Operating Expenses

Research and development expenses for the quarter and six months ended June 30, 2012, were $51.6 million and $100.5 million, respectively, as compared to $46.0 million and $82.3 million, respectively, for the same periods in 2011. Included in research and development expenses for the quarter and six months ended June 30, 2012, were non-cash expenses of $6.5 million and $13.2 million, respectively, related to the impact of expensing employee stock options, as compared to $4.8 million and $9.2 million, respectively, for the same periods in 2011.

The increases in research and development expenses for the quarter and six months ended June 30, 2012, compared to the prior year period were primarily a result of increased clinical development costs related to the advancement of the Company's pipeline and increased non-cash employee stock option expense. The Company expects its research and development expenses to vary from period to period, mainly due to the timing of its clinical development activities.

Selling, general and administrative expenses for the quarter and six months ended June 30, 2012, were $19.7 million and $41.1 million, respectively, as compared to $11.9 million and $22.7 million for the same periods in 2011. Included in selling, general and administrative expenses for the quarter and six months ended June 30, 2012, were non-cash expenses of $3.4 million and $6.6 million, respectively, related to the impact of expensing employee stock options, as compared to $2.4 million and $4.9 million, respectively, for the same periods in 2011.

Increased selling, general and administrative expenses for the quarter and six months ended June 30, 2012, compared to the prior year periods reflected the additional costs related to the Company's sales force and the commercialization efforts for the launch of Jakafi.

Interest Expense

Interest expense for the quarter and six months ended June 30, 2012, were $11.4 million and $22.7 million, respectively, as compared to $10.9 million and $21.6 million, respectively, for the comparable periods in 2011. Included in interest expense for the quarter and six months ended June 30, 2012, were $6.7 million and $13.2 million, respectively, of non-cash charges to amortize the discount on the Company's 4.75% Convertible Senior Notes due 2015, as compared to $6.1 million and $12.1 million, respectively, for the same periods in 2011.

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