownership of less than 1% of the outstanding shares of EPIX common stock.

	**	Addresses are given for beneficial owners of more than 5% of outstanding EPIX common stock only.

	(1)	Includes (a) 1,630,334 shares of EPIX common stock held by the Prescott Group Aggressive Small Cap Master Fund, G.P., of which Prescott Group Aggressive Small Cap, L.P. and Prescott Group Aggressive Small Cap II, L.P. are general partners, and (b) 82,000 shares of EPIX common stock held by Phil Frohlich. Prescott Group Capital Management, L.L.C. serves as the general partner of Prescott Group Aggressive Small Cap, L.P. and Prescott Group Aggressive Small Cap II, L.P. and may direct Prescott Group Aggressive Small Cap, L.P. and Prescott Group Aggressive Small Cap II, L.P., the general partners of Prescott Group Aggressive Small Cap Master Fund, G.P., in connection

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		with the voting and disposition of the 1,630,334 shares of EPIX common stock held by Prescott Group Aggressive Small Cap Master Fund, G.P. As principal of Prescott Group Capital Management, L.L.C., Mr. Frohlich may direct the vote and disposition of the 1,630,334 shares of EPIX common stock held by Prescott Group Aggressive Small Cap Master Fund, G.P. and the 82,000 shares of EPIX common stock held by himself, individually. This information is based solely on a Schedule 13G filed by Prescott Group Capital Management, L.L.C. with the Securities and Exchange Commission on January 30, 2006, which reported ownership as of October 10, 2005.
	(2)	Includes the following holdings, of which GLG Partners LP, GLG Partners Limited, Noam Gottesman, Pierre Lagrange and Emmanuel Roman may be deemed the beneficial owner: (a) 752,398 shares of EPIX common stock held by GLG North American Opportunity Fund, (b) 3,771 shares of EPIX common stock held by GLG Investments PLC through its subfund, GLG Balanced Fund, (c) 74,469 shares of EPIX common stock held by GLG Investments PLC through its subfund, GLG Capital Appreciation Fund, (d) 254,300 shares of EPIX common stock held by GLG Investments PLC through its subfund, GLG North American Equity Fund, (e) 22,971 shares of EPIX common stock held by GLG Investments IV PLC through its subfund, GLG Capital Appreciation (Distributing) Fund, (f) 5,696 shares of EPIX common stock held by CITI GLG North American Hedge Fund Ltd., (g) 22,370 shares of EPIX common stock held by Lyxor North American Alternative Equity Fund Ltd., and (h) 38,000 shares of EPIX common stock held by The Century Fund SICAV, or collectively, the Funds. GLG Partners LP, an English limited partnership, acts as the investment manager of each of the Funds and has voting and dispositive power over the securities held by the Funds. The general partner of GLG Partners LP is GLG Partners Limited, an English limited company. The shareholders of GLG Partners Limited are Noam Gottesman, Pierre Lagrange, Philippe Jabre and Lehman (Cayman) Limited, a subsidiary of Lehman Brothers Holdings, Inc., a publicly-held entity. The managing directors of GLG Partners Limited are Noam Gottesman, Pierre Lagrange and Emmanuel Roman, and as a result, each has voting and dispositive power over the securities held by the Funds. GLG Partners LP, GLG Partners Limited, Noam Gottesman, Pierre Lagrange and Emmanuel Roman disclaim beneficial ownership of the securities held by the Funds except for their pecuniary interest therein. This information is based solely on a Schedule 13G filed by GLG Partners LP with the Securities and Exchange Commission on April 11, 2006, which reported ownership as of April 3, 2006.
	(3)	Represents shares of EPIX common stock subject to options exercisable by Dr. Uprichard within the 60-day period following June 28, 2006.
	(4)	Consists of 1,561 shares of EPIX common stock owned of record by and 23,570 shares of EPIX common stock subject to options exercisable by Mr. Pelletier within the 60-day period following June 28, 2006.
	(5)	Mr. Astrue resigned as Interim Chief Executive Officer on May 5, 2006.
	(6)	Consists of 14,166 shares of EPIX common stock owned of record by Mr. Webb and 18,500 shares of EPIX common stock held by Mr. Webb’s wife as to which Mr. Webb disclaims beneficial ownership. Effective September 14, 2005, Mr. Webb resigned as Chief Executive Officer and member of the EPIX board of directors, but continued to serve as a consultant to EPIX through December 31, 2005.
	(7)	Represents 64,000 shares of EPIX common stock owned of record by Mr. Marshall. Effective July 1, 2005, Mr. Marshall resigned as Senior Vice President, Finance and Administration and Chief Financial Officer of EPIX.
	(8)	Consists of 152,450 shares of EPIX common stock owned of record by Mr. Gabrieli and 73,334 shares of EPIX common stock subject to options exercisable by Mr. Gabrieli within the 60-day period following June 28, 2006.

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	(9)	Represents shares of EPIX common stock subject to options exercisable by Mr. Phelps within the 60-day period following June 28, 2006.

(10)	Represents shares of EPIX common stock subject to options exercisable by Mr. Leuchtenberger within the 60-day period following June 28, 2006.
(11)	Represents shares of EPIX common stock subject to options exercisable by Mr. Wirth within the 60-day period following June 28, 2006. Mr. Wirth has notified EPIX that he is not standing for reelection to the EPIX board of directors at the EPIX 2006 annual stockholders meeting.
(12)	Includes 272,405 shares of EPIX common stock subject to options exercisable within the 60-day period following June 28, 2006. See also footnotes (3), (4) and (8) through (11) above.

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	•	incorporate greater selectivity into its drug candidates by examining the interaction of suggested compounds with its structures in silico, and eliminating those that may have affinity for other proteins, which Predix believes will result in drug candidates with favorable side effect profiles;
	•	identify some potential safety, pharmacokinetics (i.e., the determination of how much of a drug is absorbed, distributed, metabolized and eliminated by the body) and toxicology issues through in silico predictions prior to Predix’s medicinal chemists synthesizing and testing actual compounds; and
	•	synthesize approximately 10-30 fold fewer compounds than in traditional GPCR or ion channel lead optimization programs by adopting structure-based (i.e., rational) lead optimization strategies and evaluating compounds in silico prior to the synthesis of actual compounds, effectively reducing the cycle time for the historically longest phase of drug discovery.

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*

Clinical development of PRX-00023 for a depression indication has not been initiated. Predix expects to be able to rely on the clinical trials completed to date for PRX-00023 to begin clinical development for a depression indication with Phase II clinical trials. Predix currently intends to seek a collaboration to develop PRX-00023 for depression, but may initiate such clinical trials in depression independently if circumstances allow.

	Disease and Market Overview

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	•	poor tolerability at therapeutic doses;
	•	rapid metabolism, resulting in a short half-life and, therefore, requiring multiple daily dosing; and
	•	the requirement of slow dose escalation to effective doses because of nausea and lightheadedness, which are side effects of azapirones believed to be due in part to their binding to off-target GPCRs.

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	PRX-00023

	Phase III Clinical Trial

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	Phase IIa Clinical Trial Results

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	Phase I Clinical Trial Results

	Disease and Market Overview

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	Improvement in cognition and memory

	•	5-HT4 stimulation has been shown in pre-clinical studies to increase ACh levels in the brain by stimulating its release and/or production. 5-HT4 stimulation also has been shown in animal models to improve cognitive function.
	•	5-HT4 stimulation has been shown in animal models to overcome abnormal cognitive function induced by other agents that block ACh function, suggesting that 5-HT4 stimulation leads to an increase in ACh production and/or release specifically in the brain.
	•	This mechanism may be complementary to that of acetylcholinesterase inhibitors. It has been demonstrated in pre-clinical models of Alzheimer’s disease by Predix and other groups that cognition may be enhanced by either using a 5-HT4 agonist as monotherapy or in combination with acetylcholinesterase inhibitors.

	Slowing disease progression

	•	Amyloid precursor protein, or APP, is a protein that can be cut into smaller molecules which can stimulate Ab plaque-forming or non-plaque-forming signaling cascades, or pathways.
	•	5-HT4 stimulation may promote a pathway in APP regulation thought to be non-plaque forming.
	•	By activating this pathway, 5-HT4 stimulation has been shown in animal models to reduce the plaque-forming Ab isoforms of APP.

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	PRX-03140

	Planned Phase IIa Clinical Trial

	Phase Ib Clinical Trial

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	Phase I Clinical Trial Results

	Disease and Market Overview

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	PRX-08066

	•	caused rapid reductions in pulmonary blood pressure in hypoxia-induced mouse and rat models of pulmonary arterial hypertension without affecting normal pulmonary or systemic blood pressures;
	•	reduced the hypoxia-dependent increase in pulmonary blood pressure in a rat model of short-term hypoxia without altering systemic blood pressure, suggesting a role for PRX-08066 in the treatment of acute mountain sickness and hypoxia-induced pulmonary hypertension; and
	•	potently blocked the function of an enzyme named mitogen-activated protein kinase which has been linked to the proliferation of blood-vessel-associated smooth muscle cells leading to the progression of pulmonary arterial hypertension.

	Phase Ib Clinical Trial

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	Phase I Clinical Trials

	PRX-07034 for Obesity and Cognitive Impairment

	Phase I Clinical Trial

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Drug
Target		Proposed Indication		Mechanism of Action				Stage		Status
Kv1.5		Atrial fibrillation			Ion channel antagonist			Lead optimization(1)		Efficacy shown in in vitro heart muscle cells
S1P-1		Inflammation, cancer			GPCR modulator			Lead optimization(1)		Efficacy shown in in vivo animal models
CCR-2		Inflammation, rheumatoid arthritis			GPCR modulator			Lead discovery(2)		In silico screening using 3D structure ongoing
CB-1		Obesity, pain			GPCR modulator			Lead discovery(2)		In silico screening using 3D structure ongoing
P2Y(2)		Cystic Fibrosis			GPCR agonist			Modeling(3)		In silico 3D structure modeling
CFTR		Cystic Fibrosis			Ion channel modulator			Modeling(3)		In silico 3D structure modeling

(1)	“Lead optimization” is the process of chemical modification of a lead compound to produce a drug candidate that can enter into pre-clinical and clinical development.
(2)	“Lead discovery” is the process of identifying compounds that have affinity for the target protein and have suitable drug-like properties.
(3)	“Modeling” is the process of predicting in silico the 3D structure of the target GPCR or ion channel protein.

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	•	The first program is focused on the defective Cystic Fibrosis Transmembrane conductance Regulator, or CFTR, ion channel protein. Predix is using its proprietary structure-based technologies to model the structure of this ion channel and identify sites in the channel for therapeutic intervention. Once these sites are identified, Predix aims to use its drug discovery capabilities to discover a drug that restores proper functionality to the channel in patients with cystic fibrosis. If the preliminary program is successful, Predix and CFFT have agreed to negotiate towards a follow-on agreement under which Predix will explore a structure-based approach for the discovery and commercialization of a drug that will target CFTR, with the financial support of CFFT and subject to a royalty payable to CFFT.
	•	The second program is focused on the discovery of a small-molecule agonist to the G-Protein Coupled Receptor known as P2Y(2), which plays a role in cystic fibrosis, using Predix’s proprietary structure-based drug design system. Predix retains the right to develop and commercialize any drug candidates discovered through this second program, and are obligated to make aggregate royalty payments of up to $15 million to CFFT for the first drug candidate that reaches particular regulatory and sales milestones.

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	•	pre-clinical laboratory and animal studies;
	•	submission of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;
	•	adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use; and
	•	FDA approval of a new drug application, or NDA.

	•	Phase I: The drug is initially introduced into healthy human subjects or patients with the disease and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.
	•	Phase II: Involves studies in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

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	•	Phase III: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites. These studies are intended to establish the overall risk-benefit ratio of the product and provide, if appropriate, an adequate basis for product labeling.

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Approximate

Lease Expiration

Location

Square Feet

Use

Date

Maguire Road, Lexington, Massachusetts

27,500

Office & Laboratory

October 15, 2012

Hayetzira Street, Ramat Gan, Israel

6,458

Office & Laboratory

October 14, 2006

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	Revenue Recognition

	Collaboration Revenue

	•	ratably over the development period; or
	•	based upon the level of research services performed during the period of the research contract.

	Other Revenue

	Accrued Expenses

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	•	professional service fees;
	•	contract clinical service fees;
	•	fees paid to data management organizations and investigators in conjunction with clinical trials; and
	•	fees paid to contract manufacturers in conjunction with the production of clinical materials.

	Research and Development

	Stock-based Compensation Expense

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	Revenue

	Research and Development Expense

	•	salaries, benefits and related expenses for personnel engaged in research and development activities;
	•	fees paid to contract research organizations to manage and monitor clinical trials;
	•	fees paid to research organizations in conjunction with pre-clinical studies;
	•	fees paid to access chemical and intellectual property databases;

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	•	costs of materials used in research and development and clinical studies;
	•	academic testing and consulting, license and sponsored research fees paid to third parties; and
	•	costs of facilities and equipment, including depreciation, used in research and development activities.

Drug
Candidate		Disease Indication		Clinical Trial Status
PRX-00023		Generalized anxiety disorder			Phase III ongoing
PRX-03140		Alzheimer’s disease			Completed Phase I
PRX-08066		Pulmonary hypertension			Completed Phase I

	•	the number of sites included in the trials;
	•	the length of time required to enroll suitable patient subjects;
	•	the number of patients that participate in the trials;
	•	the duration of patient follow-up that seems appropriate in view of results; and
	•	the efficacy and safety profile of the drug candidate.

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Clinical				Estimate
Phase		Objective		Completion Period
Phase I		Establish safety in healthy volunteers and occasionally in patients; study how the drug works, is metabolized and interacts with other drugs			1-2 years
Phase II		Evaluate efficacy, optimal dosages and expanded evidence of safety			2-3 years
Phase III		Further evaluate efficacy and safety of the drug candidate in a larger patient population			2-3 years

														Three
														Months				Inception
		Year Ended December 31,												Ended				Through
														March 31,				March 31,
		2003				2004				2005				2006				2006
		(In thousands)
PRX-00023		$	2,340			$	4,584			$	5,917			$	1,887			$	14,728
PRX-03140			—				1,846				4,102				142				6,090
PRX-08066			—				709				6,268				1,074				8,051
		$	2,340			$	7,139			$	16,287			$	3,103			$	28,869

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	General and Administrative Expense

	Investment Income, Net

	Interest Expense

	Three Months Ended March 31, 2006 and 2005

		Three Months Ended
		March 31,
										Percentage
		2006				2005				Change
		(In thousands)
Revenue		$	784			$	153				412	%
Costs and expenses:
Research and development			7,036				6,750				4	%
General and administrative			1,475				942				57	%
Restructuring			30				21				43	%
Total costs and expenses			8,541				7,713				11	%
Loss from operations			(7,757	)			(7,560	)			3	%
Investment income, net			42				152				(72	%)
Interest expense			(6	)			(9	)			(33	%)
Net loss		$	(7,721	)		$	(7,417	)			4	%

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	Revenue

	Research and Development Expense

	General and Administrative Expense

	Restructuring

	Investment Income, Net

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	Interest Expense

	Years Ended December 31, 2005 and 2004

		Year Ended December 31,
										Percentage
		2005				2004				Change
		(In thousands)
Revenue		$	2,300			$	13				17,592	%
Costs and expenses:
Research and development			29,351				16,427				79	%
General and administrative			7,031				3,011				134	%
Restructuring			205				77				166	%
Total costs and expenses			36,587				19,515				87	%
Loss from operations			(34,287	)			(19,502	)			76	%
Investment income, net			614				147				318	%
Interest expense			(30	)			(37	)			(19	%)
Net loss		$	(33,703	)		$	(19,392	)			74	%

	Revenue

	Research and Development Expense

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	General and Administrative Expense

	Restructuring

	Investment Income, Net

	Interest Expense

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	Years Ended December 31, 2004 and 2003

		Year Ended December 31,
										Percentage
		2004				2003				Change
		(In thousands)
Revenue		$	13			$	1,068				(99	)%
Costs and expenses:
Research and development			16,427				14,632				12
General and administrative			3,011				5,782				(48	)
Restructuring			77				5,350				(99	)
Total costs and expenses			19,515				25,764				(24	)
Loss from operations			(19,502	)			(24,696	)			(21	)
Investment income, net			147				142				4
Interest expense			(37	)			(6	)			517
Net loss		$	(19,392	)		$	(24,560	)			(21	)%

	Change in Predix’s Business Focus

	Revenue

	Research and Development Expense

	General and Administrative Expense

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	Restructuring

	Investment Income, Net

	Interest Expense

	Years Ended December 31, 2003 and 2002

		Year Ended December 31,
										Percentage
		2003				2002				Change
		(In thousands)
Revenue		$	1,068			$	551				94	%
Costs and expenses:
Research and development			14,632				8,534				71
General and administrative			5,782				3,223				79
Restructuring			5,350				—				—
Total costs and expenses			25,764				11,757				119
Loss from operations			(24,696	)			(11,206	)			120
Investment income, net			142				591				(76	)
Interest expense			(6	)			(5	)			20
Loss on sale of equipment, and related contract			—				(879	)			(100	)
Net loss before income tax benefit			(24,560	)			(11,499	)			114
Income tax benefit			—				258				(100	)
Net loss		$	(24,560	)		$	(11,241	)			118	%

	Business Focus

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	Revenue

	Research and Development Expense

	General and Administrative Expense

	Investment Income, Net

	Interest Expense

	Loss on Sale of Equipment and Related Contract

	Income Tax Benefit

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	Contractual Obligations

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		Payments Due in
		2006				2007				2008				2009				2010				Thereafter
		(In thousands)
Operating leases		$	1,398			$	1,497			$	1,602			$	1,602			$	1,627			$	1,707
Capital leases			105				51				38				32				7				—

	Funding Requirements

	•	the scope and results of Predix’s research, pre-clinical and clinical development activities;
	•	the timing of, and the costs involved in, seeking regulatory approvals;
	•	the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other patent-related costs, including litigation costs and the results of such litigation;
	•	the extent to which Predix acquires or invest in businesses, products and technologies; and
	•	Predix’s ability to establish and maintain additional collaborations, and the financial terms associated with such collaborations.

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															Percent of
			Number of				Percent of								Preferred
			Shares				Series C				Percent of				Stock and
			Beneficially				Preferred				Preferred				Common
			Owned(1)				Stock				Stock				Stock(2)
5% Stockholders:
OrbiMed Entities(3)				3,464,131				11.6	%			22.2	%			21.2	%
	767 Third Avenue, 30th Floor New York, NY 10017-2023
Yozma Entities(4)				1,627,887				5.5				10.7				10.0
	Ramat Aviv Tower, 11th Floor 40 Einstein Street Tel Aviv, 69102 Israel
PA International Limited(5)				1,028,120				8.2				5.9				6.3
	123 Buckingham Palace Road London SW1 W9SR United Kingdom
SR One Limited(6)				1,521,442				11.6				9.9				9.3
	Four Tower Bridge 200 Barr Harbor Drive, Suite 250 West Conshohocken, PA 19428-2977
Forward Ventures V, L.P.(7)				1,386,556				12.7				9.1				8.5
	9350 Towne Centre Drive, Suite 200 San Diego, CA 92121
Boston Millennia Entities(8)				1,294,658				11.6				8.3				7.9
	30 Rowes Wharf, Suite 500 Boston, MA 02110
Astellas Venture Capital LLC (formerly known as Yamanouchi Venture Capital, LLC)(9)				882,354				8.1				5.8				5.4
	2180 San Hill Road, Suite 460 Menlo Park, CA 94025

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Percent of

Number of

Percent of

Preferred

Shares

Series C

Percent of

Stock and

Beneficially

Preferred

Preferred

Common

Owned(1)

Stock

Stock

Stock(2)

CMEA Entities(10)

1,168,607

10.4

7.5

7.2

One Embarcadero Center, Suite 3250 San Francisco, CA 94111

Directors and Named Executive Officers

Michael G. Kauffman, M.D., Ph.D.(11)

509,743

*

*

3.1

Chen Schor, CPA(12)

173,875

*

*

1.1

Kimberlee C. Drapkin, CPA(13)

49,522

*

*

*

Silvia Noiman, Ph.D.(14)

218,063

*

*

1.3

Oren Becker, Ph.D. (15)

201,178

*

*

1.2

Frederick Frank(16)

40,830

*

*

*

Julian Adams, Ph.D.(17)

5,972

*

*

*

David Collier, M.D.(18)

1,170,497

*

*

7.2

Yigal Erlich(19)

1,630,054

5.5

10.7

10.0

Patrick J. Fortune, Ph.D.(20)

1,296,548

11.6

8.3

7.9

Ted Love, M.D.(21)

5,972

*

*

*

Joel Martin, Ph.D.(22)

1,388,446

12.7

9.1

8.5

Jonathan Silverstein(23)

3,466,437

11.6

22.2

21.2

Ian F. Smith, CPA, ACA(24)

5,555

*

*

*

Executive officers and directors as a group (15 persons)(25)

10,208,538

51.8

58

58.6

	*	Less than 1%

(1)	Includes shares of common stock issuable pursuant to options and warrants exercisable within 60 days of June 28, 2006.
(2)	Predix preferred stock is reported on an as-converted to Predix common stock basis.
(3)	Includes 50,091 shares held by OrbiMed Associates LLC; 346,463 shares held by EatonVance Worldwide Health Sciences Portfolio; 207,877 shares held by Hare and Company FAO: Finsbury Worldwide Pharma; 2,057,481 shares held by Caduceus Private Investment, L.P.; and 700,974 shares held by UBS PW Juniper Crossover Fund, LLC. Also includes 2,758 shares of common stock issuable to Hare and Company FAO: Finsbury Worldwide Pharma upon the exercise of outstanding warrants; 1,757 shares issuable to OrbiMed Associates LLC upon the exercise of outstanding warrants; 72,149 shares issuable to Caduceus Private Investment, L.P. upon the exercise of outstanding warrants; and 24,581 shares issuable to UBS PW Juniper Crossover Fund, LLC. upon the exercise of outstanding warrants. Samuel D. Isaly, a natural person, owns a controlling interest in OrbiMed Advisors LLC and OrbiMed Capital LLC, which have investment management discretion over the shares held by OrbiMed Associates LLC, EatonVance Worldwide Health Sciences Portfolio, Hare and Company FAO: Finsbury Worldwide Pharma, Caduceus Private Investment, L.P. and UBS PW Juniper Crossover Fund, LLC. Mr. Isaly disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.
(4)	Consists of 336,984 shares held by Yozma II (Israel), L.P.; 410,137 shares of common stock owned of record by Yozma Venture Capital Ltd.; 574,412 shares held by YVC-Yozma Management & Investments Ltd., as trustee for Yozma (BVI) L.P.; and 306,354 shares held by PCM Venture Capital L.P. Voting and/or dispositive decisions with respect to the shares held by Yozma II (Israel), L.P., YVC-Yozma Management & Investments Ltd., as trustee for Yozma (BVI) L.P., and PCM Venture Capital L.P. are made by Mr. Erlich, managing partner and one of our directors, Boaz Goldschmidt, general partner, and directors Udi Angel, Yoav Doppelt, Nir Bronstein and Eran Gersht. Voting and/or dispositive decisions with respect to the shares held by Yozma Venture Capital Ltd. are made by its directors, Mr. Angel and Mr. Doppelt. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.

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(5)	Includes 1,016,231 shares held by PA International Limited. Also includes 11,889 shares of common stock issuable to PA International Limited upon the exercise of outstanding warrants. David Cooke, Chris Garrod and Jon Moynihan are the directors of PA International Limited and share voting and/or dispositive power over the shares held by PA International Limited. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.
(6)	Includes 1,501,522 shares held by SR One Limited. Also includes 19,920 shares of common stock issuable to SR One Limited upon the exercise of outstanding warrants. Voting and/or dispositive decisions with respect to the shares held by SR One Limited are made by Adrian G. Rawcliffe, President, Philip L. Smith, Vice President, and Kent Gossett, Investment Manager. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.
(7)	Voting and/or dispositive decisions with respect to the shares held by Forward Ventures V, L.P. are made by its members, Joel Martin, one of our directors, Stuart J.M. Collinson, Standish M. Fleming, Ivor Royston and Maria C. Walker. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.
(8)	Includes 1,046,887 shares held by Boston Millennia Partners II Limited Partnership; 149,077 shares held by Boston Millennia Partners GmbH & Co. KG; 50,148 shares held by Boston Millennia Partners II-A Limited Partnership; 9,413 shares held by Strategic Advisors Fund Limited Partnership; and 4,979 shares held by Boston Millennia Associates II Partnership. Also includes 28,366 shares of common stock issuable to Boston Millennia Partners II Limited Partnership upon the exercise of outstanding warrants; 4,039 shares issuable to Boston Millennia Partners GmbH & Co. KG upon the exercise of outstanding warrants; 1,359 shares issuable to Boston Millennia Partners II-A Limited Partnership upon the exercise of outstanding warrants; 254 shares issuable to Strategic Advisors Fund Limited Partnership upon the exercise of outstanding warrants; and 135 shares issuable to Boston Millennia Associates II Partnership upon the exercise of outstanding warrants. A. Dana Callow, Robert S. Sherman and Martin J. Hernon are general partners of Boston Millennia Partners, as sponsor of these investment funds. Messrs. Callow, Sherman and Hernon may be deemed to have shared voting and dispositive power with respect to these shares. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.
(9)	Voting and/or dispositive decisions with respect to the shares held by Astellas Venture Capital LLC are made by Yoshitaka Yoneyama, President and Chief Executive Officer, Kazumasa Saito, Chief Financial Officer and Treasurer, and Satoshi Nozaki, Secretary. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.

(10)

Includes 375,835 shares held by CMEA Ventures Life Sciences 2000, L.P.; 22,599 shares held by CMEA Ventures Life Sciences 2000, Civil Law Partnership; 719,373 shares held by CMEA Ventures VI, L.P.; and 16,646 shares held by CMEA Ventures VI, GmbH & Co. K.G. Also includes 11,317 shares of common stock issuable to CMEA Ventures Life Sciences 2000, L.P. upon the exercise of outstanding warrants; 678 shares issuable to CMEA Ventures Life Sciences 2000, Civil Law Partnership upon the exercise of outstanding warrants; 21,656 shares issuable to CMEA Ventures VI, L.P. upon the exercise of outstanding warrants; and 503 shares issuable to CMEA Ventures VI, GmbH & Co. K.G. upon the exercise of outstanding warrants. CMEA Ventures LS Management 2000 L.P. is the general partner of CMEA Ventures Life Sciences 2000, L.P. and CMEA Ventures Life Sciences 2000, Civil Law Partnership. David Collier, one of our directors, Thomas Baruch, Karl Handelsman and Gordon Hull are the general partners of CMEA Ventures LS Management 2000 L.P. and share voting and/or dispositive power over the shares held by CMEA Ventures Life Sciences 2000, L.P. and CMEA Ventures Life Sciences 2000, Civil Law Partnership. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any. CMEA Ventures VI Management L.P. is the general partner of CMEA Ventures VI, L.P. and CMEA Ventures VI, GmbH & Co. K.G. Dr. Collier, Mr. Baruch, Mr. Handelsman, Mr. Hull, Faysal Sohail and James Watson are the general partners of CMEA Ventures VI Management L.P. and share voting and/or dispositive power over the shares held by

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	CMEA Ventures VI, L.P. and CMEA Ventures VI, GmbH & Co. K.G. Each disclaims beneficial ownership of such shares except to the extent of their pecuniary interest, if any.
(11)	Includes 360,603 shares issuable to Dr. Kauffman upon exercise of stock options.
(12)	Includes 90,483 shares issuable to Mr. Schor upon exercise of stock options.
(13)	Consists of 49,522 shares issuable to Ms. Drapkin upon exercise of stock options.
(14)	Includes 213,606 shares issuable to Dr. Noiman upon exercise of stock options.
(15)	Includes 196,721 shares issuable to Dr. Becker upon exercise of stock options.
(16)	Includes 5,448 shares issuable to Mr. Frank upon exercise of stock options.
(17)	Consists of 5,972 shares issuable to Dr. Adams upon exercise of stock options.
(18)	Includes of 1,890 shares issuable to Dr. Collier upon exercise of stock options. Also includes the shares set forth in footnote (10) above.
(19)	Includes 2,167 shares issuable to Mr. Erlich upon exercise of stock options. Also includes the shares set forth in footnote (4) above.
(20)	Includes 1,890 shares issuable to Dr. Fortune upon exercise of stock options. Also includes the shares set forth in footnote (8) above. Dr. Fortune, one of Predix’s directors, is a partner of Boston Millennia Partners, the sponsor of these investment funds. Dr. Fortune disclaims beneficial ownership of the shares held by each of the Boston Millennia funds, except to the extent of his pecuniary interest, if any.
(21)	Includes 5,556 shares issuable to Dr. Love upon exercise of stock options.
(22)	Includes 1,890 shares issuable to Dr. Martin upon exercise of stock options. Also includes the shares set forth in footnote (7) above.
(23)	Includes 2,306 shares issuable to Mr. Silverstein upon exercise of stock options. Also includes the shares set forth in footnote (3) above. As a general partner of OrbiMed Advisors LLC and OrbiMed Capital LLC, Mr. Silverstein may be deemed to have beneficial ownership of such shares. Mr. Silverstein disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.
(24)	Consists of 5,555 shares issuable to Mr. Smith upon exercise of stock options.
(25)	Consists of shares set forth in footnotes 11 through 24, and 45,846 shares issuable to one executive officer not named in the table upon exercise of stock options.

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	•	fix its rights, preferences and restrictions;
	•	fix the number of shares and designation of any series;
	•	provide voting rights to the shares of any series in addition to those provided by law;

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	•	provide conversion privileges to the shares of any series and the terms and conditions of such conversion; and
	•	determine the rights of the shares of any series in the event of voluntary or involuntary liquidation, dissolution or winding up of EPIX, and the relative rights of priority, if any, of payment of shares of any series.

	•	alter or change the rights, preferences or privileges of any series of Predix preferred stock;
	•	authorize, create or designate any shares of capital stock or other securities of Predix (including securities convertible into or exercisable for any such security) with preference to or on parity with the Series C preferred stock with respect to dividends, liquidation, redemption, voting or the like;
	•	increase the authorized number of shares of Predix preferred stock, Predix common stock or any series thereof; and
	•	authorize or effect any merger or consolidation of Predix with or into any other company or entity, or any sale, license as licensor, lease as lessor, or other transfer or disposal of all or substantially all of the assets of Predix.

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	•	alter or change the rights, preferences or privileges of any series of Predix preferred stock;
	•	authorize, create or designate any shares of capital stock or other securities of Predix (including securities convertible into or exercisable for any such security) with preference to or on parity with the Series C preferred stock with respect to dividends, liquidation, redemption, voting or the like;
	•	increase or decrease the authorized number of shares of Predix preferred stock, Predix common stock or any series thereof;
	•	increase or decrease the authorized size of the Predix board of directors in excess of, or to less than, ten members;
	•	authorize or effect any merger or consolidation of Predix with or into another company or entity, or any sale, license as licensor, lease as lessor, spin off, sale of voting control, partnering transaction or other transfer or disposal of all or a substantial portion of Predix’s assets outside of the ordinary course of business;
	•	effect any recapitalization or reorganization of any class of outstanding capital stock of Predix;
	•	authorize or effect any transaction or series of related transactions resulting in a liquidation event; and
	•	purchase, lease or otherwise acquire all or substantially all of the assets or capital stock of another entity (whether by merger, consolidation, asset purchase or otherwise).

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	•	Article Sixth, which sets forth the election and removal procedures of the EPIX board of directors;
	•	Article Eleventh, which sets forth the stockholder voting requirements for certain actions to be taken by EPIX; and
	•	Article Twelfth, which prohibits EPIX stockholder action to be taken by written consent.

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	•	acted in good faith;
	•	acted in a manner he or she believed to be in the best interests of the corporation; and
	•	with respect to any criminal action, had no reasonable cause to believe the conduct was unlawful.

	•	breach of his or her duty of loyalty to the corporation or its stockholders;
	•	act or omission not in good faith or involving intentional misconduct or a knowing violation of the law;
	•	violation of Section 174 of the DGCL regarding unlawful payment of dividends or unlawful stock purchases or redemptions;
	•	transaction from which the director received any improper personal benefit; or
	•	act or omission that took place before the date of adoption of the provision in the certificate of incorporation eliminating or limiting the liability of a director for breaches of fiduciary duties.

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	•	the merger agreement does not amend the constituent corporation’s certificate of incorporation;
	•	each share of stock of the constituent corporation outstanding before the merger is an identical outstanding or treasury share of the surviving corporation after the merger; and
	•	either no shares of common stock of the surviving corporation are to be issued or delivered by way of the merger or, if common stock will be issued or delivered, it will not increase the number of outstanding shares of common stock immediately before the merger by more than 20%.

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	•	listed on a national securities exchange, designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc., or
	•	held of record by more than 2,000 stockholders.

	•	shares of the surviving corporation,
	•	shares of another corporation that will be listed on a national securities exchange, designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 stockholders, or
	•	cash in place of fractional shares.

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	•	because it is a condition to Predix’s obligations to effect the merger that the EPIX common stock issued in the merger be approved for listing on The NASDAQ Global Market as of consummation of the merger;
	•	because the listing standards of The NASDAQ Global Market will require EPIX to have, among other things, a $5.00 per share minimum bid price upon the closing of the merger, the reverse stock split may be necessary in order to consummate the merger;
	•	the EPIX board of directors believes effecting the reverse stock split may be an effective means of avoiding a delisting of EPIX common stock from The NASDAQ Global Market in the future; and
	•	the EPIX board of directors believes a higher stock price may help generate investor interest in EPIX and help EPIX attract and retain employees.

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	•	the market price per share of EPIX common stock after the reverse stock split will rise in proportion to the reduction in the number of shares of EPIX common stock outstanding before the reverse stock split;
	•	the reverse stock split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks;
	•	the reverse stock split will result in a per share price that will increase EPIX’s ability to attract and retain employees and other service providers; or
	•	meet the requirements for inclusion for trading on The NASDAQ Global Market after the merger.

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		Year Ended
		December 31, 2005				December 31, 2004
Audit Fees:(1)		$	265,500			$	393,000
Audit-Related Fees:(2)			—				—
Tax Fees:(3)			17,700				27,872
All Other Fees:(4)			—				—
Total			283,200				420,872

(1)	Audit Fees consist of fees for professional services rendered for the audit of EPIXs annual financial statements, a review of the interim financial statements included in the quarterly reports, a review of internal controls of financial reporting (Section 404) and services normally provided by Ernst & Young LLP in connection regulatory filings, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits.
(2)	Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of an audit or review of EPIX’s financial statements and are not reported under “Audit Fees.” The category includes fees for the review of EPIX’s employee benefit plans. In 2004, EPIX hired an accounting firm other than Ernst & Young LLP to audit the employee benefit plans.
(3)	Tax Fees consist of fees for professional services rendered in preparing the federal and state tax returns, and for providing tax compliance, tax advice and tax planning assistance.
(4)	All Other Fees consist of fees for services other than the services reported above.

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	(a)	EPIX’s Annual Report on Form 10-K for the year ended December 31, 2005 filed on March 1, 2006 (File No. 000-21863);
	(b)	EPIX’s Current Report on Form 8-K filed on February 1, 2006 reporting the February 1, 2006 event (File No. 000-21863);
	(c)	EPIX’s Current Report on Form 8-K filed on February 16, 2006 reporting the February 10, 2006 event (File No. 000-21863);
	(d)	EPIX’s Current Report on Form 8-K filed on March 9, 2006 reporting the March 7, 2006 event (File No. 000-21863);
	(e)	EPIX’s Current Report on Form 8-K filed on April 3, 2006 reporting the April 3, 2006 event (File No. 000-21863);
	(f)	EPIX’s Current Report on Form 8-K filed on April 26, 2006 reporting the April 21, 2006 event (File No. 000-21863);
	(g)	EPIX’s Annual Report, as amended, on Form 10-K/ A for the year ended December 31, 2005 filed on April 28, 2006 (File No. 000-21863);
	(h)	EPIX’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 filed on May 5, 2006 (File No. 000-21863);
	(i)	EPIX’s Current Report on Form 8-K filed on May 8, 2006 reporting the May 5, 2006 event (File No. 000-21863);
	(j)	EPIX’s Current Report on Form 8-K filed on May 24, 2006 reporting the May 19, 2006 event (File No. 000-21863); and
	(k)	EPIX’s Current Report on Form 8-K filed on July 12, 2006 reporting the July 10, 2006 event (File No. 000-21863).

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EPIX FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm			F-2
Balance Sheet as of December 31, 2004 and 2005			F-3
Statements of Operations for the Years Ended December 31, 2003, 2004 and 2005			F-4
Statements of Stockholders’ Equity for the Years Ended December 31, 2003, 2004 and 2005			F-5
Statements of Cash Flows for the Years Ended December 31, 2003, 2004 and 2005			F-6
Notes to Financial Statements			F-7
Balance Sheet as of December 31, 2005 and March 31, 2006 (unaudited)			F-27
Statements of Operations for the Three Months Ended March 31, 2005 and 2006 (unaudited)			F-28
Statements of Cash Flows for the Three Months Ended March 31, 2005 and 2006 (unaudited)			F-29
Notes to Financial Statements (unaudited)			F-30
PREDIX CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Auditors			F-38
Consolidated Balance Sheet as of December 31, 2004 and 2005 and March 31, 2006 (unaudited)			F-39
Consolidated Statements of Operations for the Years Ended December 31, 2003, 2004 and 2005 and for the Three Months Ended March 31, 2005 and 2006 (unaudited)			F-40
Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2003, 2004 and 2005 and for the Three Months Ended March 31, 2006 (unaudited)			F-41
Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2004 and 2005 and for the Three Months Ended March 31, 2005 and 2006 (unaudited)			F-42
Notes to Consolidated Financial Statements			F-43

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	/s/ Ernst & Young LLP

F-2

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Table of Contents

					December 31,
					2004				2005
ASSETS
Current assets:
	Cash and cash equivalents				$	73,364,538			$	72,502,906
	Available-for-sale marketable securities					91,075,630				52,225,590
	Accounts receivable					322,546				149,287
	Prepaid expenses and other assets					585,138				346,919
			Total current assets			165,347,852				125,224,702
Property and equipment, net						2,490,804				2,517,859
Other assets						3,448,270				2,973,155
		Total assets			$	171,286,926			$	130,715,716
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	938,498			$	1,268,325
	Accrued expenses					4,218,834				4,310,003
	Contract advances					6,150,013				6,112,549
	Loan payable to strategic partner					15,000,000				—
	Deferred revenue					2,387,882				435,861
			Total current liabilities			28,695,227				12,126,738
Deferred revenue						1,209,725				755,647
Convertible debt						100,000,000				100,000,000
Commitments and Contingencies						—				—
Stockholders’ equity:
	Preferred Stock, $0.01 par value, 1,000,000 shares authorized; no shares issued					—				—
	Common Stock, $0.01 par value, 40,000,000 shares authorized; 23,284,810 and 23,190,154 shares issued and outstanding at December 31, 2005 and 2004, respectively					231,900				232,848
	Additional paid-in-capital					196,730,731				197,311,313
	Accumulated deficit					(155,333,774	)			(179,644,632	)
	Accumulated other comprehensive loss					(246,883	)			(66,198	)
			Total stockholders’ equity			41,381,974				17,833,331
		Total liabilities and stockholders’ equity			$	171,286,926			$	130,715,716

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				Year Ended December 31,
				2003				2004				2005
Revenues:
	Product development revenue			$	9,534,335			$	7,594,280			$	4,195,530
	Royalty revenue				2,397,393				626,685				2,333,384
	License fee revenue				1,593,284				4,037,636				660,747
Total revenues					13,525,012				12,258,601				7,189,661
Operating expenses:
	Research and development				28,023,522				21,873,991				20,775,771
	General and administrative				6,584,318				10,495,377				10,244,271
	Restructuring costs				—				—				971,828
Total operating expenses					34,607,840				32,369,368				31,991,870
Operating loss					(21,082,828	)			(20,110,767	)			(24,802,209	)
Interest income					663,519				1,958,152				4,146,532
Interest expense					(295,168	)			(2,128,738	)			(3,613,190	)
Loss before provision for income taxes					(20,714,477	)			(20,281,353	)			(24,268,867	)
Provision for income taxes					80,075				99,905				41,991
		Net loss		$	(20,794,552	)		$	(20,381,258	)		$	(24,310,858	)
Weighted average shares:
	Basic and diluted				19,055,698				22,888,673				23,258,187
Net loss per share, basic and diluted				$	(1.09	)		$	(0.89	)		$	(1.05	)

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																		Accumulated				Total
		Common Stock																Other				Stockholders’
										Additional				Accumulated				Comprehensive				(Deficit)
		Shares				Amount				Paid-In Capital				Deficit				Income/(loss)				Equity
Balance at December 31, 2002			17,074,034			$	170,740			$	119,712,094			$	(114,157,964	)		$	161,645			$	5,886,515
Issuance of common stock upon exercise of options			573,737				5,738				3,488,632												3,494,370
Issuance of common stock under employee stock purchase plan			25,871				259				207,838												208,097
Issuance of common stock			4,645,000				46,450				65,443,384												65,489,834
Net loss															(20,794,552	)							(20,794,552	)
Available-for-sale marketable securities unrealized loss																			(127,692	)			(127,692	)
Comprehensive loss																							(20,922,244	)
Balance at December 31, 2003			22,318,642			$	223,187			$	188,851,948			$	(134,952,516	)		$	33,953			$	54,156,572
Issuance of common stock upon exercise of options			723,554				7,234				5,211,805												5,219,039
Issuance of common stock under employee stock purchase plan			15,958				159				231,950												232,109
Issuance of common stock			132,000				1,320				2,337,720												2,339,040
Compensatory stock option expense											97,308												97,308
Net loss															(20,381,258	)							(20,381,258	)
Available-for-sale marketable securities unrealized loss																			(280,836	)			(280,836	)
Comprehensive loss																							(20,662,094	)
Balance at December 31, 2004			23,190,154			$	231,900			$	196,730,731			$	(155,333,774	)		$	(246,883	)		$	41,381,974
Issuance of common stock upon exercise of options			75,498				756				473,359												474,115
Issuance of common stock under employee stock purchase plan			19,158				192				103,804												103,996
Compensatory stock option expense											3,419												3,419
Net loss															(24,310,858	)							(24,310,858	)
Available-for-sale marketable securities unrealized gain																			180,685				180,685
Comprehensive loss																							(24,130,173	)
Balance at December 31, 2005			23,284,810			$	232,848			$	197,311,313			$	(179,644,632	)		$	(66,198	)		$	17,833,331

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				Year Ended December 31,
				2003				2004				2005
Operating activities:
	Net loss			$	(20,794,552	)		$	(20,381,258	)		$	(24,310,858	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization				638,282				1,000,101				1,188,610
	Stock compensation expense				—				97,308				3,419
	Amortization of deferred financing costs				—				260,188				475,115
Changes in operating assets and liabilities:
	Accounts receivable				129,060				(276,474	)			173,259
	Prepaid expenses and other current assets				122,520				(191,459	)			238,219
	Other assets				(4,313	)			4,943				—
	Accounts payable				43,804				(999,867	)			329,827
	Accrued expenses				1,454,932				(1,300,985	)			91,169
	Accrued reacquisition costs				(2,400,000	)			—				—
	Contract advances				40,636				2,977,306				(37,464	)
	Deferred revenue				(3,189,929	)			(3,650,620	)			(2,406,099	)
		Net cash used in operating activities			(23,959,560	)			(22,460,817	)			(24,254,803	)
Investing activities:
	Purchases of marketable securities				(43,344,575	)			(93,663,936	)			(88,618,059	)
	Sale or redemption of marketable securities				23,488,773				45,607,145				127,648,784
	Purchases of fixed assets				(758,826	)			(2,077,559	)			(1,215,665	)
		Net cash provided by (used in) investing activities			(20,614,628	)			(50,134,350	)			37,815,060
Financing activities:
	Net proceeds from issuance of convertible debt				—				96,350,000				—
	Proceeds from loan payable from strategic partner				15,000,000				52,500,000				45,000,000
	Repayment of loan payable to strategic partner				(7,500,000	)			(45,000,000	)			(60,000,000	)
	Proceeds from stock options				3,494,370				5,219,039				474,115
	Proceeds from Employee Stock Purchase Plan				208,097				232,109				103,996
	Proceeds from sale of common stock				65,489,834				—				—
		Net cash provided by (used in) financing activities			76,692,301				109,301,148				(14,421,889	)
Net increase (decrease) in cash and cash equivalents					32,118,113				36,705,981				(861,632	)
Cash and cash equivalents at beginning of period					4,540,444				36,658,557				73,364,538
Cash and cash equivalents at end of period				$	36,658,557			$	73,364,538			$	72,502,906
Supplemental cash flow information:
	Cash paid for interest			$	329,982			$	1,747,236			$	3,145,883
	Cash paid for taxes			$	99,655			$	107,889			$	41,991
Supplemental disclosure of noncash financing and investing activities:
	Issuance of common stock in connection with Intellectual Property Agreement			$	—			$	2,339,040			$	—

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1.	Business

2.	Significant Accounting Policies

	Cash Equivalents

	Marketable Securities

	Fair Value of Financial Instruments

F-7

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	Concentrations of Credit Risk

	Property and Equipment

	Long-Lived Assets

	Income Taxes

	Segment Information

F-8

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	Revenue

	Product development revenue

	•	The Company calculates its development costs directly related to Vasovist.
	•	The Company obtains cost reports, or an estimate of costs, from Schering AG for costs incurred by Schering AG related to the development of Vasovist during the same period. Where estimates are used, the Company reviews the estimates and records adjustments in the subsequent quarter when the Company receives actual results from Schering AG. To date, there have been no material adjustments.
	•	The Company multiplies its and Schering AG’s development costs by approximately 50% based on the contractual allocation of work contemplated under the agreement.
	•	The Company then records the net difference as development revenue if the balance results in a payment to the Company and negative revenue if the balance results in a payment to Schering AG.

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	Royalty revenue

F-10

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	License fee revenue

	Reclassification

	Use of Estimates

F-11

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	Research and Development Expenses

	Loss Per Share

		2003				2004				2005
Stock options and awards			3,557,499				3,560,478				3,271,909
Shares issuable on conversion of 3% Convertible Senior Notes			—				3,359,090				3,359,090
			3,557,499				6,919,568				6,630,999

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	Comprehensive Income (Loss)

	Employee Stock Compensation

			Year Ended December 31,
			2003				2004				2005
Net loss — as reported			$	(20,794,552	)		$	(20,381,258	)		$	(24,310,858	)
	Less: employee stock-based compensation included in net loss as reported			—				97,308				—
	Add: pro forma adjustment for stock-based compensation			(4,040,572	)			(6,047,438	)			(4,141,790	)
Net loss — pro forma			$	(24,835,124	)		$	(26,331,388	)		$	(28,452,648	)
Net loss per share, basic and diluted
	As reported		$	(1.09	)		$	(0.89	)		$	(1.05	)
	Pro forma			(1.30	)			(1.15	)			(1.22	)
	Effect of pro form adjustment		$	(0.21	)		$	(0.26	)		$	(0.18	)

		Options												ESPP
		Year Ended December 31,
		2003				2004				2005				2003				2004				2005
Expected life of option (years)			6.6				7.3				6.9				0.5				0.5				0.5
Expected stock price volatility			0.87				0.85				0.83				0.86				0.84				0.82
Weighted average risk-free interest rate			3.27	%			3.25	%			3.77	%			1.12	%			1.40	%			3.51	%

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	Recent Accounting Pronouncements

F-14

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3.	Marketable Securities

		2004								2005
		Fair Value				Cost				Fair Value				Cost
Government-sponsored agency securities		$	38,237,366			$	38,364,954			$	19,559,610			$	19,584,572
Corporate bonds			38,506,427				38,625,721				25,112,035				25,153,272
Commercial paper			3,991,800				3,991,800				3,980,788				3,980,787
Certificates of deposit			10,340,037				10,340,037				3,573,157				3,573,157
		$	91,075,630			$	91,322,512			$	52,225,590			$	52,291,788

		December 31,
		2004				2005
Due within one year		$	47,193,349			$	48,447,012
Due after one year through two years			43,882,281				3,778,578
		$	91,075,630			$	52,225,590

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4.	Property and Equipment

		December 31,
		2004				2005
Leasehold improvements		$	3,607,588			$	3,880,443
Laboratory equipment			3,568,169				2,669,880
Furniture, fixtures and other equipment			1,716,801				1,052,703
			8,892,558				7,603,026
Less accumulated depreciation and amortization			(6,401,754	)			(5,085,167	)
		$	2,490,804			$	2,517,859

5.	Accrued Expenses

		December 31,
		2004				2005
Accrued contractual product development expenses		$	2,330,849			$	1,680,790
Accrued compensation			969,925				1,768,330
Other accrued expenses			918,060				860,883
		$	4,218,834			$	4,310,003

6.	Restructuring Charges

7.	Financing Arrangements

	Loan Payable to Strategic Partner

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	Convertible Debt

8.	Leases

2006		$	1,303,059
2007			1,319,753
2008			5,184
Total minimum lease payments		$	2,627,996

9.	Stockholders’ Equity

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	Equity Plans

	Equity Incentive Plan

																		Options Exercisable
										Weighted												Weighted
		Options				Option Price				Average				Available								Average
		Outstanding				Range per Share				Exercise Price				for Grant				Number				Exercise Price
December 31, 2002			3,671,734			$	0.42 - $21.63			$	8.64				580,711				1,450,742			$	7.65
Granted			643,588			$	6.36 - $19.87			$	8.18
Exercised			(573,737	)		$	0.42 - $15.38			$	6.09
Cancelled			(339,086	)		$	5.13 - $19.40			$	9.49
December 31, 2003			3,402,499			$	0.45 - $21.63			$	8.90				776,209				1,365,079			$	8.76
Granted			944,430			$	15.50 - $25.37			$	20.02
Exercised			(723,554	)		$	0.45 - $16.50			$	7.21
Cancelled			(302,897	)		$	5.13 - $21.54			$	10.94
December 31, 2004			3,320,478			$	0.83 - $25.37			$	12.25				634,676				1,273,690			$	9.76
Granted			594,255			$	6.35 - $17.39			$	7.30
Exercised			(75,498	)		$	0.83 - $ 9.13			$	6.28
Cancelled			(830,660	)		$	5.13 - $25.37			$	12.74
December 31, 2005			3,008,575			$	4.48 - $24.72			$	11.29				1,371,081				1,634,890			$	10.86

	1996 Director Stock Option Plan

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																		Options Exercisable
										Weighted												Weighted
		Options				Option Price				Average				Available								Average
		Outstanding				Range per Share				Exercise Price				for Grant				Number				Exercise Price
December 31, 2002			120,000			$	7.00 - $13.25			$	9.54				74,688				61,668			$	10.03
Granted			35,000			$	11.64			$	11.64
December 31, 2003			155,000			$	7.00 - $13.25			$	10.01				139,668				86,668			$	9.74
Granted			85,000			$	18.92 - $24.95			$	22.05
December 31, 2004			240,000			$	7.00 - $24.95			$	14.28				54,668				130,001			$	9.87
Granted			45,000			$	7.77			$	7.77
Cancelled			(21,666	)		$	7.77 - $24.95			$	20.99
December 31, 2005			263,334			$	7.00 - $24.95			$	12.61				131,334				181,669			$	12.36

	Combined Option Information

		Outstanding												Exercisable
		Options				Weighted								Options
		Outstanding at				Average				Weighted				Exercisable at				Weighted
		December 31,				Remaining				Average				December 31,				Average
Range of Exercise Prices		2005				Contractual Life				Exercise Price				2005				Exercise Price
$ 4.48 - $ 7.10			704,974				6.13			$	6.26				383,419			$	6.08
$ 7.13 - $ 8.75			833,765				6.68			$	7.84				343,630			$	8.48
$ 8.78 - $13.75			873,427				4.81			$	11.17				740,918			$	11.27
$13.85 - $24.95			859,743				7.68			$	19.28				348,592			$	18.37
			3,271,909							$	11.39				1,816,559			$	11.01

	1996 Employee Stock Purchase Plan

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10.	Income Taxes

		December 31,
		2004				2005
Deferred tax assets:
Net operating loss carry forwards		$	59,256,000			$	68,646,000
Research and development tax credits			7,406,000				8,381,000
Book over tax depreciation and amortization			2,272,000				2,582,000
Deferred revenue			1,394,000				451,000
Other			198,000				208,000
Total deferred tax assets		$	70,526,000			$	80,268,000
Valuation allowance			(70,526,000	)			(80,268,000	)
Deferred income taxes, net		$	0			$	0

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		Years Ended December 31,												Years Ended December 31,
		2003				2004				2005				2003				2004				2005
Tax at U.S. statutory rate		$	(7,043,000	)		$	(6,896,000	)		$	(8,251,000	)			(33.87	)%			(33.84	)%			(33.94	)%
State taxes, net of federal benefit			—				—				—				0.00	%			0.00	%			0.00	%
Permanent differences, net of federal benefit			26,894				21,629				19,021				0.13	%			0.11	%			0.08	%
Foreign taxes			80,075				99,905				41,991				0.39	%			0.49	%			0.17	%
Operating losses not benefited			7,016,106				6,874,371				8,231,979				33.74	%			33.73	%			33.86	%
Income tax expense		$	80,075			$	99,905			$	41,991				0.39	%			0.49	%			0.17	%

11.	Defined Contribution Plan

12.	Strategic Alliances and Collaborations

	Schering AG

F-21

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F-22

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	Tyco/ Mallinckrodt

	Daiichi

F-23

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	MGH

	Prince

13.	Subsequent Events

	Dismissal of class action lawsuit

F-24

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Table of Contents

			First Quarter				Second Quarter				Third Quarter				Fourth Quarter
			Ended				Ended				Ended				Ended
			March 31,				June 30,				September 30,				December 31,				Total
			2004				2004				2004				2004				Year
Revenues:
	Product development revenue		$	2,651,925			$	1,962,067			$	2,273,957			$	706,331			$	7,594,280
	Royalty revenue			688,453				1,009,062				700,601				(1,771,431	)(1)			626,685
	License fee revenue			283,288				275,175				263,585				3,215,588				4,037,636
Total revenues				3,623,666				3,246,304				3,238,143				2,150,488				12,258,601
Operating expenses:
Research Development				5,513,267				5,073,265				6,508,418				4,779,041				21,873,991
General & administrative				2,171,976				3,119,630				2,878,916				2,324,855				10,495,377
Total operating expenses				7,685,243				8,192,895				9,387,334				7,103,896				32,369,368
Operating Loss				(4,061,577	)			(4,946,591	)			(6,149,191	)			(4,953,408	)			(20,110,767	)
Other income, net				203,017				8,576				(246,645	)			(135,534	)			(170,586	)
Income taxes				8,719				20,947				16,676				53,563				99,905
Net loss			$	(3,867,279	)		$	(4,958,962	)		$	(6,412,512	)		$	(5,142,505	)		$	(20,381,258	)
Weighted average shares, basic and diluted				22,622,249				22,818,822				22,987,878				23,122,088				22,888,673
Net loss per share:
Basic and diluted			$	(0.17	)		$	(0.22	)		$	(0.28	)		$	(0.22	)		$	(0.89	)

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			First Quarter				Second Quarter				Third Quarter				Fourth Quarter
			Ended				Ended				Ended				Ended
			March 31,				June 30,				September 30,				December 31,				Total
			2005				2005				2005				2005				Year
Revenues:
	Product development revenue		$	1,475,819			$	314,026			$	1,297,720			$	1,107,965			$	4,195,530
	Royalty revenue			444,289				578,321				798,484				512,290				2,333,384
	License fee revenue			165,896				165,896				165,894				163,061				660,747
Total revenues				2,086,004				1,058,243				2,262,098				1,783,316				7,189,661
Operating expenses:
Research Development				5,533,151				5,637,426				5,498,385				4,106,809				20,775,771
General & administrative				2,743,705				2,570,535				2,617,410				2,312,621				10,244,271
Restructuring costs				—				—				—				971,828				971,828
Total operating expenses				8,276,856				8,207,961				8,115,795				7,391,258				31,991,870
Operating Loss				(6,190,852	)			(7,149,718	)			(5,853,697	)			(5,607,942	)			(24,802,209	)
Other income, net				(64,703	)			53,634				193,940				350,471				533,342
Income taxes				—				—				—				41,991				41,991
Net loss			$	(6,255,555	)		$	(7,096,084	)		$	(5,659,757	)		$	(5,299,462	)		$	(24,310,858	)
Weighted average shares, basic and diluted				23,226,677				23,257,197				23,273,075				23,275,104				23,258,187
Net loss per share:
Basic and diluted			$	(0.27	)		$	(0.31	)		$	(0.24	)		$	(0.23	)		$	(1.05	)

(1)

Reflects the Company’s decision to recognize the full $1.8 million of Bracco’s assertion that Bracco had overstated non-U.S.  royalties to the Company during the period 2001 to 2004. In addition, the Company believes that it no longer has a reasonable basis to make royalty estimates and will therefore, effective in the fourth quarter of 2004, recognize future royalties from Bracco in the period in which royalty reports are received.

F-26

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Table of Contents

					December 31,				March 31,
					2005				2006
ASSETS
Current assets:
	Cash and cash equivalents				$	72,502,906			$	75,963,558
	Available-for-sale marketable securities					52,225,590				42,882,538
	Accounts receivable					149,287				94,699
	Prepaid expenses and other assets					346,919				479,906
			Total current assets			125,224,702				119,420,701
Property and equipment, net						2,517,859				2,107,960
Other assets						2,973,155				3,492,867
		Total assets			$	130,715,716			$	125,021,528
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	1,268,325			$	541,148
	Accrued expenses					4,310,003				3,894,527
	Contract advances					6,112,549				5,425,318
	Deferred revenue					435,861				330,598
			Total current liabilities			12,126,738				10,191,591
Deferred revenue						755,647				699,314
Convertible debt						100,000,000				100,000,000
Commitments and Contingencies						—				—
Stockholders’ equity:
	Preferred Stock, $0.01 par value, 1,000,000 shares authorized; no shares issued					—				—
	Common Stock, $0.01 par value, 40,000,000 shares authorized; 23,284,810 shares issued and outstanding at March 31, 2006 and December 31, 2005					232,848				232,848
	Additional paid-in-capital					197,311,313				198,104,068
	Accumulated deficit					(179,644,632	)			(184,171,953	)
	Accumulated other comprehensive loss					(66,198	)			(34,340	)
			Total stockholders’ equity			17,833,331				14,130,623
		Total liabilities and stockholders’ equity			$	130,715,716			$	125,021,528

F-27

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Table of Contents

			Three Months Ended March 31,
			2005				2006
Revenues:
	Product development revenue		$	1,475,819			$	1,082,867
	Royalty revenue			444,289				457,778
	License fee revenue			165,896				161,597
Total revenues				2,086,004				1,702,242
Operating expenses:
	Research and development			5,533,151				3,992,961
	General and administrative			2,743,705				2,338,363
	Restructuring costs			—				289,633
Total operating expenses				8,276,856				6,620,957
Operating loss				(6,190,852	)			(4,918,715	)
Interest income				845,901				1,304,573
Interest expense				(910,604	)			(869,363	)
Loss before provision for income taxes				(6,255,555	)			(4,483,505	)
Provision for income taxes				—				43,816
	Net loss		$	(6,255,555	)		$	(4,527,321	)
Weighted average shares:
	Basic and diluted			23,226,677				23,284,810
Net loss per share, basic and diluted			$	(0.27	)		$	(0.19	)

F-28

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Table of Contents

				Three Months Ended March 31,
				2005				2006
Operating activities:
	Net loss			$	(6,255,555	)		$	(4,527,321	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization				264,033				409,899
	Stock compensation expense				3,419				792,755
	Amortization of deferred financing costs				114,861				119,109
Changes in operating assets and liabilities:
	Accounts receivable				(341,637	)			54,588
	Prepaid expenses and other current assets				(131,053	)			(132,987	)
	Accounts payable				83,261				(727,177	)
	Accrued expenses				891,834				(415,476	)
	Contract advances				(150,341	)			(687,231	)
	Deferred revenue				(602,474	)			(161,596	)
		Net cash used in operating activities			(6,123,652	)			(5,275,437	)
Investing activities:
	Purchases of marketable securities				(17,466,958	)			(22,788,633	)
	Sale or redemption of marketable securities				19,393,321				32,163,543
	Increase in other assets				—				(638,821	)
	Purchases of fixed assets				(157,888	)			—
		Net cash provided by investing activities			1,768,475				8,736,089
Financing activities:
	Proceeds from loan payable from strategic partner				15,000,000				—
	Repayment of loan payable to strategic partner				(15,000,000	)			—
	Proceeds from exercises of stock options				437,392				—
		Net cash provided by financing activities			437,392				—
Net increase (decrease) in cash and cash equivalents					(3,917,785	)			3,460,652
Cash and cash equivalents at beginning of period					73,364,538				72,502,906
Cash and cash equivalents at end of period				$	69,446,753			$	75,963,558
Supplemental cash flow information:
	Cash paid for interest			$	45,326			$	—
	Cash paid for taxes			$	—			$	43,816

F-29

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Table of Contents

1.	Nature of Business

2.	Basis of Presentation

F-30

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Table of Contents

3.	Significant Accounting Policies

	Revenue Recognition

	Product development revenue

	•	The Company calculates its development costs directly related to Vasovist.
	•	The Company obtains cost reports, or an estimate of costs, from Schering AG for costs incurred by Schering AG related to the development of Vasovist during the same period. Where estimates are used, the Company reviews the estimates and records adjustments in the subsequent quarter when the Company receives actual results from Schering AG. To date, there have been no material adjustments.
	•	The Company multiplies its and Schering AG’s development costs by approximately 50% based on the contractual allocation of work contemplated under the agreement.
	•	The Company then records the net difference as development revenue if the balance results in a payment to the Company and negative revenue if the balance results in a payment to Schering AG.

F-31

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Table of Contents

	Royalty revenue

	License fee revenue

F-32

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Table of Contents

	Research and Development Expenses

	Loss Per Share

F-33

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Table of Contents

			2005				2006
Stock options and awards				3,774,473				2,486,616
Shares issuable on conversion of 3% Convertible Senior Notes				3,359,090				3,359,090
	Total			7,133,563				5,845,706

	Comprehensive Loss

	Employee Stock Compensation

F-34

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Table of Contents

			Three Months Ended
			March 31, 2005
Net loss — as reported			$	(6,255,555	)
	Add: employee stock-based compensation included in net loss as reported			—
	Deduct: pro forma adjustment for stock-based compensation			(1,087,809	)
Net loss — pro forma			$	(7,343,364	)
Net loss per share, basic and diluted
	As reported		$	(0.27	)
	Pro forma			(0.32	)
	Effect of pro forma adjustment		$	(0.05	)

		Options
		Three Months
		Ended
		March 31,
		2005				2006
Expected stock price volatility			84	%			70	%
Weighted average risk-free interest rate			3.62	%			4.62	%
Expected forfeiture rate			0.00	%			9.00	%
Expected life of option (years)			7.0				6.3

F-35

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Table of Contents

											Weighted-
							Weighted-				Average
			Number				Average				Remaining				Aggregate
			of Stock				Exercise				Contractual				Intrinsic
			Options				Price				Term				Value
Outstanding at December 31, 2005				3,271,909			$	11.39
	Granted			300,562				4.59
	Exercised			—				—
	Cancelled			(1,085,855	)			11.55
Outstanding at March 31, 2006				2,486,616			$	10.50				6.86			$	16,745
Exercisable at March 31, 2006				1,299,973			$	10.81				5.24			$	400

4.	Restructuring Charges

Balance December 31, 2005			$	971,828
	Restructuring charges for the three months ended March 31, 2006			289,633
	Write-offs			(154,502	)
	Employee related payments			(835,028	)
Balance March 31, 2006			$	271,931

5.	Deferred Merger Costs

6.	Convertible Debt

F-36

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Table of Contents

7.	Subsequent Events

8.	Recent Accounting Pronouncements

F-37

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Table of Contents

	/s/ Ernst & Young LLP

F-38

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Table of Contents

			December 31								March 31
			2004				2005				2006
											(Unaudited)
			(In thousands,
			except per share amounts)
ASSETS
Current assets:
	Cash and cash equivalents		$	13,813			$	5,912			$	7,939
	Marketable securities			—				1,501				—
	Prepaid expenses and other current assets			1,037				2,016				2,196
Total current assets				14,850				9,429				10,135
Restricted cash				714				931				934
Property and equipment, net				1,075				1,399				1,368
Other assets				78				40				39
Total assets			$	16,717			$	11,799			$	12,476
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
	Accounts payable		$	1,072			$	2,477			$	3,456
	Accrued expenses			1,538				4,637				4,019
	Current portion of deferred revenue			—				760				1,303
	Current portion of capital lease obligations			223				89				61
	Current portion of lease abandonment liability			219				152				180
	Notes payable			—				—				6,602
Total current liabilities				3,052				8,115				15,621
Accrued rent				—				440				483
Deferred revenue, net of current portion				—				778				611
Capital lease obligations, net of current portion				127				109				100
Lease abandonment liability, net of current portion				1,068				1,109				1,056
Total liabilities				4,247				10,551				17,871
Stockholders’ equity (deficit):
	Preferred stock, $0.01 par value; 238,223,800, 275,298,740 and 275,298,740 shares authorized at December 31, 2004, 2005 and March 31, 2006, respectively: 115,838,473, 273,203,492 and 273,203,492 shares issued and outstanding at December 31, 2004, 2005 and March 31, 2006, respectively			1,159				2,732				2,732
	Common stock, $0.01 par value; 309,642,245, 338,085,813 and 338,085,813 shares authorized at December 31, 2004 and 2005 and March 31, 2006, respectively: 662,590, 1,044,059 and 1,044,059 shares issued and outstanding at December 31, 2004 and 2005 and March 31, 2006, respectively			7				10				10
	Additional paid-in capital			98,999				122,200				120,983
	Deferred compensation			—				(2,294	)			—
	Accumulated other comprehensive income			1				(1	)			—
	Accumulated deficit			(87,696	)			(121,399	)			(129,120	)
Total stockholders’ equity (deficit)				12,470				1,248				(5,395	)
Total liabilities and stockholders’ equity (deficit)			$	16,717			$	11,799			$	12,476

F-39

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Table of Contents

															Three Months Ended
			Years Ended December 31												March 31
			2003				2004				2005				2005				2006
															(Unaudited)
			(In thousands, except per share amounts)
Revenues:
	Product development revenue		$	—			$	—			$	1,737			$	73			$	597
	License fee revenue			1,068				13				563				80				187
Total Revenue				1,068				13				2,300				153				784
Costs and expenses:
Research and development				14,632				16,427				29,351				6,750				7,036
General and administrative				5,782				3,011				7,031				942				1,475
Restructuring				5,350				77				205				21				30
Total costs and expenses				25,764				19,515				36,587				7,713				8,541
Loss from operations				(24,696	)			(19,502	)			(34,287	)			(7,560	)			(7,757	)
Other income (expense):
	Investment income, net			142				147				614				152				42
	Interest expense			(6	)			(37	)			(30	)			(9	)			(6	)
Net loss			$	(24,560	)		$	(19,392	)		$	(33,703	)		$	(7,417	)		$	(7,721	)

F-40

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Table of Contents

																										Class A																								Accumulated								Total
		Preferred Stock								Common Stock								New								Common Stock												Additional												Other								Stockholders’
																		Common Stock																Deferred				Paid-in				Notes				Treasury				Comprehensive				Accumulated				Equity
		Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Compensation				Capital				Receivable				Stock				Loss				Deficit				(Deficit)
		(In thousands, except share amounts)
Balance at December 31, 2002			19,111,135			$	59,167				—			$	—				15,757			$	—				—			$	—			$	—			$	23,473			$	(676	)		$	(40	)		$	30			$	(55,814	)		$	26,140
Net loss																																																							(24,560	)			(24,560	)
Realized gains, net																																																			(30	)							(30	)
Unrealized gain on marketable securities
Total comprehensive loss																																																											(24,590	)
Repurchase of restricted stock																			(3,678	)			—																(12	)			676																664
Cancellation of treasury stock																			(771	)			—																(41	)							40												(1	)
Cancellation of stock on acquisition			(19,111,135	)			(59,167	)											(11,308	)			—																59,167																				—
Reversal of Series D accretion																																							(12,070	)															12,070				—
Issuance of Preferred Stock on acquisition			2,532,225				26																																																				26
Issuance of Common Stock on acquisition																			14,731				—																7,643																				7,643
Issuance of Common Stock A on acquisition																											7,343												2																				2
Employee stock purchases																											12,493												22																				22
Balance at December 31, 2003			2,532,225				26				—				—				14,731				—				19,836				—				—				78,184				—				—				—				(68,304	)			9,906
Net loss																																																							(19,392	)			(19,392	)
Realized gains, net unrealized loss on marketable securities																																																			1								1
Total comprehensive loss																																																											(19,391	)
Write off of receivable																																							3																				3
Issuance of Preferred Stock			96,249,667				963																																20,093																				21,056
Conversion of Preferred Stock			11,999,235				119				599,447				7																								(127	)																			(1	)
Conversion of Common Stock											34,566				—				(14,731	)			—				(19,836	)											(1	)																			(1	)
Exercise of stock warrants			5,057,346				51																																823																				874
Employee stock purchases											28,577				—																								24																				24
Balance at December 31, 2004			115,838,473				1,159				662,590				7				—				—				—				—				—				98,999				—				—				1				(87,696	)			12,470
Net loss																																																							(33,703	)			(33,703	)
Realized gains, net unrealized loss on marketable securities																																																			(2	)							(2	)
Total comprehensive loss																																																											(33,705	)
Issuance of Preferred Stock			94,460,059				944																																16,594																				17,538
Exercise of stock warrants			62,904,960				629																																3,466																				4,095
Employee stock purchases											381,469				3																								319																				322
Issuance of stock options																																			(2,822	)			2,822																				—
Compensation expense related to stock options																																			528																								528
Balance at December 31, 2005			273,203,492				2,732				1,044,059				10				—				—				—				—				(2,294	)			122,200				—				—				(1	)			(121,399	)			1,248
Net loss																																																							(7,721	)			(7,721	)
Realized gains, net unrealized loss on marketable securities																																																			1								1
Total comprehensive loss																																																											(7,720	)
Compensation expense related to stock options and warrants																																							369																				369
Issuance of stock warrants																																							708																				708
Reversal of deferred compensation																																			2,294				(2,294	)
Balance at March 31, 2006 (unaudited)			273,203,492				2,732				1,044,059				10				—				—				—				—				—				120,983				—				—				—				(129,120	)			(5,395	)

F-41

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Table of Contents

																Three Months Ended
				Years Ended December 31												March 31,
				2003				2004				2005				2005				2006
				(In thousands)												(Unaudited)
Operating activities
Net loss				$	(24,560	)		$	(19,392	)		$	(33,703	)		$	(7,417	)		$	(7,721	)
Adjustments to reconcile net loss to cash used in operating activities:
	Write-off of property and equipment				2,169				27				—				—				—
	Write-off of research and development				6,611				—				—				—				—
	Depreciation and amortization				1,364				349				433				63				77
	Loss on sale of property and equipment				—				1				14				—				—
	Accretion of lease liability net present value				—				—				205				50				30
	Write-off of stock subscription receivable				—				3				—				—				—
	Non-cash stock based compensation				664				—				552				25				369
	Realized gain on sale of short-term investments				(30	)			(1	)			—				—				—
	Changes in operating assets and liabilities exclusive of impact from net asset acquisition (Note 6):
		Prepaid expenses and other current assets			409				(620	)			(979	)			(741	)			531
		Other assets			1,123				(46	)			43				(7	)			1
		Accounts payable, accrued expenses and deferred revenue			544				1,033				5,268				2,981				929
		Long-term liabilities			1,202				(264	)			984				20				(206	)
Net cash used in operating activities					(10,504	)			(18,910	)			(27,183	)			(5,026	)			(5,990	)
Investing activities
Net asset acquisition, net of cash acquired					(318	)			—				—				—				—
Purchase of short-term investments					(3,657	)			—				(3,494	)			—				—
Restricted cash					(952	)			238				(217	)			(190	)			(3	)
Proceeds from sale of short-term investments					13,892				3,658				1,989				—				1,500
Purchase of property and equipment					(144	)			(278	)			(705	)			(192	)			(46	)
Net cash (used in) provided by investing activities					8,821				3,618				(2,427	)			(382	)			1,451
Financing activities
Issuance of stock for net asset acquisition					1,058				—				—				—				—
Proceeds from issuance of common stock for option exercises					22				23				324				16				—
Proceeds from issuance of convertible notes					—				—				—				21,077				6,602
Proceeds from issuance of preferred stock and exercises of warrants, net of issuance costs					—				21,929				21,608				(53	)			—
Principal payments on capital leases					(140	)			(188	)			(223	)							(36	)
Net cash provided by financing activities					940				21,764				21,709				21,040				6,566
Net (decrease) increase in cash and cash equivalents					(743	)			6,472				(7,901	)			15,632				2,027
Cash and cash equivalents, beginning of period					8,084				7,341				13,813				13,813				5,912
Cash and cash equivalents, end of period				$	7,341			$	13,813			$	5,912			$	29,445			$	7,939
Supplemental Cash Flow Information
Cash paid for interest				$	28			$	37			$	29			$	9			$	6

F-42

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Table of Contents

1.	The Company

F-43

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Table of Contents

2.	Summary of Significant Accounting Policies

	Basis of presentation

	Reverse stock split

	Use of estimates

	Cash equivalents and marketable securities

F-44

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Table of Contents

	Concentrations of credit risk

	Segment Information

	Property and Equipment

Laboratory equipment		5 years
Computer equipment and software		3 years
Leasehold improvements		Shorter of life of lease or useful life of asset
Furniture and fixtures		7 years

F-45

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Table of Contents

	Impairment of Long-Lived Assets

	Revenue Recognition

	•	Ratably over the development period; or
	•	Based upon the level of research services performed during the period of the research contract.

	Research and Development

F-46

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Table of Contents

	Income taxes

	Foreign currency

	Comprehensive Loss

	Stock-Based Compensation

F-47

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Table of Contents

														Three
														Months
														Ended
		Year Ended December 31,												March 31,
		2003				2004				2005				2005
														(unaudited)
Net loss		$	(24,560	)		$	(19,392	)		$	(33,703	)		$	(7,417	)
Add: stock-based employee compensation as reported in the statement of operations			664				—				527				25
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards			(82	)			(427	)			(1,331	)			(55	)
Pro forma net loss		$	(23,978	)		$	(19,819	)		$	(34,507	)		$	(7,447	)

F-48

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		2003				2004				2005
Expected life (years)			5.58				3.84				4.44
Interest rate			3.6%				3.2%				3.9%
Volatility			80%				80%				80%

		March 31, 2005
Expected life (years)			4.49
Risk-free interest rate			3.65
Volatility			80%

3.	Restricted cash

4.	Property and equipment

		December 31,
										March 31,
		2004				2005				2006
										(unaudited)
Laboratory equipment		$	780			$	854			$	723
Computer equipment and software			926				1,307				1,158
Leasehold improvements			164				159				321
Furniture and fixtures			248				452				635
			2,118				2,772				2,837
Less accumulated depreciation and amortization			(1,043	)			(1,373	)			(1,469	)
		$	1,075			$	1,399			$	1,368

F-49

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Table of Contents

5.	Accrued expenses

		December 31,
										March 31,
		2004				2005				2006
										(unaudited)
Payroll and benefits		$	112			$	200			$	163
Vacation			195				219				261
Accrued purchases			318				474				305
Clinical trial costs			913				3,744				3,290
		$	1,538			$	4,637			$	4,019

6.	Net asset acquisition

7.	Restructuring

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																															Unaudited
			Balance at												Balance at												Balance at												Balance at
			December 31,				2004								December 31,				2005								December 31,				2006								March 31,
			2003				Payments				Other				2004				Payments				Other				2005				Payments				Other				2006
Princeton, NJ Lease			$	1,503			$	(294	)		$	78			$	1,287			$	(268	)		$	242			$	1,261			$	(55	)		$	30			$	1,236
	Total		$	1,503			$	(294	)		$	78			$	1,287			$	(268	)		$	242			$	1,261			$	(55	)		$	30			$	1,236

8.	Commitments

	Lease agreements

		Capital				Operating
		Leases				Leases
2006		$	105			$	1,398
2007			51				1,497
2008			38				1,602
2009			32				1,602
2010			7				1,627
Thereafter			—				1,707
Total minimum lease payments			233				9,433
Less aggregate future sublease income			—				(3,068	)
			233			$	6,365
Less amount representing interest			(35	)
Present value of minimum lease payments			198
Less current portion of capital lease obligation			(89	)
Capital lease obligations, net of current portion		$	109

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9.	Notes payable

10.	Discovery alliance

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11.	Stockholders Equity

	•	An aggregate of 480,552 shares of a newly created Series A convertible preferred stock and an aggregate of 1,291,991 shares of a newly created Series B convertible preferred stock to its existing stockholders in exchange for an aggregate of 2,187,250 shares of its then outstanding Series A convertible preferred stock, an aggregate of 6,060,606 shares of its then outstanding Series B convertible preferred stock, an aggregate of 2,568,371 shares of its then outstanding Series C convertible preferred stock and an aggregate of 10,438,413 shares of its then outstanding Series D convertible preferred stock. Each share of newly created Series A convertible preferred stock and newly created Series B convertible preferred stock was convertible into 0.5556 shares of common stock.
	•	Warrants to all of the Company’s stockholders that entitled the holder to purchase its pro rata share of an aggregate of 1,000,000 shares of its newly created Series B convertible preferred stock.

	•	An aggregate of 66,753,820 shares of its Series C convertible preferred stock to existing investors at a purchase price of $0.22037 per share for an aggregate purchase price of $14,710,539. Shares of Series C convertible preferred stock are convertible on a 1-for-18 basis into shares of the Company’s common stock.

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	•	An aggregate of 14,531,460 shares of its Series AB convertible preferred stock and warrants to purchase an aggregate of 62,240,212 shares of its Series AB convertible preferred stock to existing stockholders in exchange for an aggregate of 732,347 shares of its newly created Series A convertible preferred stock and an aggregate of 720,799 shares of its newly created Series B convertible preferred stock. Each share of Series AB convertible preferred stock in convertible into one share of the Company’s common stock.
	•	An aggregate of 599,488 shares of common stock to existing stockholders in exchange for an aggregate of 335,623 shares of its newly created Series A convertible preferred stock and an aggregate of 743,456 shares of is newly created Series B convertible preferred stock; and
	•	An aggregate of 20,638 shares of common stock to existing stockholders in exchange for an aggregate of 20,638 shares of the Company’s Class A Common Stock.

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		Shares
						Issued and
Series		Authorized				Outstanding
AB			76,771,672				76,771,672
C			198,527,068				196,431,820
			275,298,740				273,203,492

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		Stock Options
		March 31, 2006				March 31, 2005
Expected life (years)			n/a				4.49
Risk-free interest rate			n/a				3.65
Volatility			67%				80%

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		Shares of
		Common
		Stock				Weighted-Average				Weighted-Average
		Attributable to				Exercise Price of				Remaining				Aggregate
		Options				Options				Contractual Term				Intrinsic Value
										(In years)				(In thousands)
Outstanding at January 1, 2006			2,240,011			$	1.06				8.9			$	5,216
Granted			—				—				—				—
Exercised			—				—				—				—
Forfeited or expired			(77,639	)			1.10				—				(178	)
Outstanding at March 31, 2006			2,162,372				1.06				8.65				5,038
Vested or expected to vest at March 31, 2006			1,023,828				0.95				8.44				2,492
Exercisable at March 31, 2006			1,023,828				0.95				8.44				2,492

		2003								2004								2005
						Weighted-								Weighted-								Weighted-
						Average								Average								Average
						Exercise								Exercise								Exercise
		Shares				Price				Shares				Price				Shares				Price
Outstanding at January 1			101,619			$	9.36				160,994			$	1.80				1,407,396			$	0.96
Granted			181,267				1.80				1,278,025				0.85				1,256,346				1.11
Exercised			(12,492	)			1.80				(28,577	)			0.84				(381,469	)			0.85
Canceled/forfeited			(109,400	)			8.82				(3,046	)			1.80				(42,262	)			1.02
Outstanding at December 31			160,994				1.80				1,407,396				0.96				2,240,011				1.06
Options exercisable at December 31			54,745				1.80				829,726				0.91				877,038				0.95

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		Options Outstanding												Options Exercisable
						Weighted
						Average				Weighted-								Weighted-
						Remaining				Average								Average
Range of Exercise						Contractual				Exercise								Exercise
Prices		Number				Life (Years)				Price				Number				Price
$0.81			1,644,839				8.92			$	0.81				741,233			$	0.81
1.44			381,680				9.41				1.44				29,203				1.44
1.80			183,659				7.55				1.80				106,602				1.80
5.40			29,833				9.76				5.40				—				5.40
			2,240,011												877,038

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						Exercise				Fair
Date		Options				Price				Value
April 2005			257,482			$	0.81			$	5.04
April 2005			229,146				1.44				5.04
May 2005			42,778				0.81				5.94
July-August 2005			149,096				1.44				5.94
August 2005			35,349				1.44				8.10

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		2005
Warrants			13,448
Common stock under the 2003 Plan			2,360,367
Common stock for conversion of Series C preferred stock			10,912,838
Common stock for conversion of Series AB preferred stock			4,265,060
			17,551,713

12.	Significant license agreement

13.	Income taxes

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		December 31,
		2004				2005
Net operating loss carryforwards		$	35,019			$	50,092
Research and development tax credit carry forwards			3,006				4,327
Capitalized research costs			1,969				1,356
Lease abandonment liability			518				508
Depreciation and amortization			1,988				1,928
Other temporary differences			102				119
Valuation allowance			(42,602	)			(58,330	)
		$	—			$	—

14.	Defined contribution benefit plan

15.	Subsequent Events

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“3.12. VOTING REQUIREMENTS. The affirmative vote of the holders of a majority of the voting power of the shares of outstanding capital stock of EPIX present at the EPIX Stockholders’ Meeting is required to approve this Agreement, the Merger and the Issuances of the EPIX Common Stock as a result of the Merger. If an amendment to the Certificate of Incorporation of EPIX is required in order to consummate the Merger, the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of EPIX on the record date fixed for the EPIX Stockholders’ Meeting will be required to approve such amendment. The affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of Merger Sub has approved the Merger.”

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A-2

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	EPIX PHARMACEUTICALS, INC.

	By:	/s/ Andrew C.G. Uprichard

	Name: Andrew C.G. Uprichard

	Title:	President and Chief Operating Officer

	EPIX DELAWARE, INC.

	By:	/s/ Philip T. Chase

	Name: Philip T. Chase

	Title:	Treasurer and Secretary

	PREDIX PHARMACEUTICALS HOLDINGS, INC.

	By:	/s/ Michael G. Kauffman

	Name: Michael G. Kauffman, M.D., Ph.D.

	Title:	President and Chief Executive Officer

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A-4

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					Page
ARTICLE I THE MERGER						A-9
	1.1.		THE MERGER			A-9
	1.2.		EFFECTIVE TIME			A-10
	1.3.		EFFECT OF THE MERGER			A-10
	1.4.		CERTIFICATE OF INCORPORATION; BYLAWS			A-10
	1.5.		DIRECTORS AND OFFICERS			A-10
	1.6.		CONVERSION OF MERGER SUB COMMON STOCK			A-10
	1.7.		EFFECT ON CAPITAL STOCK			A-10
	1.8.		MILESTONE PAYMENT			A-11
	1.9.		EXCHANGE OF CERTIFICATES			A-13
	1.10.		STOCK TRANSFER BOOKS			A-15
	1.11.		NO FURTHER OWNERSHIP RIGHTS IN PREDIX COMMON STOCK AND PREDIX PREFERRED STOCK			A-15
	1.12.		LOST, STOLEN OR DESTROYED CERTIFICATES			A-15
	1.13.		TAX CONSEQUENCES			A-15
	1.14.		APPRAISAL RIGHTS			A-15
	1.15.		TAKING OF NECESSARY ACTION; FURTHER ACTION			A-15
	1.16.		MATERIAL ADVERSE EFFECT			A-16
	1.17.		SHARES			A-16
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PREDIX						A-16
	2.1.		ORGANIZATION OF PREDIX			A-16
	2.2.		CAPITAL STRUCTURE			A-16
	2.3.		OBLIGATIONS WITH RESPECT TO CAPITAL STOCK			A-17
	2.4.		AUTHORITY			A-17
	2.5.		PREDIX FINANCIAL STATEMENTS			A-18
	2.6.		ABSENCE OF CERTAIN CHANGES OR EVENTS			A-19
	2.7.		TAXES			A-19
	2.8.		INTELLECTUAL PROPERTY			A-20
	2.9.		COMPLIANCE; PERMITS; RESTRICTIONS			A-20
	2.10.		LITIGATION			A-22
	2.11.		BROKERS’ AND FINDERS’ FEES			A-22
	2.12.		EMPLOYEE BENEFIT PLANS			A-22
	2.13.		ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION OF EQUIPMENT			A-23
	2.14.		ENVIRONMENTAL MATTERS			A-23
	2.15.		LABOR MATTERS			A-24
	2.16.		AGREEMENTS, CONTRACTS AND COMMITMENTS			A-24
	2.17.		CHANGE OF CONTROL PAYMENTS			A-25
	2.18.		BOARD APPROVAL			A-25
	2.19.		BOOKS AND RECORDS			A-25
	2.20.		RESTRICTIONS ON BUSINESS ACTIVITIES			A-26
	2.21.		REAL PROPERTY LEASES			A-26
	2.22.		INSURANCE			A-26
	2.23.		CERTAIN BUSINESS PRACTICES			A-27

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					Page
	2.24.		SUPPLIERS AND MANUFACTURERS; EFFECT OF TRANSACTION			A-27
	2.25.		GOVERNMENT CONTRACTS			A-27
	2.26.		INTERESTED PARTY TRANSACTIONS			A-27
	2.27.		VOTING REQUIREMENTS			A-27
	2.28.		REGISTRATION STATEMENT; JOINT PROXY STATEMENT/ PROSPECTUS			A-27
	2.29.		DISCLOSURE			A-28
ARTICLE III REPRESENTATIONS AND WARRANTIES OF EPIX AND MERGER SUB						A-28
	3.1.		ORGANIZATION OF EPIX AND MERGER SUB			A-28
	3.2.		OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES			A-28
	3.3.		EPIX AND MERGER SUB CAPITAL STRUCTURE			A-28
	3.4.		OBLIGATIONS WITH RESPECT TO CAPITAL STOCK			A-29
	3.5.		AUTHORITY			A-29
	3.6.		EPIX FINANCIAL STATEMENTS			A-30
	3.7.		ABSENCE OF CERTAIN CHANGES OR EVENTS			A-31
	3.8.		TAXES			A-31
	3.9.		BROKERS’ AND FINDERS’ FEES			A-32
	3.10.		BOARD APPROVAL			A-32
	3.11.		VALID ISSUANCE			A-32
	3.12.		VOTING REQUIREMENTS			A-32
	3.13.		FAIRNESS OPINION			A-32
	3.14.		INTELLECTUAL PROPERTY			A-32
	3.15.		COMPLIANCE; PERMITS; RESTRICTIONS			A-33
	3.16.		LITIGATION			A-34
	3.17.		EMPLOYEE BENEFIT PLANS			A-34
	3.18.		ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION OF EQUIPMENT			A-35
	3.19.		ENVIRONMENTAL MATTERS			A-35
	3.20.		LABOR MATTERS			A-36
	3.21.		AGREEMENTS, CONTRACTS AND COMMITMENTS			A-36
	3.22.		SEVERANCE PAYMENTS			A-37
	3.23.		BOOKS AND RECORDS			A-37
	3.24.		RESTRICTIONS ON BUSINESS ACTIVITIES			A-37
	3.25.		REAL PROPERTY LEASES			A-37
	3.26.		INSURANCE			A-38
	3.27.		CERTAIN BUSINESS PRACTICES			A-38
	3.28.		SUPPLIERS AND MANUFACTURERS; EFFECT OF TRANSACTION			A-38
	3.29.		GOVERNMENT CONTRACTS			A-38
	3.30.		INTERESTED PARTY TRANSACTIONS			A-38
	3.31.		REGISTRATION STATEMENT; JOINT PROXY STATEMENT/ PROSPECTUS			A-39
	3.32.		DISCLOSURE			A-39
ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER						A-39
	4.1.		CONDUCT OF BUSINESS BY PREDIX			A-39
	4.2.		MUTUAL NON-SOLICITATION			A-41
	4.3.		CONDUCT OF BUSINESS BY EPIX			A-43

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					Page
ARTICLE V ADDITIONAL AGREEMENTS						A-45
	5.1.		JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER			A-45
	5.2.		MEETINGS OF STOCKHOLDERS			A-46
	5.3.		ACCESS TO INFORMATION; CONFIDENTIALITY			A-46
	5.4.		CONSENTS; APPROVALS			A-46
	5.5.		STOCK OPTIONS AND WARRANTS			A-47
	5.6.		PREDIX AFFILIATE AGREEMENTS			A-48
	5.7.		LOCKUP AGREEMENTS			A-48
	5.8.		INDEMNIFICATION AND INSURANCE			A-48
	5.9.		NOTIFICATION OF CERTAIN MATTERS			A-49
	5.10.		FURTHER ACTION			A-50
	5.11.		PUBLIC ANNOUNCEMENTS			A-50
	5.12.		LISTING OF EPIX COMMON STOCK			A-50
	5.13.		CONVEYANCE TAXES			A-50
	5.14.		TAX-FREE REORGANIZATION			A-50
	5.15.		BOARD OF DIRECTORS AND OFFICERS OF EPIX			A-50
	5.16.		ACTIONS BY EPIX AND MERGER SUB			A-51
	5.17.		EMPLOYEE BENEFITS; SEVERANCE PAYMENTS			A-51
	5.18.		RESALE REGISTRATION STATEMENT			A-51
	5.19.		ACCOUNTANT’S LETTERS			A-52
ARTICLE VI CONDITIONS TO THE MERGER						A-52
	6.1.		CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER			A-52
	6.2.		ADDITIONAL CONDITIONS TO OBLIGATIONS OF EPIX			A-53
	6.3.		ADDITIONAL CONDITIONS TO OBLIGATIONS OF PREDIX			A-54
ARTICLE VII TERMINATION						A-55
	7.1.		TERMINATION			A-55
	7.2.		NOTICE OF TERMINATION; EFFECT OF TERMINATION			A-56
	7.3.		FEES AND EXPENSES			A-56
ARTICLE VIII GENERAL PROVISIONS						A-56
	8.1.		EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS			A-56
	8.2.		NOTICES			A-57
	8.3.		CERTAIN DEFINITIONS			A-57
	8.4.		AMENDMENT			A-58
	8.5.		WAIVER			A-58
	8.6.		HEADINGS			A-58
	8.7.		SEVERABILITY			A-58
	8.8.		ENTIRE AGREEMENT			A-58
	8.9.		ASSIGNMENT			A-58
	8.10.		PARTIES IN INTEREST			A-58
	8.11.		FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE			A-58
	8.12.		GOVERNING LAW			A-58
	8.13.		OTHER REMEDIES; SPECIFIC PERFORMANCE			A-58
	8.14.		COUNTERPARTS			A-59

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Exhibit A		Form of Voting Agreement
Exhibit B		Form of Certificate of Merger
Exhibit C		Form of Predix Affiliate Agreement
Exhibit D		Form of Lockup Agreement
Exhibit E		Form of Opinion of Predix’s Counsel
Exhibit F		Form of Opinion of EPIX’s Counsel
Schedule 1		List of Predix Management for purpose of knowledge qualifiers
Schedule 2		List of Key Predix Employees under Section 2.15
Schedule 3		List of EPIX Management for purpose of knowledge qualifiers
Schedule 4		List of Key EPIX Employees under Section 3.20
Schedule 5		List of Predix Stockholders who are signatories to the Lockup Agreement
Schedule 6		Employees not entitled to severance payments and amount of severance payments
Schedule 7		List of Affiliate Stockholders for S-3 Registration Statement
Schedule 8		List of consents under Predix agreements to be obtained by Predix as a condition to closing
Schedule 9		Management
Predix Disclosure Schedule
EPIX Disclosure Schedule

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A-9

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	(a) Conversion of Predix Shares. Every Share (as defined in Section 1.17) issued and outstanding immediately prior to the Effective Time (other than the Dissenting Shares as defined in Section 1.14) shall be automatically converted into the right to receive 1.248509 shares (the “Exchange Ratio”) of validly issued, fully paid and non-assessable EPIX Common Stock (the “Initial Merger Consideration”).
	(b) Cancellation. Each Share held in the treasury of Predix and each Share owned by EPIX or by any direct or indirect wholly-owned subsidiary of Predix or EPIX immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, be canceled and retired without payment of any consideration therefor other than pursuant to the terms herein and cease to exist.
	(c) Stock Options. All options to purchase Predix Common Stock then outstanding under Predix’s Amended and Restated 2003 Stock Incentive Plan (the “Predix 2003 Stock Plan”) and the

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	Physiome Sciences, Inc. 1997 Stock Option Plan (the “Physiome 1997 Stock Option Plan,” together with the Predix 2003 Stock Plan, the “Predix Stock Plans”) shall be assumed by EPIX in accordance with Section 5.5.
	(d) Warrants. All warrants outstanding at the Effective Time to purchase Predix Common Stock or Predix Preferred Stock (collectively, the “Predix Warrants”), shall be assumed by EPIX in accordance with Section 5.5.
	(e) Adjustments. If, after the date of this Agreement, (i) Predix grants additional options to purchase Predix Common Stock pursuant to Section 4.1(c) or (ii) EPIX issues additional shares of EPIX Common Stock before the Effective Time, the Exchange Ratio shall be adjusted to reflect fully the effect of the issuance of any such options to purchase Predix Common Stock or additional shares of EPIX Common Stock, as the case may be. The Exchange Ratio shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into EPIX Common Stock or Shares), reorganization, recapitalization or other like change with respect to EPIX Common Stock or Shares occurring after the date hereof and prior to the Effective Time. For the avoidance of doubt, the Exchange Ratio shall equal the quotient of (i) the sum of (A) the number of outstanding shares of EPIX Common Stock immediately prior to the Effective Time divided by .5001 minus (B) the number of outstanding shares of EPIX Common Stock immediately prior to the Effective Time, divided by (ii) the number of outstanding Shares and shares of Predix Common Stock or Predix Preferred Stock reserved for issuance upon the exercise of outstanding warrants and options, in each case, as of immediately prior to the Effective Time.
	(f) Fractional Shares. No fraction of a share of EPIX Common Stock will be issued, but in lieu thereof each holder of Predix Common Stock and Predix Preferred Stock who would otherwise be entitled to a fraction of a share of EPIX Common Stock (after aggregating all fractional shares of EPIX Common Stock to be received by such holder) shall receive from EPIX an amount of cash (rounded to the nearest whole cent), without interest, equal to the product of (i) such fraction, multiplied by (ii) the applicable price per share calculated in accordance with Section 1.7(a) based on the average closing price of a share of EPIX Common Stock on The NASDAQ National Market (the “NASDAQ”) over the five (5) trading days ending on the trading day prior to the Effective Time.
	(g) Limitations. Notwithstanding anything contained in this Section 1.7, the aggregate number of shares of EPIX Common Stock issuable under this Section 1.7 (as a result of the conversion of the Shares and the exercise of the options and warrants, if any, to purchase Predix Common Stock or Predix Preferred Stock assumed by EPIX) shall in no event exceed forty-nine and ninety-nine hundredths percent (49.99%) of the outstanding shares of EPIX Common Stock immediately after the Effective Time.

	(a) Amount of Milestone Payment. The Milestone Payment shall equal $35,000,000.
	(b) Timing of Milestone Payment. EPIX shall make the Milestone Payment on a date that is within ninety (90) days following the Achievement of the Milestone (the “Milestone Payment Date”); provided, that in no case shall the Milestone Payment Date occur before the Effective Time; and, further provided, that a portion of the Milestone Payment may be deferred in accordance with paragraph (d)(ii) below.

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	(c) Achievement of the Milestone. For purposes of this Agreement, the term “Achievement of the Milestone” shall mean EPIX’s determination (in accordance with Section 5.16), whether before or after the Effective Time, that either of the following occurs on or before June 30, 2008:

	(i) Clinical Milestone — the occurrence of one of the following:

	(A) Receipt of Positive Data from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-00023 for the treatment of Generalized Anxiety Disorder, Depression, ADHD, or other neuropsychiatric disorder with at least 100 patients.
	(B) Receipt of Positive Data from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-03140 for the treatment of Alzheimer’s disease or other cognitive disorders with at least 60 patients.
	(C) Receipt of Positive Data from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-08066 for the treatment of Pulmonary Artery Hypertension, COPD or a different indication as selected by Predix or after the Effective Time by EPIX with at least 60 patients.
	(D) Receipt of Positive Data from a randomized, placebo-or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-07034 for the treatment of Obesity, Cognitive Disorders or a different indication as selected by Predix or after the Effective Time by EPIX with at least 60 patients.

	The term “Positive Data” shall mean that PRX-00023, PRX-03140, PRX-08066 or PRX-07034, as the case may be, shall have demonstrated statistically significant final results (meaning a p-value of less than 0.05) against the primary endpoints of the clinical trial in question as set forth in the applicable protocols of such clinical trial.

(ii) Predix or the Surviving Corporation, entering into a strategic partnership for any drug candidate discovered or to be discovered by Predix that provides for the strategic partner to make upfront, milestone and research funding payments to Predix or the Surviving Corporation of greater than $50,000,000, $20,000,000 of which must be in Unrestricted Cash through (A) non-refundable license fees, (B) committed and non-refundable research funding payments; and/or (C) premiums paid in connection with an equity investment by the strategic partner upon entering into the strategic partnership or in less than sixty (60) days following entry into the strategic partnership. “Unrestricted Cash” for purposes of this Section 1.8(c)(ii) shall mean cash payments received by Predix or the Surviving Corporation by June 30, 2008 that may be used to fund Predix’s or the Surviving Corporation’s existing or planned research and development programs as of the Effective Time and reflected in Predix’s 2006 operating plan and budget provided to EPIX or the 2007 operating plan and budget approved by the Board of Directors of EPIX.

	(d) Form and Value of Payment. The Milestone Payment shall be paid at the option of EPIX (determined in accordance with Section 5.16), either:

	(i) in cash, additional shares of validly issued, fully paid and non-assessable EPIX Common Stock or any combination thereof. The number of shares of EPIX Common Stock, if any, to be issued in connection with this option shall equal (i) the amount of the Milestone Payment EPIX determines to pay in shares of EPIX Common Stock, divided by (ii) the amount that is equal to the average closing price of a share of EPIX Common Stock on the NASDAQ over the five (5) trading days ending on the trading day that is ten (10) days prior to the Milestone Payment Date; or
	(ii) (x) $20,000,000 payable in accordance with paragraph (i) above on the Milestone Payment Date and (y) $15,000,000 (the “Deferred Amount”) payable on the date that is twelve (12) months thereafter (the “Deferred Payment Date”) in accordance with Section 1.8(e) below.

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	Notwithstanding the foregoing, the Milestone Payment paid to each holder of an option or warrant to purchase Predix Common Stock or Predix Preferred Stock at the Effective Time shall be made solely in cash and, provided, further that EPIX will not issue fractional shares of EPIX Common Stock pursuant to this Section 1.8, but will pay cash in lieu thereof.
	(e) Deferred Payment. In the event that EPIX elects to pay the Milestone Payment pursuant to Section 1.8(d)(ii) above, the Deferred Amount shall be paid in shares of validly issued, fully paid and non-assessable EPIX Common Stock to the fullest extent permissible under Section 1.8(f) below, with any remaining balance paid in cash plus interest on such cash amount at an annual rate (using a 360-day year) of ten percent (10%) calculated from the Milestone Payment Date. The number of shares of EPIX Common Stock to be issued in connection with this Section 1.8(e) shall equal (i) the Deferred Amount, divided by (ii) seventy-five percent (75%) of the amount that is equal to the average closing price of a share of EPIX Common Stock on the NASDAQ over the thirty (30) trading days ending on the trading day that is ten (10) days prior to the Deferred Payment Date.
	(f) Limitations. Notwithstanding anything else contained herein, in no event shall the aggregate number of shares of EPIX Common Stock that may be issued pursuant to this Section 1.8, when combined with the aggregate Initial Merger Consideration and shares of EPIX Common Stock issued or issuable as a result of the exercise of the options and warrants, if any, to purchase Predix Common Stock or Predix Preferred Stock assumed by EPIX, exceed forty-nine and ninety-nine hundredths percent (49.99%) of the outstanding shares of EPIX Common Stock immediately after such issuance.
	(g) Allocation of Milestone Payment. The Milestone Payment shall be allocated and paid to each holder of record at the Effective Time of a Share, Predix Warrant or an option to purchase Predix Common Stock, in each case, pro rata based upon the percentage of the Initial Merger Consideration that such holder would have received pursuant to Section 1.7(a), assuming that for these purposes that each Predix Warrant and option to purchase Predix Common Stock or Predix Preferred Stock (whether or not vested) was exercised in full immediately prior to the Effective Time.

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	(a) Predix and its subsidiaries: (i) have paid all Taxes they are obligated to pay as reflected on the Tax Returns or otherwise; and (ii) have withheld all federal, state, local and foreign Taxes required to be withheld with respect to their employees or otherwise.
	(b) There is no Tax deficiency outstanding, proposed or assessed against Predix and its subsidiaries that is not accurately reflected as a liability on the Predix Balance Sheet, nor have Predix or its subsidiaries executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.
	(c) Predix and its subsidiaries do not have any liability for unpaid Taxes that has not been properly accrued for under GAAP and reserved for on the Predix Balance Sheet, whether asserted or unasserted, contingent or otherwise.
	(d) Predix and its subsidiaries are not a party to any agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent contractor that, individually or collectively with any other such contracts, would reasonably be expected to give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162(m) of the Code (or any comparable provision of state or foreign tax laws).

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	(e) Predix and its subsidiaries are not, nor have ever been, a party to or bound by any tax indemnity agreement, tax sharing agreement, tax allocation agreement or similar contract or agreement.

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	(a) except as described in Section 2.12(a) of the Predix Disclosure Schedule, any bonus, deferred compensation, incentive compensation, pension, profit-sharing or retirement plans, or any other employee benefit plans or arrangements;
	(b) except as described in Section 2.12(a) of the Predix Disclosure Schedule, any employment or consulting agreement, contract or commitment with any officer or director level employee, not terminable by Predix or its subsidiaries on thirty (30) days notice without liability, except to the extent general principles of wrongful termination law may limit Predix’s or its subsidiaries’ ability to terminate employees at will;

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	(c) except as described in Section 2.12(a) of the Predix Disclosure Schedule, any agreement or plan, including, without limitation, any stock option plan, stock appreciation right plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;
	(d) any agreement of indemnification or guaranty not entered into in the ordinary course of business other than indemnification agreements between Predix or its subsidiaries and any of their officers or directors;
	(e) any agreement, contract or commitment containing any covenant limiting the freedom of Predix or its subsidiaries to engage in any line of business or compete with any person;
	(f) any agreement, contract or commitment relating to capital expenditures and involving future obligations in excess of $25,000 and not cancelable without penalty;
	(g) any agreement, contract or commitment currently in force relating to the disposition or acquisition of assets not in the ordinary course of business or any ownership interest in any corporation, partnership, joint venture or other business enterprise;
	(h) any mortgages, indentures, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit in excess of $25,000;
	(i) any joint marketing or development agreement;
	(j) any distribution agreement (identifying any that contain exclusivity provisions); or
	(k) any other agreement, contract or commitment (excluding real and personal property leases) which involve payment by Predix or its subsidiaries under any such agreement, contract or commitment of $25,000 or more in the aggregate.

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	(a) As to Predix or its subsidiaries, each lease or sublease is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be limited by bankruptcy and other similar laws and general principles of equity;
	(b) Neither Predix or any of its subsidiaries are in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of Predix or its subsidiaries, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by Predix or its subsidiaries or, to the knowledge of Predix and its subsidiaries, any other party under such lease or sublease, except as would not reasonably be expected to have a Material Adverse Effect;
	(c) Neither Predix or its subsidiaries have assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any lease or sublease; and
	(d) there are no liens, easements, covenants or other restrictions applicable to the real property subject to such lease, except for Permitted Liens.

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	(a) EPIX: (i) have paid all Taxes they are obligated to pay as reflected on the Tax Returns or otherwise; and (ii) have withheld all federal, state, local and foreign Taxes required to be withheld with respect to their employees or otherwise.
	(b) There is no Tax deficiency outstanding, proposed or assessed against EPIX and its subsidiaries that is not accurately reflected as a liability on the EPIX Balance Sheet, nor has EPIX executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.
	(c) EPIX does not have any liability for unpaid Taxes that has not been properly accrued for under GAAP and reserved for on the EPIX Balance Sheet, whether asserted or unasserted, contingent or otherwise.
	(d) EPIX is not a party to any agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent contractor that, individually or collectively with any other such contracts, would reasonably be expected to give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162(m) of the Code (or any comparable provision of state or foreign tax laws).
	(e) EPIX is not, nor has ever been, a party to or bound by any tax indemnity agreement, tax sharing agreement, tax allocation agreement or similar contract or agreement.

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	(a) except as described in Section 3.17 of the EPIX Disclosure Schedule, any bonus, deferred compensation, incentive compensation, pension, profit-sharing or retirement plans, or any other employee benefit plans or arrangements;
	(b) except as described in Section 3.17 of the EPIX Disclosure Schedule, any employment or consulting agreement, contract or commitment with any officer or director level employee, not terminable by EPIX on thirty (30) days notice without liability, except to the extent general principles of wrongful termination law may limit EPIX’s ability to terminate employees at will;
	(c) except as described in Section 3.17 of the EPIX Disclosure Schedule, any agreement or plan, including, without limitation, any stock option plan, stock appreciation right plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;
	(d) any agreement of indemnification or guaranty not entered into in the ordinary course of business other than indemnification agreements between EPIX and any of their officers or directors;
	(e) any agreement, contract or commitment containing any covenant limiting the freedom of EPIX to engage in any line of business or compete with any person;
	(f) any agreement, contract or commitment relating to capital expenditures and involving future obligations in excess of $25,000 and not cancelable without penalty;

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	(g) any agreement, contract or commitment currently in force relating to the disposition or acquisition of assets not in the ordinary course of business or any ownership interest in any corporation, partnership, joint venture or other business enterprise;
	(h) any mortgages, indentures, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit in excess of $25,000;
	(i) any joint marketing or development agreement;
	(j) any distribution agreement (identifying any that contain exclusivity provisions); or
	(k) any other agreement, contract or commitment (excluding real and personal property leases) which involve payment by EPIX under any such agreement, contract or commitment of $25,000 or more in the aggregate.

	(a) As to EPIX, each lease or sublease is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be limited by bankruptcy and other similar laws and general principles of equity;
	(b) EPIX is not in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of EPIX, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by EPIX or, to the knowledge of EPIX, any other party under such lease or sublease, except as would not reasonably be expected to have a Material Adverse Effect;

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	(c) EPIX has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any lease or sublease; and
	(d) there are no liens, easements, covenants or other restrictions applicable to the real property subject to such lease, except for Permitted Liens.

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	(a) amend or otherwise change its Certificate of Incorporation or Bylaws, or otherwise alter its corporate structure through merger, liquidation, reorganization or otherwise;
	(b) sell, pledge, dispose of or encumber any assets (except for (i) sales of assets in the ordinary course of business and (ii) dispositions of obsolete or worthless assets);

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	(c) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) (except for (i) the issuance of options or shares of Predix Common Stock issuable pursuant to employee stock options under the Predix Stock Plans or the Predix Warrants, as the case may be, which in the case of Predix Warrants are outstanding on the date hereof and (ii) actions taken by Predix or its subsidiaries in furtherance of the Merger or the other transactions contemplated hereby, as to which actions Predix or its subsidiaries shall first consult with and obtain written approval from EPIX);
	(d) accelerate, amend or change the period of exercisability of options granted under the Predix Stock Plans or the Predix Warrants, as the case may be, or authorize cash payments in exchange for (i) any options granted under the Predix Stock Plans or (ii) the Predix Warrants, except as contemplated by this Agreement;
	(e) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly-owned subsidiary may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the terms of, repurchase, redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities, or propose to do any of the foregoing (except for (A) the repurchase of shares of restricted stock under, and in accordance with the terms of, the applicable restricted stock agreements, if Predix or its subsidiaries have notified EPIX in writing at least five (5) business days prior to any such repurchase and included in such notification is a description of the circumstances giving rise to, and permitting, such repurchase and (B) transactions in furtherance of the Merger or the other transactions contemplated hereby, as to which actions Predix or its subsidiaries shall first consult with and obtain written approval from EPIX);
	(f) sell, transfer, license, sublicense or otherwise dispose of any Predix IP Rights, or amend or modify any existing agreements with respect to any Predix IP Rights;
	(g) (i) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances in excess of $100,000 except in the ordinary course of business consistent with past practice; (iii) enter into or amend any material contract or agreement and any Predix Contract other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000, taken as a whole (except pursuant to a capital expenditure budget approved in writing by both parties); or (v) enter into or amend any contract, agreement, commitment or arrangement and any Predix Contract to effect any of the matters prohibited by this Section 4.1(g);
	(h) increase the compensation payable or to become payable to its officers, employees or consultants, except for increases in salary or wages of employees who are not officers in accordance with past practices, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer (except for officers who are terminated on an involuntary basis) or other employee, or establish, adopt, enter into or amend any employee benefit plan, provided, that Predix and its subsidiaries may provide their officers and employees retention bonuses to retain such officer’s or employee’s services through the Effective Time, valued at not more than twenty percent (20%) of such officer’s or employee’s yearly base salary as of the date hereof, payable in cash, stock or an option to purchase stock that becomes payable or vests on or after the Effective Time, if Predix or its subsidiaries have notified EPIX in writing at least five (5) business days prior to granting any such retention bonus and included in such notification is a description of

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	the circumstances giving rise to such retention bonus, provided, further, that the aggregate value of all retention bonuses granted by Predix shall not exceed $350,000;
	(i) take any action, other than as required by GAAP, to change accounting policies or procedures;
	(j) make any material tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of any tax;
	(k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in its financial statements, or incurred in the ordinary course of business and consistent with past practice;
	(l) enter into any material partnership arrangements, joint development agreements, strategic alliances or collaborations;
	(m) except as may be required by law, take any action to terminate or amend any of the Predix Employee Plans other than in connection with the Merger; or
	(n) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.1(a) through (m) above, or any action which would make any of the representations or warranties of Predix contained in this Agreement untrue or incorrect or prevent Predix from performing or cause Predix not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied.
	If Predix or its subsidiaries wish to obtain the consent of EPIX to take actions for which prior consent is required pursuant to this Section 4.1, Predix shall request such consent in writing by telecopy to the attention of the Chief Executive Officer of EPIX. A consent signed by either such officer shall be deemed sufficient for purposes hereof. In addition, if EPIX receives such a request but does not respond in writing (which may include an e-mailed response) to such request within five (5) business days after the date the request is telecopied, EPIX shall be deemed to have consented to the requested action for all purposes of this Agreement.

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	(a) amend or otherwise change its Certificate of Incorporation or By-Laws, or otherwise alter its corporate structure through merger, liquidation, reorganization or otherwise (other than the appointment of up to two (2) additional members of the Board of Directors);
	(b) sell, pledge, dispose of or encumber any assets (except for (i) sales of assets in the ordinary course of business and (ii) dispositions of obsolete or worthless assets);
	(c) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) (except for (i) the issuance of shares of EPIX Common Stock issuable pursuant to the exercise of employee stock options outstanding on the date of this Agreement under the EPIX Stock Plans or pursuant to purchase rights under the EPIX ESPP, and (ii) actions taken by EPIX in furtherance of the Merger or the other transactions contemplated hereby, as to which actions EPIX shall first consult with and obtain written approval from Predix);
	(d) accelerate, amend or change the period of exercisability of options granted under the EPIX Stock Plans or authorize cash payments in exchange for any options granted under the EPIX Stock Plans except as contemplated by this Agreement;
	(e) (i) declare, set aside, make or pay any dividend or other distribution (whether in case, stock or property or any combination thereof) in respect of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the terms of, repurchase, redeem or otherwise acquire, any of its securities, or propose to do any of the foregoing (except for (A) the repurchase of shares of restricted stock under, and in accordance with the terms of, the applicable restricted stock agreements, if EPIX has notified Predix in writing at least five (5) business days prior to any such repurchase and included in such notification is a description of the circumstances giving rise to, and permitting, such repurchase and (B) transactions in furtherance of the Merger or the other transactions contemplated hereby, as to which actions EPIX shall first consult with and obtain written approval from Predix);
	(f) sell, transfer, license, sublicense or otherwise dispose of any EPIX IP Rights, or amend or modify any existing agreements with respect to any EPIX IP Rights;
	(g) (i) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances in excess of $100,000 except in the ordinary course of business consistent with past practice;

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	(iii) enter into or amend any material contract or agreement other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000, taken as a whole (except pursuant to a capital expenditure budget approved in writing by both parties); or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.3(g);
	(h) increase the compensation payable or to become payable to its officers, employees or consultants, except for increases in salary or wages of employees who are not officers in accordance with past practices, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer (except for officers who are terminated on an involuntary basis) or other employee, or establish, adopt, enter into or amend any employee benefit plan, provided, that EPIX may provide its officers and employees retention bonuses to retain such officer’s or employee’s services through the Effective Time, valued at not more than twenty percent (20%) of such officer’s or employee’s yearly base salary as of the date hereof, payable in cash, stock or an option to purchase stock that becomes payable or vests on or after the Effective Time, if EPIX has notified Predix in writing at least five (5) business days prior to granting any such retention bonus, provided, further, that the aggregate value of all retention bonuses granted by EPIX shall not exceed $350,000;
	(i) take any action, other than as required by GAAP, to change accounting policies or procedures;
	(j) make any material tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of any tax;
	(k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in its financial statements, or incurred in the ordinary course of business and consistent with past practice;
	(l) enter into any material partnership arrangements, joint development agreements, strategic alliances or collaborations;
	(m) except as may be required by law, take any action to terminate or amend any of EPIX’s employee benefit plans (as defined in Section 3(3) of ERISA) other than in connection with the Merger; or
	(n) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.3(a) through (m), or any action which would make any of the representations or warranties of EPIX contained in this Agreement untrue or incorrect or prevent EPIX from performing or cause EPIX not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied.
	If EPIX wishes to obtain the consent of Predix to take actions for which prior consent is required pursuant to this Section 4.3, it shall request such consent in writing by telecopy to the attention of the Chief Executive Officer and the Chief Financial Officer of Predix. A consent signed by such officer shall be deemed sufficient for purposes hereof. In addition, if Predix receives such a request but does not respond in writing (which may include an e-mailed response) to such request within five (5) business days after the date the request is telecopied, Predix shall be deemed to have consented to the requested action for all purposes of this Agreement.

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	(a) Effectiveness of the Registration Statement. The Registration Statement shall have been declared effective by the SEC under the Securities Act. No stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings for that purpose and no similar proceeding in respect of the Joint Proxy Statement shall have been initiated or, to the knowledge of EPIX or Predix, threatened by the SEC;
	(b) Governmental Approvals. All approvals of, declarations or filings, with any Governmental Authority necessary for the consummation of the Merger, if any, shall have been obtained or made. The waiting period (and any extension thereof) under the HSR Act relating to the transaction contemplated hereby will have expired or terminated early, if required;
	(c) Stockholder Approval. This Agreement shall have been adopted by the requisite vote under Delaware Law of the stockholders of EPIX and Predix, respectively, and EPIX’s and Predix’s Certificate of Incorporation and Bylaws, respectively; and the issuance of shares of EPIX Common Stock by virtue of the Merger shall have been approved by the requisite vote under the rules of the SEC, the National Association of Securities Dealers, Inc. or Delaware Law by the stockholders of EPIX;
	(d) No Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction or other legal restraint or prohibition (an “Injunction”) preventing the consummation of the Merger on substantially identical terms and conferring upon the parties hereto substantially all the rights and benefits as contemplated herein, shall be in effect, nor shall any proceeding brought by any Governmental Authority seeking any of the foregoing be pending; and there shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger on substantially identical terms and conferring upon the parties hereto substantially all the rights and benefits as contemplated herein, illegal;
	(e) Tax Opinions. EPIX shall have received the written opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and Predix shall have received the written opinion of Goodwin Procter LLP, in form and substance reasonably satisfactory to them to the effect that the Merger will constitute a reorganization within the meaning of Section 368 of the Code; and

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(f) EPIX Notes. No Injunction, or final, non-appealable judgment, decree or order issued by any court of competent jurisdiction shall be in effect which Injunction, judgment, decree or order would result in the acceleration of payment of the amounts outstanding under that certain Indenture, dated as of June 7, 2004, between EPIX and U.S. Bank National Association, as trustee, or any notes issued thereunder.

	(a) Representations and Warranties. The representations and warranties of Predix contained in this Agreement (together with the Predix Disclosure Schedule) shall be true and correct in all material respects on and as of the Effective Time, with the same force and effect as if made on and as of the Effective Time, except for (i) those representations and warranties that are qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects and (ii) those representations and warranties which address matters only as of a particular date, in which case such representations and warranties that are qualified by materiality or Material Adverse Effect shall be true and correct in all respects, and those not so qualified shall remain true and correct as of such date; and EPIX shall have received a certificate to such effect signed by the President and Chief Executive Officer and Chief Financial Officer of Predix;
	(b) Agreements and Covenants. Predix shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time, and EPIX shall have received a certificate to such effect signed by the President and Chief Executive Officer and Chief Financial Officer of Predix;
	(c) Consents Obtained. EPIX shall have received evidence, in form and substance satisfactory to it, that the consents, waivers, approvals, authorizations or orders required to be obtained, and all filings to be made, by Predix shall have been obtained and made by Predix;
	(d) Governmental Actions. There shall not have been instituted, pending or threatened any action or proceeding (or any investigation or other inquiry that might result in such an action or proceeding) by any Governmental Authority, nor shall there be in effect any judgment, decree or order of any Governmental Authority, in either case, seeking to prohibit or limit EPIX from exercising all material rights and privileges pertaining to its ownership of the Surviving Corporation or the ownership or operation by EPIX or the Surviving Corporation of all or a material portion of the business or assets of EPIX or the Surviving Corporation, or seeking to compel EPIX, the Surviving Corporation or any of their subsidiaries to dispose of or hold separate all or any material portion of the business or assets of EPIX or the Surviving Corporation as a result of the Merger or the transactions contemplated by this Agreement;
	(e) Material Adverse Change. Since the date of this Agreement, there shall have been no change, occurrence or circumstance in the business, results of operations or financial condition of Predix or any subsidiary of Predix having or reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Predix;
	(f) Affiliate Agreements. EPIX shall have received from each Predix Affiliate an Affiliate Agreement, and such agreement shall be in full force and effect;
	(g) Transfer of Material Agreements. Predix shall have received all consents and approvals required to consummate the Merger under Predix’s and its subsidiaries’ agreements listed on Schedule 8 hereto;
	(h) Other Deliveries. EPIX shall have received such other certificates and instruments (including without limitation certificates of good standing of Predix and each of its subsidiaries in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;

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	(i) Voting Agreement. Stockholders of Predix holding an aggregate of approximately forty percent (40%) of the voting shares of Predix shall have entered into a Voting Agreement, substantially in the form of Exhibit A hereto, and such agreement shall be in full force and effect;
	(j) Opinion of Predix’s Counsel. EPIX shall have received from Goodwin Procter LLP, counsel to Predix, an opinion, substantially in the form of Exhibit E hereto, addressed to EPIX dated as of the Effective Date; and

	(a) Representations and Warranties. The representations and warranties of EPIX contained in this Agreement (together with the EPIX Disclosure Schedule) shall be true and correct in all material respects on and as of the Effective Time, with the same force and effect as if made on and as of the Effective Time, except for (i) those representations and warranties that are qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects and (ii) those representations and warranties which address matters only as of a particular date, in which case such representations and warranties that are qualified by materiality or Material Adverse Effect shall be true and correct in all respects, and those not so qualified shall remain true and correct as of such date; and Predix shall have received a certificate to such effect signed by the Chief Executive Officer and Principal Accounting Officer of EPIX;
	(b) Agreements and Covenants. EPIX shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time, except to the extent any such non-performance or non-compliance would not have a Material Adverse Effect on EPIX, and Predix shall have received a certificate to such effect signed by the Chief Executive Officer and Principal Accounting Officer of EPIX;
	(c) Consents Obtained. Predix shall have received evidence, in form and substance satisfactory to it, that all material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to be made, by EPIX for the authorization, execution and delivery of this Agreement and the consummation by them of the transactions contemplated hereby shall have been obtained and made by EPIX;
	(d) Governmental Actions. There shall not have been instituted, pending or threatened any action or proceeding (or any investigation or other inquiry that might result in such an action or proceeding) by any Governmental Authority, nor shall there be in effect any judgment, decree or order of any Governmental Authority, in either case, seeking to prohibit or limit Predix from exercising all material rights and privileges pertaining to its ownership of the Surviving Corporation or the ownership or operation by Predix of all or a material portion of the business or assets of Predix and its subsidiaries, or seeking to compel Predix or its subsidiaries to dispose of or hold separate all or any material portion of the business or assets of Predix or its subsidiaries, as a result of the Merger or the transactions contemplated by this Agreement;
	(e) Material Adverse Change. Since the date of this Agreement, there shall have been no change, occurrence or circumstance in the business, results of operations or financial condition of EPIX having or reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on EPIX;
	(f) Opinion of EPIX’s Counsel. Predix shall have received from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to EPIX, an opinion, substantially in the form of Exhibit F hereto, addressed to Predix dated as of the Effective Date;
	(g) NASDAQ Listing. The EPIX Common Stock shall be listed on the NASDAQ National Market as of and from the date of this Agreement through the Effective Time and the shares of EPIX Common Stock issued in the Merge shall have been approved for listing on the NASDAQ National Market as of the Effective Time;

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	(h) Other Deliveries. Predix shall have received such other certificates and instruments (including without limitation certificates of good standing of EPIX in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;
	(i) Closing Capital. EPIX’s cash, cash equivalents, restricted cash and securities available for sale at the Effective Time less the aggregate amount of any and all liabilities and obligations resulting from (i) severance or similar obligations of EPIX as of the Effective Time; (ii) fees payable to any financial advisor to EPIX; (iii) fees owed or payable to EPIX’s independent public accountants; (iv) bonus payments to employees upon consummation of the Merger; and (v) legal fees of EPIX in connection with the negotiation and execution of this Agreement and consummation of the Merger, shall be no less than the $110,000,000;
	(j) Board of Directors and Officers. EPIX shall have taken all actions necessary so that the Board of Directors of EPIX will be constituted as set forth in Section 5.15 of this Agreement immediately after the Effective Time. Each of the current officers of EPIX who is not listed on Schedule 9 hereto shall have delivered to EPIX their written resignations as officers of EPIX and each of the individuals on Schedule 9 hereto shall have been appointed officers of EPIX and shall serve in such capacity effective as of the Effective Time.

	(a) by mutual written consent duly authorized by the Boards of Directors of EPIX and Predix; or
	(b) by either EPIX or Predix if the Merger shall not have been consummated by July 31, 2006; provided, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of or resulted in the failure of the Merger to occur on or before such date; or
	(c) by either EPIX or Predix if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a non-appealable final order, decree or ruling or taken any other action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger; or
	(d) by EPIX, if the Board of Directors of Predix shall have withheld or withdrawn its recommendation in favor of the Merger; or
	(e) by EPIX, if there shall have occurred any Material Adverse Effect with respect to Predix since the date of this Agreement; or
	(f) by Predix, if the Board of Directors of EPIX shall have withheld or withdrawn its recommendation in favor of the Merger; or
	(g) by Predix, if there shall have occurred any Material Adverse Effect with respect to EPIX since the date of this Agreement; or
	(h) by either EPIX or Predix, if the required approval of the stockholders of EPIX or Predix contemplated by this Agreement shall not have been obtained by reason of the failure to obtain the requisite vote upon a vote taken at a meeting of stockholders convened therefor or at any adjournment thereof; provided, that the right to terminate this Agreement under this Section 7.1(h) shall not be

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	available to any party where the failure to obtain stockholder approval of such party shall have been caused by the action or failure to act of such party in breach of this Agreement; or
	(i) by either EPIX or Predix, upon a breach of any covenant or agreement on the part of Predix or EPIX, respectively, set forth in this Agreement, in either case, such that the conditions set forth in Section 6.2(b) or Section 6.3(b), would not be satisfied (a “Terminating Breach”), provided, that, if such Terminating Breach is curable prior to the expiration of five (5) days from its occurrence (but in no event later than July 31, 2006) by EPIX or Predix, as the case may be, through the exercise of its commercially reasonable efforts and for so long as EPIX or Predix, as the case may be, continues to exercise such commercially reasonable efforts, neither Predix nor EPIX, respectively, may terminate this Agreement under this Section 7.1(i) unless such 5-day period expires without such Terminating Breach having been cured; or
	(j) by either EPIX or Predix, if either is not in material breach of any of its obligations under that agreement, if any representation or warranty on the part of the other party set forth in this Agreement proves to have been untrue on the date hereof, if such failure to be true would reasonably be likely to have a Material Adverse Effect.

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	EPIX Pharmaceuticals, Inc.
	161 First Street
	Cambridge, MA 02142
	Attn: Chief Executive Officer
	With a copy to:
	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
	One Financial Center
	Boston, MA 02111
	Attn: William T. Whelan, Esq.

	Predix Pharmaceuticals Holdings, Inc.
	4 Maguire Road
	Lexington, MA 02421
	Attn: President and Chief Executive Officer
	With a copy to:
	Goodwin Procter LLP
	Exchange Place
	53 State Street
	Boston, MA 02109
	Attn.: Lawrence S. Wittenberg, Esq.

	(a) “affiliates” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person, including, without limitation, any partnership or joint venture in which Predix or EPIX, as the case may be, (either alone, or through or together with any other subsidiary) has, directly or indirectly, an interest of ten percent (10%) or more;
	(b) “business day” means any day other than a day on which banks in Boston, Massachusetts are required or authorized to be closed;
	(c) “person” means a person, corporation, partnership, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Exchange Act);
	(d) “subsidiary” or “subsidiaries” of the Surviving Corporation, EPIX, Predix or any other person means any corporation, partnership, joint venture or other legal entity of which the Surviving Corporation, EPIX, Predix or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity; and

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	(e) “trading day” means any day on which the NASDAQ is open and available for at least five (5) hours for the trading of EPIX Common Stock.

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	EPIX PHARMACEUTICALS, INC.

	By:	/s/ Michael J. Astrue

	Name: Michael J. Astrue
	Title: Chief Executive Officer
	EPIX DELAWARE, INC.

	By:	/s/ Philip T. Chase

	Name: Philip T. Chase
	Title: Treasurer and Secretary
	PREDIX PHARMACEUTICALS HOLDINGS, INC.

	By:	/s/ Michael G. Kauffman

	Name: Michael G. Kauffman, M.D., Ph.D.
	Title: President and Chief Executive Officer

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	•	Termination of employment for reasons other than for cause (such determination to be made at the sole and reasonable discretion of the then-current board of directors of EPIX); or
	•	Voluntary termination by the Continuing Employee following restructuring of such Continuing Employee’s job that results in a substantial diminution of base salary as in effect immediately prior to the Effective Time (such determination to be made at the sole and reasonable discretion of the then-current board of directors of EPIX).

	Continuation of base salary

CEO:		15 months
President:		12 months
Sr. VP or CXO:		9 months
Vice President:		6 months
Director (any level):		4.5 months
All other employees:		3 months

	COBRA

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	Appropriate outplacement program

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	1. The constituent business corporations participating in the merger herein certified are:

	(i) Predix Pharmaceuticals Holdings, Inc., a Delaware corporation; and
	(ii) EPIX Delaware, Inc., a Delaware corporation.

	2. An Agreement and Plan of Merger has been approved, adopted, certified, executed, and acknowledged by each of the aforesaid constituent corporations in accordance with the provisions of subsection (c) of Section 251 of the Delaware General Corporation Law (“DGCL”).
	3. The name of the surviving corporation in the merger herein certified is EPIX Delaware, Inc. which will continue its existence as said surviving corporation under the name Predix Pharmaceuticals Holdings, Inc. upon the effective date of said merger pursuant to the provisions of the DGCL.
	4. The certificate of incorporation of EPIX Delaware, Inc., as amended and attached hereto as Annex A, shall be the certificate of incorporation of the surviving corporation.
	5. The executed Agreement and Plan of Merger between the aforesaid constituent corporations is on file at an office of the aforesaid surviving corporation, the address of which is as follows: 161 First Street, Cambridge, Massachusetts 02142.
	6. A copy of the aforesaid Agreement and Plan of Merger will be furnished by the aforesaid surviving corporation, on request, and without cost, to any stockholder of each of the aforesaid constituent corporations.

Dated:           , 2006		EPIX Delaware, Inc.
		By:    Its:
Dated:           , 2006		Predix Pharmaceuticals Holdings, Inc.
		By:    Its:

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“These shares have been issued pursuant to a transaction governed by Rule 145 (“Rule 145”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and may only be sold, transferred or otherwise disposed of pursuant to an effective registration statement, in compliance with Rule 145 or in accordance with an exemption from the registration requirements of the Securities Act and otherwise in accordance with a certain letter agreement dated                    , 2006 between the holder and the Issuer, a copy of which is on file in the principal office of the Issuer.”

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	Very truly yours,
	(print name of stockholder above)

	By:

	Name:
	Title:

		(if applicable)

By:

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	Very truly yours,
	(print name of stockholder above)

	By:

	Name:
	Title:

		(if applicable)

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	1.     Representations of Stockholders. Stockholder represents and warrants to EPIX and Merger Sub that (a) Stockholder lawfully owns beneficially (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and of record all of the Stockholder Shares free and clear of all liens, claims, charges, security interests or other encumbrances (other than pursuant to this Agreement, the Merger Agreement, the agreements set forth on Exhibit A attached hereto or state or federal securities laws) and, except pursuant to this Agreement, the Merger Agreement, the agreements set forth on Exhibit A attached hereto or state or federal securities laws, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which Stockholder is a party relating to the pledge, disposition or voting of any Shares and there are no voting trusts or voting agreements with respect to the Stockholder Shares, (b) Stockholder does not beneficially own any Shares other than the Stockholder Shares and except as set forth below Stockholder’s signature on the signature page hereto, does not have any options, warrants or other rights to acquire any additional Shares or any security exercisable for or convertible into Shares, and (c) Stockholder has full power and authority to enter into, execute and deliver this Agreement and to perform fully Stockholder’s obligations hereunder. This Agreement has been duly executed and delivered and constitutes the legal, valid and binding obligation of Stockholder in accordance with its terms.
	2.     Agreement to Vote Shares; Irrevocable Proxy.

(a) Stockholder agrees during the term of this Agreement to vote the Stockholder Shares and any New Shares (as defined in Section 6 hereof) beneficially owned by the Stockholder at the record date for determining stockholders of record entitled to vote upon the Merger and the Merger Agreement at every meeting of the stockholders of Predix at which such matters are considered and at every adjournment or postponement thereof or by written consent: (i) in favor of adoption and approval of the Merger Agreement and the Merger, (ii) against any action that

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	would preclude fulfillment of a condition under the Merger Agreement to EPIX’s or Merger Sub’s obligation to consummate the Merger, (iii) against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation of Predix under the Merger Agreement and (iv) except for the Merger and the Merger Agreement, against any Acquisition Proposal (as defined in the Merger Agreement).
	(b) Stockholder hereby appoints EPIX and any designee of EPIX, and each of them individually, its proxies and attorneys-in-fact, with full power of substitution and resubstitution, to vote or act by written consent during the term of this Agreement with respect to the Stockholder Shares and any New Shares in accordance with Section 2(a). This proxy is given to secure the performance of the duties of Stockholder under this Agreement. Stockholder shall take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy. The proxy and power of attorney granted pursuant hereto by Stockholder shall be irrevocable during the term of this Agreement, shall be deemed to be coupled with an interest sufficient in law to support an irrevocable proxy and shall revoke any and all prior proxies granted by Stockholder. The power of attorney granted by Stockholder herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of Stockholder. The proxy and power of attorney granted hereunder shall terminate upon the termination of this Agreement.

	3.     No Voting Trusts or Other Arrangements. Stockholder agrees that Stockholder will not, and will not permit any entity under Stockholder’s control to, deposit any of the Stockholder Shares in a voting trust, grant any proxies with respect to the Stockholder Shares or subject any of the Stockholder Shares to any arrangement with respect to the voting of the Stockholder Shares other than agreements entered into with EPIX.
	4.     No Proxy Solicitations. Stockholder agrees that Stockholder will not, and will not permit any entity under Stockholder’s control to, (a) solicit proxies or become a “participant” in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act) in opposition to or competition with the approval of the Merger Agreement or the consummation of the Merger or otherwise encourage or assist any party in taking or planning any action which would reasonably be expected to compete with, impede, interfere with or attempt to discourage the Merger or inhibit the timely consummation of the Merger in accordance with the terms of the Merger Agreement, (b) directly or indirectly encourage, initiate or cooperate in a stockholders’ vote or action by written consent of Predix’s stockholders in opposition to or in competition with the approval of the Merger Agreement or the consummation of the Merger or (c) become a member of a “group” (as such term is used in Rule 13d-5 under the Exchange Act) with respect to any voting securities of Predix for the purpose of opposing or competing with the approval of the Merger Agreement or the consummation of the Merger; provided, however, that nothing in this Agreement shall prevent Stockholder from taking any action or omitting to take any action solely as a member of the Board of Directors of Predix (or any committee thereof) or as an officer of Predix or any of its subsidiaries.
	5.     Transfer and Encumbrance. On or after the date hereof and during the term of this Agreement, Stockholder agrees not to transfer (except pursuant to the Merger Agreement or as otherwise required by law or court order), sell, offer, exchange, pledge or otherwise dispose of or encumber any of the Stockholder Shares or New Shares.
	6.     Additional Purchases. Stockholder agrees that all Shares that Stockholder purchases, acquires the right to vote or share in the voting of, or otherwise acquires beneficial ownership of after the execution of this Agreement (“New Shares”), shall be subject to the terms of this Agreement to the same extent as if they constituted Stockholder Shares.
	7.     Specific Performance. Each party hereto acknowledges that it will be impossible to measure in money the damage to the other party if a party hereto fails to comply with any of the obligations imposed by this Agreement, that every such obligation is material and that, in the event of any such failure, the other party will not have an adequate remedy at law or damages. Accordingly, each party

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	hereto agrees that injunctive relief or other equitable remedy, in addition to remedies at law or damages, is the appropriate remedy for any such failure and will not oppose the granting of such relief on the basis that the other party has an adequate remedy at law. Each party hereto agrees that it will not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with any other party’s seeking or obtaining such equitable relief.
	8.     No Agreement as Director or Officer. Stockholder makes no agreement or understanding in this Agreement in Stockholder’s capacity as a director or officer of Predix or any of its subsidiaries, and nothing in this Agreement will limit or affect any actions or omissions taken by Stockholder in Stockholder’s capacity as a director or officer of Predix or any of its subsidiaries including in exercising rights under the Merger Agreement, and no such actions or omissions shall be deemed a breach of this Agreement.
	9.     Entire Agreement. This Agreement supersedes all prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof and contains the entire agreement among the parties with respect to the subject matter hereof. This Agreement may not be amended or supplemented, and no provisions hereof may be modified or waived, except by an instrument in writing signed by all the parties hereto. No waiver of any provisions hereof by any party shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver be deemed a continuing waiver of any provision hereof by such party.
	10.     Notices. All notices, requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally, upon receipt of a transmission confirmation if sent by telecopy, facsimile or like transmission and on the next business day when sent by Federal Express, Express Mail or other reputable overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

	EPIX Pharmaceuticals, Inc.
	161 First Street
	Cambridge, MA 02142
	Attention: Chief Executive Officer
	Facsimile No.: (617) 250-6031

	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
	One Financial Center
	Boston, MA 02111
	Attention: William T. Whelan, Esq.
	Facsimile No.: (617) 542-2241

	To the address or facsimile number set forth for Stockholder on the
	signature page hereof.

	Goodwin Procter LLP
	Exchange Place
	53 State Street
	Boston, MA 02109
	Attn.: Lawrence S. Wittenberg, Esq.
	Facsimile No.: (617) 523-1231

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	(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of the courts of the Commonwealth of Massachusetts and the Federal courts of the United States of America, in each case, located in the City of Boston, Massachusetts solely in respect of the interpretation and enforcement of the provisions of this Agreement and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such courts. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 10 hereof or in such other manner as may be permitted by law shall be valid and sufficient service thereof.
	EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11(a).
	(b) If any provision of this Agreement or the application of such provision to any person or circumstances shall be held invalid or unenforceable by a court of competent jurisdiction, such provision or application shall be unenforceable only to the extent of such invalidity or unenforceability and the remainder of the provision held invalid or unenforceable and the application of such provision to persons or circumstances, other than the party as to which it is held invalid, and the remainder of this Agreement, shall not be affected.
	(c) This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.
	(d) This Agreement and all proxies and powers of attorney granted or provided pursuant hereto shall terminate upon the earliest to occur of (i) the Effective Time (as defined in the Merger Agreement) or (ii) the date on which the Merger Agreement is terminated in accordance with its terms.
	(e) Each party hereto shall execute and deliver such additional documents as may be necessary or desirable to effect the transactions contemplated by this Agreement.
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	this Agreement, and no construction or reference shall be derived therefrom.
	(g) The obligations of Stockholder set forth in this Agreement shall not be effective or binding upon Stockholder until after such time as the Merger Agreement is executed and delivered by Predix, EPIX and Merger Sub, and the parties agree that there is not and has not been any other agreement, arrangement or understanding between the parties hereto with respect to the matters set forth herein.
	(h) No party to this Agreement may assign any of its right or obligations under this Agreement without the prior written consent of the other party hereto, except that EPIX may assign its rights and obligations hereunder to any of its direct or indirect wholly-owned subsidiaries (including Merger Sub). Any assignment contrary to the provisions of this Section 11(h) shall be null and void.

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	EPIX PHARMACEUTICALS, INC.

	By:

	Name: Michael J. Astrue
	Title:   Chief Executive Officer
	STOCKHOLDER
	CADUCEUS PRIVATE INVESTMENT, L.P.

	By:

	Name:
	Title:
	Address:
	No. of Shares Held

	Under Options:

	No. of Shares Held

	Under Warrants:

	No. of Shares Beneficially
	Beneficially Owned:

	Common:
	Preferred:

By:

Title:	President and CEO

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1.	Second Amended and Restated Stockholders Agreement by and among Predix and certain Stockholders dated as of January 21, 2005.
2.	Co-Sale Agreement by and among Takhus, Inc. and certain Stockholders dated October 12, 1995, as amended.
3.	Form of Incentive Stock Option Agreement granted under Predix’s 2003 Stock Incentive Plan.
4.	Form of Nonstatutory Stock Option Agreement granted under Predix’s 2003 Stock Incentive Plan.
5.	Form of Restricted Stock Agreement granted under Predix’s 2003 Stock Incentive Plan.

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	Very truly yours,
	/s/ David S. Schechner

	David S. Schechner
	Managing Director

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	(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title.
	(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except:

	a Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
	b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders;
	c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or
	d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.

	(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

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	(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
	(2) If the merger or consolidation was approved pursuant to § 228 or § 253 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the

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	effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

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Item 21.	Exhibits and Financial Statement Schedules.

Number				Description
	2	.1		Agreement and Plan of Merger, dated as of April 3, 2006, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 10, 2006, among EPIX Pharmaceuticals, Inc., EPIX Delaware, Inc. and Predix Pharmaceuticals Holdings, Inc. (included as Annex A to the joint proxy statement/ prospectus). Note: As permitted by Item 601(b)(2) of Regulation S-K, certain schedules to this agreement have not been filed herewith. EPIX Pharmaceuticals, Inc. will furnish supplementally a copy of any omitted schedule to the Commission upon request.
	3	.1@		Restated Certificate of Incorporation of EPIX Pharmaceuticals Inc. Filed as Exhibit 4.1 to EPIX Pharmaceuticals Inc.’s Registration Statement on Form S-8 (File No. 333-30531) and incorporated herein by reference.
	3	.2@		Certificate of Amendment of Restated Certificate of Incorporation of EPIX Pharmaceuticals Inc. Filed as Exhibit 3.2 to EPIX Pharmaceuticals Inc.’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 000-21863) and incorporated herein by reference.
	3	.3@		Certificate of Amendment of Restated Certificate of Incorporation of EPIX Pharmaceuticals Inc. Filed as Exhibit 3.2 to EPIX Pharmaceuticals Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2004 (File No. 000-21863) and incorporated herein by reference.
	3	.4@		Form of Amended and Restated By-Laws of EPIX Pharmaceuticals Inc. Filed as Exhibit 4.2 to EPIX Pharmaceuticals Inc.’s Registration Statement on Form S-8 (File No. 333-30531) and incorporated herein by reference.
	4	.1@		Specimen certificate for shares of Common Stock of EPIX Pharmaceuticals Inc. Filed as Exhibit 4.1 to EPIX Pharmaceuticals Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	4	.2@		Indenture, dated as of June 7, 2004, between EPIX Pharmaceuticals, Inc. and U.S. Bank National Association as Trustee, relating to 3% Convertible Senior Notes due June 15, 2024. Filed as Exhibit 4.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 7, 2004 (File No. 000-21863) and incorporated herein by reference.
	5	.1***		Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding the legality of the securities.
	8	.1***		Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding tax matters.
	8	.2***		Opinion of Goodwin Procter LLP regarding tax matters.

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Number				Description
	10	.1@+		Amended and Restated License Agreement between EPIX Pharmaceuticals, Inc. and The General Hospital Corporation dated July 10, 1995. Filed as Exhibit 10.14 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	10	.2@#		Amended and Restated 1992 Equity Incentive Plan. Filed as Appendix A to EPIX Pharmaceuticals, Inc.’s 2003 Definitive Proxy Statement on Schedule 14A (File No. 000-21863) and incorporated herein by reference.
	10	.3@#		Form of Incentive Stock Option Certificate. Filed as Exhibit 10.29 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	10	.4@#		Form of Nonstatutory Stock Option Certificate. Filed as Exhibit 10.30 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	10	.5@#		Amended and Restated 1996 Director Stock Option Plan. Filed as Appendix B to EPIX Pharmaceuticals, Inc.’s 2003 Definitive Proxy Statement on Schedule 14A (File No. 000-21863) and incorporated herein by reference.
	10	.6@#		Amended and Restated 1996 Employee Stock Purchase Plan. Filed as Appendix C to EPIX Pharmaceuticals, Inc.’s 2003 Definitive Proxy Statement on Schedule 14A (File No. 000-21863) and incorporated herein by reference.
	10	.7@		Short Form Lease from Trustees of the Cambridge Trust to EPIX Pharmaceuticals, Inc. with a commencement date of January 1, 1998. Filed as Exhibit 10.39 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-38399) and incorporated herein by reference.
	10	.8@		First Amendment dated February 8, 1999 to the Short Form Lease dated as of July 7, 1998 with a commencement date as of January 1, 1998 between EPIX Pharmaceuticals, Inc. and the Trustees of The Cambridge East Trust. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 1999 (File No. 000-21863) and incorporated herein by reference.
	10	.9@		Second Amendment dated June 30, 2000 to the Short Form Lease dated as of July 7, 1998 with a commencement date as of January 1, 1998 between EPIX Pharmaceuticals, Inc. and the Trustees of The Cambridge East Trust. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2000 and incorporated herein by reference.
	10	.10@++		Amended and Restated Strategic Collaboration Agreement dated June 9, 2000, among EPIX Pharmaceuticals, Inc., Tyco/Mallinckrodt Inc. (a Delaware corporation) and Tyco/Mallinckrodt Inc. (a New York corporation). Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.11@++		Strategic Collaboration Agreement dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Aktiengesellschaft. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.12@		Stock Purchase Agreement, dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Berlin Venture Corporation. Filed as Exhibit 10.3 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.13@		Standstill Agreement, dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Berlin Venture Corporation. Filed as Exhibit 10.4 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.

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Number				Description
	10	.14@++		Reacquisition Agreement dated December 22, 2000 between EPIX Pharmaceuticals, Inc. and Daiichi Radioisotope Laboratories, Ltd. Filed as Exhibit 10.32 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.15@		Amendment No. 1 dated as of December 22, 2000 to the Strategic Collaboration Agreement, dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Aktiengesellschaft. Filed as Exhibit 10.33 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.16@++		Worldwide License Agreement, dated as of September 25, 2001, by and between EPIX Pharmaceuticals, Inc. and Bracco Imaging S.p.A. filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated September 25, 2001 (File No. 000-21863) and incorporated herein by reference.
	10	.17@		Settlement and Release Agreement dated as of September 25, 2001, by and between EPIX Pharmaceuticals, Inc. and Bracco Imaging S.p.A. filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated September 25, 2001 (File No. 000-21863) and incorporated herein by reference.
	10	.18@		Third Amendment, dated May 21, 2002, to the Short Form Lease dated as July 7, 1998 with a commencement date as of January 1, 1998 between EPIX Pharmaceuticals, Inc. and the Trustees of the Cambridge East Trust. Filed as an Exhibit 10.31 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2002 (File No. 000-21863) and incorporated herein by reference.
	10	.19@++		Thrombus Development Agreement between EPIX Pharmaceuticals, Inc. and Schering AG, dated as of May 26, 2003. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.20@++		Collaborative Research Agreement between EPIX Pharmaceuticals, Inc. and Schering AG, dated as of May 26, 2003. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.21@++		Lease of premises at 161 First Street, Cambridge, Massachusetts from BHX, LLC, as Trustee of First Binney Realty Trust to EPIX Pharmaceuticals, Inc., dated as of September 30, 2003 and executed on October 10, 2003. Filed as Exhibit 10.22 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.22@		Intellectual Property Agreement by and between EPIX Pharmaceuticals, Inc. and Dr. Martin R. Prince, dated November 17, 2003. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated November 18, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.23@++		Stock Purchase Agreement by and between EPIX Pharmaceuticals, Inc. and Dr. Martin R. Prince, dated as of November 17, 2003. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated November 18, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.24@++		First Amendment dated October 8, 2004 to the Short Form Lease dated as of September 30, 2003 with a commencement date as of November 1, 2003 between EPIX Pharmaceuticals, Inc. and the BHX, LLC, as Trustees of First Binney Realty Trust. Filed as Exhibit 10.22 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 000-21863) and incorporated by reference.
	10	.25@#		Director Compensation Arrangements. Filed as Exhibit 10.27 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-21863) and incorporated herein by reference.

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Number				Description
	10	.26@#		Named Executive Officer Compensation Arrangements. Filed with EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated February 16, 2006 (File No. 000-21863) and incorporated herein by reference.
	10	.27@#		Form of Indemnification Agreement. Filed as Exhibit 10.27 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-21863) and incorporated herein by reference.
	10	.28@#		Form of Amendment to Stock Option Agreement. Filed as Exhibit 10.30 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-21863) and incorporated herein by reference.
	10	.29@#		Amendment to the Collaborative Research Agreement dated as of May 26, 2003, between EPIX Pharmaceuticals, Inc. and Schering Aktiengesellschaft, dated September 30, 2005. Filed as Exhibit 99.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated October 7, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.30@#		Employment Agreement between EPIX Pharmaceuticals, Inc. and Michael J. Astrue, dated September 21, 2005. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.31@#		Severance Agreement between EPIX Pharmaceuticals, Inc. and Andrew Uprichard, M.D., dated September 14, 2005. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.32@#		Separation Agreement between EPIX Pharmaceuticals, Inc. and Michael D. Webb, dated September 14, 2005. Filed as Exhibit 10.4 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.33		Form of Voting Agreement between EPIX Pharmaceuticals, Inc. and certain stockholders of Predix Pharmaceuticals Holdings, Inc. (included as Annex B to the joint proxy statement/ prospectus).
	10	.34@		Consulting Agreement by and between EPIX Pharmaceuticals, Inc. and Michael J. Astrue, dated May 5, 2006. Filed as Exhibit 99.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated May 8, 2006 (File No. 000-21863) and incorporated herein by reference.
	10	.35@		Amendment to Severance and Incentive Agreement by and between EPIX Pharmaceuticals, Inc. and Andrew Uprichard, M.D., dated May 19, 2006. Filed as Exhibit 99.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K filed May 24, 2006 (File No. 000-21863) and incorporated herein by reference.
	21	.1**		Subsidiaries of EPIX Pharmaceuticals, Inc.
	23	.1*		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm of EPIX Pharmaceuticals, Inc.
	23	.2*		Consent of Ernst & Young LLP, Independent Auditors of Predix Pharmaceuticals Holdings, Inc.
	23	.3***		Consents of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in the opinions filed as Exhibit 5.1 and Exhibit 8.1 to this Registration Statement).
	23	.4***		Consent of Goodwin Procter LLP (included in the opinion filed as Exhibit 8.2 to this Registration Statement).
	24	.1**		Power of Attorney.
	24	.2****		Power of Attorney.
	99	.1		Fairness Opinion of Needham & Company, LLC, dated March 30, 2006 (included as Annex C to the joint proxy statement/ prospectus).
	99	.2**		Consent of Needham & Company, LLC.
	99	.3*		Form of EPIX Pharmaceuticals, Inc. Proxy Card.
	99	.4*		Form of Predix Pharmaceuticals Holdings, Inc. Proxy Card.

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Number				Description
	99	.5***		Consent of Patrick J. Fortune to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.6***		Consent of Frederick Frank to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.7***		Consent of Michael G. Kauffman to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.8***		Consent of Ian F. Smith to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.9*		Consent of Robert J. Perez to serve as a director of EPIX Pharmaceuticals, Inc.

	@	Incorporated by reference as indicated.

	*	Filed herewith.

	**	Previously filed with the initial filing of this Registration Statement on Form S-4 on April 25, 2006.

	***	Previously filed with Amendment No. 1 to this Registration Statement on Form S-4 on June 2, 2006.

****	Previously filed with Amendment No. 2 to this Registration Statement on Form S-4 on June 27, 2006.

	#	Identifies a management contract or compensatory plan or agreement in which an executive officer or director of EPIX Pharmaceuticals, Inc. participates.
	+	Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

	++	Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Item 22.	Undertakings.

	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i) To include any prospectus required by Section 10(a) (3) of the Securities Act of 1933;
	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

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	(4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
	(5) That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form;
	(6) That every prospectus (i) that is filed pursuant to paragraph (5) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
	(7) To respond to requests for information that is incorporated by reference into the joint proxy statement/ prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request; and
	(8) To supply by means of a post-effective amendment all information concerning a transaction, and EPIX being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

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	EPIX PHARMACEUTICALS, INC.

	By:	/s/ Andrew C.G. Uprichard, M.D.

	Andrew C.G. Uprichard, M.D.
	President and Chief Operating Officer

Signature				Title(s)
/s/ Andrew C.G. Uprichard, M.D.   Andrew C.G. Uprichard, M.D.				President and Chief Operating Officer (Principal Executive Officer)
/s/ Robert Pelletier   Robert Pelletier, CPA				Executive Director of Finance (Principal Accounting Officer)
*   Christopher F.O. Gabrieli				Chairman of the Board of Directors
*   Mark Leuchtenberger				Director
*   Gregory D. Phelps				Director
*   Peter Wirth, Esq.				Director
*   Michael Gilman, Ph.D.				Director
*		/s/ Robert Pelletier   Attorney-in-fact

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Number				Description
	2	.1		Agreement and Plan of Merger, dated as of April 3, 2006, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 10, 2006, among EPIX Pharmaceuticals, Inc., EPIX Delaware, Inc. and Predix Pharmaceuticals Holdings, Inc. (included as Annex A to the joint proxy statement/ prospectus). Note: As permitted by Item 601(b)(2) of Regulation S-K, certain schedules to this agreement have not been filed herewith. EPIX Pharmaceuticals, Inc. will furnish supplementally a copy of any omitted schedule to the Commission upon request.
	3	.1@		Restated Certificate of Incorporation of EPIX Pharmaceuticals, Inc. Filed as Exhibit 4.1 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-8 (File No. 333-30531) and incorporated herein by reference.
	3	.2@		Certificate of Amendment of Restated Certificate of Incorporation of EPIX Pharmaceuticals, Inc. Filed as Exhibit 3.2 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 000-21863) and incorporated herein by reference.
	3	.3@		Certificate of Amendment of Restated Certificate of Incorporation of EPIX Pharmaceuticals, Inc. Filed as Exhibit 3.2 to EPIX Pharmaceuticals, Inc’s Quarterly Report on Form 10-Q for the period ended September 30, 2004 (File No. 000-21863) and incorporated herein by reference.
	3	.4@		Form of Amended and Restated By-Laws of EPIX Pharmaceuticals, Inc. Filed as Exhibit 4.2 to EPIX Pharmaceuticals, Inc’s. Registration Statement on Form S-8 (File No. 333-30531) and incorporated herein by reference.
	4	.1@		Specimen certificate for shares of Common Stock of EPIX Pharmaceuticals, Inc. Filed as Exhibit 4.1 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	4	.2@		Indenture, dated as of June 7, 2004, between EPIX Pharmaceuticals, Inc. and U.S. Bank National Association as Trustee, relating to 3% Convertible Senior Notes due June 15, 2024. Filed as Exhibit 4.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 7, 2004 (File No. 000-21863) and incorporated herein by reference.
	5	.1***		Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding the legality of the securities.
	8	.1***		Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding tax matters.
	8	.2***		Opinion of Goodwin Procter LLP regarding tax matters.
	10	.1@+		Amended and Restated License Agreement between EPIX Pharmaceuticals, Inc. and The General Hospital Corporation dated July 10, 1995. Filed as Exhibit 10.14 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	10	.2@#		Amended and Restated 1992 Equity Incentive Plan. Filed as Appendix A to EPIX Pharmaceuticals, Inc.’s 2003 Definitive Proxy Statement on Schedule 14A (File No. 000-21863) and incorporated herein by reference.
	10	.3@#		Form of Incentive Stock Option Certificate. Filed as Exhibit 10.29 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	10	.4@#		Form of Nonstatutory Stock Option Certificate. Filed as Exhibit 10.30 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-17581) and incorporated herein by reference.
	10	.5@#		Amended and Restated 1996 Director Stock Option Plan. Filed as Appendix B to EPIX Pharmaceuticals, Inc.’s 2003 Definitive Proxy Statement on Schedule 14A (File No. 000-21863) and incorporated herein by reference.
	10	.6@#		Amended and Restated 1996 Employee Stock Purchase Plan. Filed as Appendix C to EPIX Pharmaceuticals, Inc.’s 2003 Definitive Proxy Statement on Schedule 14A (File No. 000-21863) and incorporated herein by reference.

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Table of Contents

Number				Description
	10	.7@		Short Form Lease from Trustees of the Cambridge Trust to EPIX Pharmaceuticals, Inc. with a commencement date of January 1, 1998. Filed as Exhibit 10.39 to EPIX Pharmaceuticals, Inc.’s Registration Statement on Form S-1 (File No. 333-38399) and incorporated herein by reference.
	10	.8@		First Amendment dated February 8, 1999 to the Short Form Lease dated as of July 7, 1998 with a commencement date as of January 1, 1998 between EPIX Pharmaceuticals, Inc. and the Trustees of The Cambridge East Trust. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 1999 (File No. 000-21863) and incorporated herein by reference.
	10	.9@		Second Amendment dated June 30, 2000 to the Short Form Lease dated as of July 7, 1998 with a commencement date as of January 1, 1998 between EPIX Pharmaceuticals, Inc. and the Trustees of The Cambridge East Trust. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2000 and incorporated herein by reference.
	10	.10@++		Amended and Restated Strategic Collaboration Agreement dated June 9, 2000, among EPIX Pharmaceuticals, Inc., Tyco/ Mallinckrodt Inc. (a Delaware corporation) and Tyco/ Mallinckrodt Inc. (a New York corporation). Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.11@++		Strategic Collaboration Agreement dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Aktiengesellschaft. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.12@		Stock Purchase Agreement, dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Berlin Venture Corporation. Filed as Exhibit 10.3 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.13@		Standstill Agreement, dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Berlin Venture Corporation. Filed as Exhibit 10.4 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated June 29, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.14@++		Reacquisition Agreement dated December 22, 2000 between EPIX Pharmaceuticals, Inc. and Daiichi Radioisotope Laboratories, Ltd. Filed as Exhibit 10.32 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.15@		Amendment No. 1 dated as of December 22, 2000 to the Strategic Collaboration Agreement, dated as of June 9, 2000, between EPIX Pharmaceuticals, Inc. and Schering Aktiengesellschaft. Filed as Exhibit 10.33 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2000 (File No. 000-21863) and incorporated herein by reference.
	10	.16@++		Worldwide License Agreement, dated as of September 25, 2001, by and between EPIX Pharmaceuticals, Inc. and Bracco Imaging S.p.A. filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated September 25, 2001 (File No. 000-21863) and incorporated herein by reference.
	10	.17@		Settlement and Release Agreement dated as of September 25, 2001, by and between EPIX Pharmaceuticals, Inc. and Bracco Imaging S.p.A. filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated September 25, 2001 (File No. 000-21863) and incorporated herein by reference.
	10	.18@		Third Amendment, dated May 21, 2002, to the Short Form Lease dated as July 7, 1998 with a commencement date as of January 1, 1998 between EPIX Pharmaceuticals, Inc. and the Trustees of the Cambridge East Trust. Filed as an Exhibit 10.31 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2002 (File No. 000-21863) and incorporated herein by reference.

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Table of Contents

Number				Description
	10	.19@++		Thrombus Development Agreement between EPIX Pharmaceuticals, Inc. and Schering AG, dated as of May 26, 2003. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.20@++		Collaborative Research Agreement between EPIX Pharmaceuticals, Inc. and Schering AG, dated as of May 26, 2003. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.21@++		Lease of premises at 161 First Street, Cambridge, Massachusetts from BHX, LLC, as Trustee of First Binney Realty Trust to EPIX Pharmaceuticals, Inc., dated as of September 30, 2003 and executed on October 10, 2003. Filed as Exhibit 10.22 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.22@		Intellectual Property Agreement by and between EPIX Pharmaceuticals, Inc. and Dr. Martin R. Prince, dated November 17, 2003. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated November 18, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.23@++		Stock Purchase Agreement by and between EPIX Pharmaceuticals, Inc. and Dr. Martin R. Prince, dated as of November 17, 2003. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated November 18, 2003 (File No. 000-21863) and incorporated herein by reference.
	10	.24@++		First Amendment dated October 8, 2004 to the Short Form Lease dated as of September 30, 2003 with a commencement date as of November 1, 2003 between EPIX Pharmaceuticals, Inc. and the BHX, LLC, as Trustees of First Binney Realty Trust. Filed as Exhibit 10.22 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 000-21863) and incorporated by reference.
	10	.25@#		Director Compensation Arrangements. Filed as Exhibit 10.27 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-21863) and incorporated herein by reference.
	10	.26@#		Named Executive Officer Compensation Arrangements. Filed with EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated February 16, 2006 (File No. 000-21863) and incorporated herein by reference.
	10	.27@#		Form of Indemnification Agreement. Filed as Exhibit 10.27 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-21863) and incorporated herein by reference.
	10	.28@#		Form of Amendment to Stock Option Agreement. Filed as Exhibit 10.30 to EPIX Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-21863) and incorporated herein by reference.
	10	.29@#		Amendment to the Collaborative Research Agreement dated as of May 26, 2003, between EPIX Pharmaceuticals, Inc. and Schering Aktiengesellschaft, dated September 30, 2005. Filed as Exhibit 99.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated October 7, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.30@#		Employment Agreement between EPIX Pharmaceuticals, Inc. and Michael J. Astrue, dated September 21, 2005. Filed as Exhibit 10.1 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.31@#		Severance Agreement between EPIX Pharmaceuticals, Inc. and Andrew Uprichard, M.D., dated September 14, 2005. Filed as Exhibit 10.2 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 000-21863) and incorporated herein by reference.
	10	.32@#		Separation Agreement between EPIX Pharmaceuticals, Inc. and Michael D. Webb, dated September 14, 2005. Filed as Exhibit 10.4 to EPIX Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 000-21863) and incorporated herein by reference.

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Table of Contents

Number				Description
	10	.33		Form of Voting Agreement between EPIX Pharmaceuticals, Inc. and certain stockholders of Predix Pharmaceuticals Holdings, Inc. (included as Annex B to the joint proxy statement/ prospectus).
	10	.34@		Consulting Agreement by and between EPIX Pharmaceuticals, Inc. and Michael J. Astrue, dated May 5, 2006. Filed as Exhibit 99.2 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K dated May 8, 2006 (File No. 000-21863) and incorporated herein by reference.
	10	.35@		Amendment to Severance and Incentive Agreement by and between EPIX Pharmaceuticals, Inc. and Andrew Uprichard, M.D., dated May 19, 2006. Filed as Exhibit 99.1 to EPIX Pharmaceuticals, Inc.’s Current Report on Form 8-K filed May 24, 2006 (File No. 000-21863) and incorporated herein by reference.
	21	.1**		Subsidiaries of EPIX Pharmaceuticals, Inc.
	23	.1*		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm of EPIX Pharmaceuticals, Inc.
	23	.2*		Consent of Ernst & Young LLP, Independent Auditors of Predix Pharmaceuticals Holdings, Inc.
	23	.3***		Consents of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in the opinions filed as Exhibit 5.1 and Exhibit 8.1 to this Registration Statement).
	23	.4***		Consent of Goodwin Procter LLP (included in the opinion filed as Exhibit 8.2 to this Registration Statement).
	24	.1**		Power of Attorney.
	24	.2****		Power of Attorney.
	99	.1		Fairness Opinion of Needham & Company, LLC, dated March 30, 2006 (included as Annex C to the joint proxy statement/ prospectus).
	99	.2**		Consent of Needham & Company, LLC.
	99	.3*		Form of EPIX Pharmaceuticals, Inc. Proxy Card.
	99	.4*		Form of Predix Pharmaceuticals Holdings, Inc. Proxy Card.
	99	.5***		Consent of Patrick J. Fortune to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.6***		Consent of Frederick Frank to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.7***		Consent of Michael G. Kauffman to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.8***		Consent of Ian F. Smith to serve as a director of EPIX Pharmaceuticals, Inc.
	99	.9*		Consent of Robert J. Perez to serve as a director of EPIX Pharmaceuticals, Inc.

@	Incorporated by reference as indicated.
*	Filed herewith.
**	Previously filed with the initial filing of this Registration Statement on Form S-4 on April 25, 2006.
***	Previously filed with Amendment No. 1 to this Registration Statement on Form S-4 on June 2, 2006.
****	Previously filed with Amendment No. 2 to this Registration Statement on Form S-4 on June 27, 2006.

#	Identifies a management contract or compensatory plan or agreement in which an executive officer or director of EPIX Pharmaceuticals, Inc. participates.
+	Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

++	Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.