In July 2007, the Company announced preliminary data on the efficacy and safety of XIAFLEX (clostridial collagenase for injection), formerly referred to as AA4500, from the phase III studies for the treatment of Dupuytren’s contracture that were suspended in December 2006 due to a manufacturing issue. The data indicate that patients injected with XIAFLEX achieved clinical success, defined as a reduction of joint contracture to within five degrees of normal, at rates consistent with those reported in previous clinical studies. No patient receiving placebo experienced clinical success. In addition, adverse events also were similar to those from previous clinical studies. The vast majority of patients received only one dose of either XIAFLEX or placebo.

In August 2007, the Company received clearance from the U.S. Food and Drug Administration (FDA) to resume its phase III clinical trials for XIAFLEX in the treatment of Dupuytren’s contracture.

In September 2007, the Company dosed the first patients in its second U.S. phase III pivotal trial (CORD I) and its Australian phase III study (CORD II) of XIAFLEX for the treatment of Dupuytren’s contracture.

In December 2007, the Company completed patient enrollment in CORD I and CORD II, exceeding its enrollment targets in both studies, with greater than 300 patients enrolled in the two studies combined.

In 2008, the Company intends to explore partnering opportunities for XIAFLEX in Europe as part of its ongoing evaluation of options to maximize the product’s potential in Europe.

Net revenues were up 40% over the prior year to $95.7 million.

Total prescriptions for the testosterone replacement gel market segment grew 17.7% in 2007 according to National Prescription Audit (NPA) data from IMS Health, Inc. (IMS), a leading market research firm.

Testim prescriptions grew by 35.2% in 2007 according to NPA data from IMS.

In December 2007, Testim’s market share of the gel segment reached a record 21.5% versus 18.2% in December 2006 according to IMS.

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In May 2007, the Company announced new data from a retrospective study, which was not funded by Auxilium, showing that total testosterone levels increased significantly in patients who switched to Testim following suboptimal response to Solvay S.A.’s Androgel^® (testosterone gel) 1%. Conversely, men who switched from Testim to Androgel following suboptimal response to Testim did not show an appreciable rise in total testosterone levels.

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On January 22, 2008, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,320,968 covering Testim^®, which the Company licenses from Bentley Pharmaceuticals, Inc. The patent expires in January 2025 and has been listed in Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book), published by the FDA.

In 2007, the Company continued to build out its management team with seasoned executives.

Mr. Roger Graham, Jr. assumed the newly created position of Executive Vice President, Sales and Marketing;

Mr. Scott Wilhoit joined as Vice President, Managed Markets;

Mr. Robert Dufour joined as Vice President, Marketing; and

Ms. Nancy Fetrow assumed the newly created role of Vice President, Project Management.

In January 2008, Dr. Anthony DelConte joined Auxilium in the newly created role of Chief Medical Officer responsible for all clinical and preclinical development and medical affairs. Prior to joining Auxilium, Dr. DelConte was Senior Vice President, Clinical Research & Development at Genaera Corporation. He served as Senior Medical Director of U.S. Clinical Development & Medical Affairs at Novartis Pharmaceuticals from 2003 until 2006. Dr. DelConte held various positions of increasing responsibility at Wyeth Pharmaceuticals from 1995 to 2003. Prior to joining Wyeth he was a member of the full time faculty in the Department of Obstetrics and Gynecology at Jefferson Medical College. Dr. DelConte attended Saint Joseph’s University and received his medical degree from the University of Pittsburgh School of Medicine. He completed residency training at Magee-Womens Hospital of the University Health Center of Pittsburgh. Dr. DelConte is a fellow of the American College of Obstetricians & Gynecologists and is a Diplomat of the American Board of Obstetrics and Gynecology.

In 2007, the Company added manufacturing, clinical development and senior operational expertise to its Board of Directors with the addition of Dr. Renato Fuchs and Dr. Dennis Langer.

In June 2007, the Company announced the sale of 3.672 million shares of common stock resulting in $49.9 million in net proceeds.

In 2007, the Company was named “Life Sciences Company of the Year” by the Eastern Technology Council. The Company also was named a “Rising Star” in the Deloitte & Touche USA LLP 2007 Technology Fast 50 Program for the Greater Philadelphia area, a ranking of the region’s 50 fastest growing technology and life sciences companies by percentage revenue growth. Auxilium also was named as a finalist in the “10 Best Places to Work” in the greater Philadelphia area by Philadelphia Business Journal.

net revenues will be in the range of $120 million to $125 million;

research and development spending will be in the range of $52 million to $56 million, which includes $2 million to $3 million of stock-based compensation cost;

selling, general and administrative expenses will be in the range of $88 million to $92 million, which includes $7 million to $8 million of stock-based compensation cost;

net loss will be in the range of $44 million to $48 million; and

total stock-based compensation expense will be in the range of $9 million to $11 million.

release top-line results from the double-blind phase III clinical trials for XIAFLEX for the treatment of Dupuytren’s contracture in the second quarter of 2008;

initiate a phase IIb dose ranging study for XIAFLEX for the treatment of Peyronie’s disease in the second quarter of 2008, pending FDA review of animal study results; and

file the Biologics License Application for approval of XIAFLEX for the treatment of Dupuytren’s contracture by FDA in early 2009.

Auxilium’s expected financial performance during 2008 and the financial milestones that it may achieve for 2008, including 2008 net revenues, research and development spending, selling, general and administrative expenses, and net loss;

the timing of the release of results from phase III clinical trials for XIAFLEX for the treatment of Dupuytren’s contracture;

the commencement of a phase IIb dose ranging study for XIAFLEX for the treatment of Peyronie’s disease;

FDA review of animal study results for XIAFLEX;

the filing of the Biologics License Application for approval of XIAFLEX for the treatment of Dupuytren’s contracture;

the potential for XIAFLEX to be a Company transforming product;

the interpretation of clinical data;

the Company’s intention to explore partnering opportunities for XIAFLEX in Europe and the impact of such partnering opportunity, should it occur;

the protection for Testim afforded by U.S. Patent No. 7,320,968;

the impact of recent additions to the board and management team; and

the drivers of Testim sales and market share growth.

the success of research and development activities;

the performance of third-party manufacturers and suppliers;

decisions by regulatory authorities as to whether and when to approve drug applications;

decisions by regulatory authorities as to whether and when to proceed to the next phase of clinical trials;

difficulties or delays in manufacturing;

competition from currently marketed products, generic products, and new products;

legislative and regulatory action in the jurisdictions in which Auxilium markets or seeks to market its products;

claims and concerns that may arise regarding the safety or efficacy of its products; and

increase in costs or expenses.

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