UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant    x

Filed by a Party other than the Registrant    ¨

Check the appropriate box:

AUXILIUM PHARMACEUTICALS, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

(3)      Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

¨      Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

AUXILIUM PHARMACEUTICALS, INC.

160 West Germantown Pike

Norristown, Pennsylvania 19401

Dear Stockholder:

You are cordially invited to attend the 2005 Annual Meeting of Stockholders of Auxilium Pharmaceuticals, Inc. at 9:00 a.m., local time, on Wednesday, June 8, 2005, at The Desmond Hotel, One Liberty Boulevard, Malvern, Pennsylvania 19355.

The Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the formal business to be conducted at the meeting, and Proxy Card accompany this letter. The Company’s 2004 Annual Report to Stockholders is also enclosed for your information.

All stockholders are invited to attend the meeting. Whether or not you plan to attend the meeting, you are urged to vote by proxy by completing, signing and dating the enclosed Proxy Card and returning it as soon as possible in the enclosed envelope. No postage need be affixed if the enclosed envelope is mailed in the United States. Your stock will be voted in accordance with the instructions you have given in your Proxy Card.

Your shares cannot be voted unless you sign, date and return the enclosed Proxy Card or attend the meeting in person. Regardless of the number of shares you own, your careful consideration of, and vote on, the matters before the stockholders is important.

Thank you for your continued support.

Sincerely,

Gerri A. Henwood

Chief Executive Officer and Interim President

AUXILIUM PHARMACEUTICALS, INC.

160 West Germantown Pike

Norristown, Pennsylvania 19401

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 8, 2005

The Annual Meeting of Stockholders (the “Meeting”) of Auxilium Pharmaceuticals, Inc., a Delaware corporation (the “Company”), will be held at The Desmond Hotel, One Liberty Boulevard, Malvern, Pennsylvania 19355 on Wednesday, June 8, 2005, at 9:00 a.m., local time. The purpose of the Meeting shall be to consider and act upon the following matters:

The holders (the “Stockholders”) of the Company’s common stock of record at the close of business on April 14, 2005 (the “Record Date”), are entitled to notice of and to vote at the Meeting, or any adjournment or adjournments thereof. A complete list of such Stockholders will be open to the examination of any Stockholder at the Company’s principal executive offices at 160 West Germantown Pike, Norristown, Pennsylvania 19401 for a period of 10 days prior to the Meeting and at The Desmond Hotel, One Liberty Boulevard, Malvern, Pennsylvania 19355 on the day of the Meeting. The Meeting may be adjourned from time to time without notice other than by announcement at the Meeting; provided, however, if the adjournment is for more than 30 days after the date of the Meeting, or if after the adjournment a new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting is required to be given to each Stockholder.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE ENCLOSED ENVELOPE IS MAILED IN THE UNITED STATES. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY CARD SHOULD BE SIGNED AND RETURNED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.

By Order of the Board of Directors,

Jennifer Evans Stacey

Secretary

Norristown, Pennsylvania

April 28, 2005

AUXILIUM PHARMACEUTICALS, INC.

160 West Germantown Pike

Norristown, Pennsylvania 19401

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 8, 2005

TABLE OF CONTENTS

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ANNUAL MEETING OF STOCKHOLDERS

We have sent you this Proxy Statement and the enclosed Proxy Card because the Board of Directors of Auxilium Pharmaceuticals, Inc., (referred to herein as “Auxilium”, “we”, “us” or “our”) is soliciting your proxy to vote at our Annual Meeting of Stockholders to be held on Wednesday, June 8, 2005, (the “Meeting”) at The Desmond Hotel, One Liberty Boulevard, Malvern, Pennsylvania 19355, at 9:00 a.m., local time, and at any adjournment or adjournments thereof.

In addition to solicitations by mail, our directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, e-mail and personal interviews. All costs of solicitation of proxies will be borne by us. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting material to the owners of stock held in their names, and we will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of proxy materials.

We are mailing the Notice of Annual Meeting of Stockholders, this Proxy Statement and Proxy Card to our stockholders of record as of April 14, 2005 (the “Record Date”) for the first time on or about April 28, 2005. In this mailing, we are also including our Annual Report to Stockholders for the fiscal year ended December 31, 2004 (“Fiscal 2004”). In addition, we have provided brokers, dealers, banks, voting trustees and their nominees, at our expense, with additional copies of our Annual Report so that our record holders could supply these materials to our beneficial owners as of the Record Date.

Information About the Meeting

When is the Meeting?

The Meeting will be held at 9:00 a.m., local time, on Wednesday, June 8, 2005.

Where is the Meeting?

The Meeting will be held at The Desmond Hotel, One Liberty Boulevard, Malvern, Pennsylvania 19355.

What is the purpose of the Meeting?

At the Meeting, stockholders will act upon the matters listed in the Notice of Annual Meeting of Stockholders and any other matters that properly come before the Meeting.

Who can attend the Meeting?

All stockholders as of the Record Date, or their duly appointed proxies, may attend the Meeting. Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport. If you hold

your shares through a broker or other nominee, you must bring a copy of a brokerage statement reflecting your stock ownership as of the Record Date. Everyone must check in at the registration desk at the Meeting.

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What constitutes a quorum?

A quorum of stockholders is necessary to hold a valid meeting for the transaction of business. The presence at the Meeting, in person or by proxy, of the holders entitled to cast at least a majority of votes which all stockholders are entitled to cast as of the Record Date will constitute a quorum. Broker non-votes, abstentions and votes withheld count as shares present at the Meeting for purposes of a quorum. On the Record Date, there were 20,674,730 shares of our common stock outstanding.

What are the recommendations of the Board of Directors?

Unless you instruct otherwise on your Proxy Card, the persons named as proxy holders on the Proxy Card will vote in accordance with the recommendations of the Board of Directors. The Board’s recommendations are set forth below.

The proxy holders will vote in their own discretion with respect to any other matter that properly comes before the Meeting or any adjournments or postponements thereof.

Information About Voting

Who can vote at the Meeting?

All stockholders of record at the close of business on the Record Date, April 14, 2005, are entitled to vote at the Meeting and any adjournments or postponements of the Meeting.

What are the voting rights of the holders of the common stock?

Holders of our common stock will vote on all matters to be acted upon at the Meeting. Each outstanding share of common stock will be entitled to one vote on each matter to be voted upon at the Meeting.

How do I vote?

You may attend the Meeting and vote in person. Alternatively, you may vote your shares by proxy by mail. To vote by mail, simply complete, sign and date your Proxy Card and return it in the postage-paid envelope provided for receipt by us prior to June 8, 2005 (Proxy Cards received on or after June 8, 2005 will not be counted). Please note that by casting your vote by proxy you are authorizing the individuals listed on the Proxy Card to vote your shares in accordance with your instructions and in their discretion with respect to any other matter that properly comes before the Meeting.

If you want to vote in person at the Meeting and you hold Auxilium Pharmaceuticals, Inc. common stock in street name, you must obtain a Proxy Card from your broker and bring that Proxy Card to the Meeting, together with a copy of a brokerage statement reflecting your stock ownership as of the Record Date and valid picture identification, such as a driver’s license or passport.

Is my vote confidential?

Yes. Proxy Cards, ballots and voting tabulations that identify stockholders are kept confidential except in certain circumstances where it is important to protect the interests of Auxilium and its stockholders.

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What if I do not indicate my preference on the Proxy Card?

If you do not indicate how you would like your shares to be voted for a particular proposal, your shares will be voted (i) Proposal 1: Election of Directors—FOR ALL NOMINEES and (ii) Proposal 2: FOR the ratification of the selection by the Audit Committee of our Board of Directors of the firm KPMG LLP as our independent registered public accounting firm for Fiscal 2005. As to other matters as may properly come before the Meeting or any adjournments or postponements thereof, the persons named in the proxy will be authorized to vote upon such matters in their own discretion.

Can I change my vote after I return my Proxy Card?

Yes. Even after you have submitted your Proxy Card, you may change your vote at any time before the proxy is exercised by filing with the Secretary of Auxilium either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will be suspended if you attend the Meeting in person and request to recast your vote. Attendance at the Meeting will not, by itself, revoke a previously granted proxy. For information regarding how to vote in person, see “How do I vote?” on page 3.

What vote is required to approve each proposal?

Proposal 1: Election of Directors. The affirmative vote of a plurality of the votes cast at the Meeting is required for the election of directors, provided a quorum is present in person or by proxy. A plurality means that the seven nominees receiving the most votes for election to a director position are elected as directors. Votes that are withheld and broker non-votes will be excluded entirely from the vote to elect directors and have no effect. Thus, the seven candidates with the most affirmative votes will be elected at the Meeting.

Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm. The affirmative vote of a majority of the votes cast at the Meeting is required to ratify the selection by the Audit Committee of our Board of Directors of the firm KPMG LLP as the Company’s independent registered public accounting firm for Fiscal 2005, provided a quorum is present in person or by proxy. Abstentions will count in the tabulations of votes cast on this proposal and will have the effect of a vote against for purposes of determining whether the proposal is approved. Broker non-votes are not counted as votes cast or shares voting on this proposal and will have no effect on the voting on this proposal.

What is a broker non-vote?

A broker non-vote occurs when a broker submits a Proxy Card with respect to shares of common stock held in a fiduciary capacity (typically referred to as being held in “street name”), but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. Routine matters include the election of directors and ratification of auditors. Non-routine matters include matters such as amendments to stock plans. Therefore, if you do not give your broker or nominee specific instructions, your shares will not be voted on non-routine matters and may not be voted on routine matters. Shares represented by such “broker non-votes” will, however, be counted in determining whether there is a quorum.

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DISCUSSION OF PROPOSALS

Proposal 1: Election of Directors

At the Meeting, seven directors are to be elected to hold office until the next Annual Meeting of Stockholders after his or her election or until his or her resignation or removal. Our Board has fixed the number of directors at eight, and our Nominating and Governance Committee has retained, for a fee, a search firm to find an independent director with pharmaceutical operations experience.

The affirmative vote of a plurality of the votes cast at the Meeting is required for the election of directors. A plurality means that the seven nominees receiving the most votes for election to a director position are elected as directors. Votes may be cast (i) FOR ALL NOMINEES, (ii) WITHHOLD FOR ALL NOMINEES or (iii) FOR ALL NOMINEES except as noted by you on the appropriate portion of your Proxy Card. Votes that are withheld and broker non-votes will be excluded entirely from the vote to elect directors and have no effect. Thus, the seven candidates with the most FOR votes will be elected at the Meeting.

All of the nominees whose names and biographies appear below are at present our directors. In the event any of the nominees should become unavailable or unable to serve as a director, it is intended that votes will be cast for a substitute nominee designated by our Board of Directors. Our Board has no reason to believe that the nominees named will be unable to serve if elected. Each nominee has consented to being named in this Proxy Statement and to serve if elected.

The following are the nominees for election to our Board, and each of these nominees is a current member of our Board:

The principal occupations and business experience, for at least the past five years, of each director and nominee is as follows:

Rolf A. Classon was appointed as the Chairman of our Board of Directors in April 2005. He served as Vice Chairman from March 2005 to April 2005 and has served as one of our directors since May 2004. From October 2002 until July 2004, Mr. Classon was Chairman of the Executive Committee of Bayer HealthCare AG, a subsidiary of Bayer AG. Previously, he served as President of Bayer’s Diagnostic Division and head of Bayer’s Worldwide Business Group—Diagnostics since 1995. Mr. Classon is the Vice Chairman of the Board of Directors of Hillenbrand Industries, a director of Enzon Pharmaceuticals, Inc. and Chairman of the Compensation Committee and member of the Finance and Audit committee of Enzon Pharmaceuticals, Inc., and a director of Ista Pharmaceuticals, Inc. and a member of the Nominating Committee of Ista Pharmaceuticals, Inc. Mr. Classon received his Chemical Engineering Certificate from the Gothenburg School of Engineering and a Swedish equivalent to an M.B.A. from the University of Gothenburg.

Edwin A. Bescherer, Jr. has served as one of our directors since April 2004. Mr. Bescherer was also one of our directors from February 2000 to October 2003. From 1978 to 1995, Mr. Bescherer served in a variety of management positions at Dun & Bradstreet Corporation, including as Executive Vice President, Finance and

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Chief Financial Officer from 1987 to 1995, as Senior Vice President, Finance and Chief Financial Officer from 1982 to 1987, and as Vice President, Controller from 1978 to 1982. Mr. Bescherer holds a B.S. from Purdue University.

Philippe O. Chambon, M.D., Ph.D., has served as one of our directors since October 2003. Since May 1995, Dr. Chambon has been a General Partner of The Sprout Group, a private equity firm and venture capital affiliate of Credit Suisse First Boston, an investment bank (The Sprout Group is an affiliate of ours, see “Security Ownership of Certain Beneficial Owners and Management” beginning on page 25). He also serves as a director of PharSight Corporation. Dr. Chambon holds an M.D. and a Ph.D. from the University of Paris and an M.B.A. from Columbia University.

Winston J. Churchill has served as one of our directors since October 2000. Mr. Churchill has been the Managing General Partner of SCP Private Equity Partners II, L.P. since its inception (SCP Private Equity Partners II, L.P. is an affiliate of ours, see “Security Ownership of Certain Beneficial Owners and Management” beginning on page 25). Mr. Churchill also founded and serves as Chairman of C.I.P. Capital, L.P., a private equity fund. Prior to that, Mr. Churchill was a Managing Partner of Bradford Associates, which managed private equity funds on behalf of Bessemer Securities Corporation and Bessemer Trust Company, a private wealth management and investment advisory firm. Mr. Churchill serves as a director of Amkor Technology, Inc., Innovative Solutions and Support, Inc. and Griffin Land & Nurseries Inc. Mr. Churchill is also a trustee of Fordham University, Georgetown University and Immaculata University. Mr. Churchill holds a B.S. from Fordham University, an M.A. from Oxford University and a J.D. from Yale Law School.

Gerri A. Henwood is one of our founders and has served as our Chief Executive Officer since our inception, as our Interim President since March 2005, as the Chairman of our Board of Directors from our inception to April 2005 and as our President from our inception until June 2004. From 1985 to 1999, Ms. Henwood served as President and Chief Executive Officer of IBAH, Inc., a publicly traded contract research company, originally named Bio-Pharm Clinical Services, Inc., a company which she founded. Prior to that, Ms. Henwood served in a variety of marketing, medical and regulatory positions at Smith, Kline & French Laboratories, now GlaxoSmithKline plc, a publicly traded pharmaceutical company. Ms. Henwood serves as a director of Alkermes, Inc. She received a B.S. from Neuman College.

Dennis J. Purcell has served as one of our directors since October 2001. Since April 2000, Mr. Purcell has been a Senior Managing Partner of Perseus-Soros BioPharmaceutical Fund, LP, a firm that makes private equity investments in the life sciences industry (Perseus-Soros BioPharmaceutical Fund, LP. is an affiliate of ours, see “Security Ownership of Certain Beneficial Owners and Management” beginning on page 25). From August 1994 to January 2000, he served as Managing Director of Life Sciences Investment Banking at Chase H&Q, formerly Hambrecht & Quist LLC. Prior to that, Mr. Purcell was a Managing Director in the Healthcare Group at PaineWebber Incorporated, the investment banking, insurance and registered broker-dealer division of PaineWebber Group Inc. Mr. Purcell currently serves on the Bioethics Committee of the Biotechnology Industry Organization. He also currently serves as a director of Valentis, Inc. Mr. Purcell holds a B.S. in Economics and Accounting from the University of Delaware and an M.B.A. from Harvard University.

Michael Wall has served as one of our directors since October 2001. Mr. Wall is a founder of Alkermes, Inc. and has served as its Chairman of the Board since 1987. From April 1992 until June 1993, he served as a director and Chairman of the Executive Committee of Centocor, Inc., a biopharmaceutical company. From November 1987 to June 1993, he was Chairman Emeritus of Centocor, Inc. Mr. Wall is a director of Kopin Corporation.

OUR BOARD OF DIRECTORS BELIEVES THAT THE ELECTION OF THE NOMINEES FOR DIRECTOR IS IN THE BEST INTERESTS OF AUXILIUM AND ITS STOCKHOLDERS AND THEREFORE, IT RECOMMENDS YOU VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR.

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Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm

Subject to ratification by our stockholders, the Audit Committee of our Board of Directors has selected KPMG LLP as our independent registered public accounting firm for the Fiscal 2005. KPMG LLP has served as our independent registered public accounting firm since June 2002. KPMG LLP has informed us that they are not aware of any additional independence-related relationships between their firm and us other than the professional services discussed in “Independent Registered Public Accounting Firm Fees and Other Matters” below.

The affirmative vote of a majority of the votes cast at the Meeting is required to ratify the selection of KPMG LLP as our independent registered public accounting firm for Fiscal 2005. Votes may be cast (i) FOR, (ii) AGAINST or (iii) may ABSTAIN. Abstentions will count in the tabulations of votes cast on this proposal and will have the effect of a vote against for purposes of determining whether the proposal is approved. Broker non-votes are not counted as votes cast or shares voting on this proposal and will have no effect on the voting on this proposal.

Although stockholder ratification of the selection of KPMG LLP is not required by law, our Board of Directors believes that it is desirable to give our stockholders the opportunity to ratify this selection. If this proposal is not approved at the Meeting, the selection of such independent registered public accounting firm will be reconsidered by the Audit Committee of our Board of Directors. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm during the year if the Audit Committee determines such a change would be in the best interests of Auxilium and its stockholders.

One or more representatives of KPMG LLP is expected to attend the Meeting and have an opportunity to make a statement and/or respond to appropriate questions from our stockholders.

OUR BOARD OF DIRECTORS BELIEVES THAT THE SELECTION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2005 IS IN THE BEST INTERESTS OF AUXILIUM AND ITS STOCKHOLDERS AND THEREFORE, IT RECOMMENDS YOU VOTE FOR THIS PROPOSAL.

Independent Registered Public Accounting Firm Fees and Other Matters

The following table sets forth the aggregate fees billed by KPMG LLP, our independent registered public accounting firm, for professional services rendered with respect to Fiscal 2004 and for the year ended December 31, 2003 (“Fiscal 2003”).

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Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by the Audit Committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.

From time to time, the Audit Committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

The Audit Committee has delegated to the Chairman of the Audit Committee the authority to approve up to $15,000 of tax services to be provided to us by our independent registered public accounting firm. Any approval of tax services by the Chairman pursuant to this delegated authority must be reported to the full Audit Committee at its next scheduled meeting.

The prior approval of the Audit Committee was obtained for all services provided by KPMG LLP since the establishment of the Audit Committee in June 2004.

Other Matters

As of the date of this Proxy Statement, our Board of Directors does not know of any other matters that may come before the Meeting, other than as set forth in the Notice of Annual Meeting of Stockholders and this Proxy Statement. If any other matters properly come before the Meeting, it is intended that holders of the proxies will vote thereon in their discretion.

Deadline for Submission of Stockholder Proposals for the 2006 Annual Meeting of Stockholders

Proposals of stockholders intended to be presented at the 2006 Annual Meeting of Stockholders pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934 must be received by us no later than the close of business on December 29, 2005 in order that they may be included in the proxy statement and form of proxy relating to that meeting. Proposals should be addressed to Jennifer Evans Stacey, Secretary of Auxilium at the address set forth below.

In addition, our by-laws require that we be given advance notice of stockholder nominations for election to our Board of Directors and of other business that stockholders wish to present for action at an Annual Meeting of Stockholders (other than matters included in our proxy statement in accordance with Rule 14a-8 as described above). Such nominations and proposals, other than those made by or on behalf of the Board of Directors, must be made by notice in writing delivered to the Secretary at the address set forth below, and received no earlier than February 8, 2006 and no later than March 10, 2006, assuming that the 2006 Annual Meeting of Stockholders is to be held between May 19, 2006 and August 7, 2006, as we currently anticipate. In the event that the 2006 Annual Meeting of Stockholders is not held between May 19, 2006 and August 7, 2006, notice of stockholder nominees or proposals must be received no earlier than 120 days before the date of the 2006 Annual Meeting of Stockholders and no later than 90 days before the date of the 2006 Annual Meeting of Stockholders or the 10th day following our first public announcement of the date of such meeting, whichever is later. Our bylaws also require that such notice contain certain additional information. Copies of our bylaws can be obtained without charge from the Secretary.

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ADDITIONAL INFORMATION ABOUT DIRECTORS

Affirmative Determination Regarding Director Independence and Other Corporate Governance Matters

Our Board of Directors has determined that all of our directors, except for Gerri A. Henwood, are each an “independent director” as such term is defined in Marketplace Rule 4200(a)(15) of the National Association of Securities Dealers (the “NASD”). The Board also has determined that each member of the Audit Committee, the Compensation Committee and the Nominating and Governance Committee meets the independence requirements applicable to those committees as prescribed by the NASD, the Securities and Exchange Commission (the “SEC”), the Internal Revenue Service and applicable committee charters. The Board has further determined that Mr. Bescherer, the Chairman of our Audit Committee, is an “audit committee financial expert” as such term is defined in Item 401(h) of Regulation S-K promulgated by the SEC.

Code of Conduct. In June 2004, our Board of Directors adopted a Code of Conduct applicable to all our directors, officers and employees. Our Code of Conduct contains written standards designed to deter wrongdoing and to promote:

Our Code of Conduct is posted on our website at www.auxilium.com under the heading “Investor Relations—Corporate Governance”.

Committees and Meetings of our Board of Directors

Board of Directors. Our Board of Directors held 13 meetings during Fiscal 2004. Throughout this period, each member of our Board of Directors attended or participated in at least 75% of the aggregate of the total number of duly constituted meetings of the Board held during the period for which such person had been a director, and the total number of meetings held by all committees of the Board on which each such director served during the periods the director served. Our Board of Directors has three standing committees: the Compensation Committee, the Audit Committee and the Nominating and Governance Committee, each of which operates under a charter that has been approved by the Board. Each of these charters are also posted on our website at www.auxilium.com under the heading “Investor Relations—Corporate Governance”. Our Corporate Governance Guidelines provide that directors are expected to attend our Annual Meeting of Stockholders. During Fiscal 2003, we were a private company and took stockholder action by written consent in lieu of holding an Annual Meeting of Stockholders.

Compensation Committee. Our Compensation Committee was established in June 2004 pursuant to the Compensation Committee Charter posted on our website at www.auxilium.com under the heading “Investor Relations—Corporate Governance”. Specific responsibilities of our Compensation Committee include:

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The members of our Compensation Committee are Mr. Churchill (Chairman), Dr. Chambon and Mr. Classon. Our Compensation Committee held six meetings during Fiscal 2004.

Audit and Compliance Committee. Our Audit Committee was established in June 2004 pursuant to the Audit and Compliance Committee Charter attached hereto as Exhibit A. The Audit and Compliance Committee Charter is also posted on our website at www.auxilium.com under the heading “Investor Relations—Corporate Governance”.

Our Audit Committee assists our Board of Directors in its oversight and review of:

The Audit Committee has the sole and direct responsibility for appointing, evaluating and retaining our independent auditors, overseeing their work and monitoring the rotation of partners on our engagement team, as required by law. All audit services and all non-audit services to be provided to us by our independent auditors must be approved in advance by the Audit Committee. The Audit Committee also discusses with management and our independent auditors the results of any annual audit and review of our quarterly financial statements.

The members of the Audit Committee are Mr. Bescherer (Chairman), Mr. Classon and Mr. Wall, each of whom is an “independent director” under applicable Nasdaq listing standards promulgated by the NASD. Mr. Bescherer is our “audit committee financial expert” as required by Section 407 of the Sarbanes-Oxley Act of 2002. We believe that the composition of our Audit Committee meets the requirements for independence under the current requirements of the Sarbanes-Oxley Act of 2002, as well as Nasdaq and SEC rules and regulations. We believe that the functioning of the Audit Committee complies with the applicable requirements of the Sarbanes-Oxley Act of 2002, as well as Nasdaq and SEC rules and regulations. The Audit Committee held 11 meetings during Fiscal 2004.

Nominating and Governance Committee. Our Nominating and Governance Committee was established in June 2004, pursuant to the Nominating and Governance Committee Charter posted on our website at www.auxilium.com under the heading “Investor Relations—Corporate Governance”.

Specific responsibilities of our Nominating and Governance Committee include:

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Our Nominating and Governance Committee is composed solely of “independent directors”, which directors are deemed to be independent under applicable Nasdaq listing standards promulgated by the NASD. The members of our Nominating and Governance Committee are Mr. Purcell (Chairman), Mr. Bescherer and Mr. Wall. Our Nominating and Governance Committee held no meetings during Fiscal 2004.

Director Candidates

The process followed by our Nominating and Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, retention for a fee of search firms, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the committee and the Board.

In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended director nominees, our Nominating and Governance Committee will apply the criteria contained in the Nominating and Governance Committee’s charter. These criteria include the candidate’s understanding of and experience in the pharmaceutical industry, understanding of and experience in accounting oversight and governance, finance and marketing and leadership experience with public companies or other significant organizations. We believe that the backgrounds and qualifications of our directors as a whole should collectively possess a broad range of skills, expertise, industry and other knowledge, and business and other experience useful to the effective oversight of our business.

Stockholders may recommend individuals to our Nominating and Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate information about the candidate that would be required to be included in a proxy statement under the rules of the SEC, information about the relationship between the candidate and the recommending stockholder, the consent of the candidate to serve as a director and proof of the number of shares of our common stock that the recommending stockholder owns and the length of time the shares have been owned to the Nominating and Governance Committee via U.S. Mail (including courier or expedited delivery service) to the address set forth below. Assuming that appropriate material has been provided on a timely basis, the Nominating and Governance Committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.

Stockholders also have the right to nominate director candidates themselves, without any prior review or recommendation by the Nominating and Governance Committee or the Board, by following the procedures set forth herein under the heading “Deadline for Submission of Stockholder Proposals for the 2006 Annual Meeting of Stockholders” beginning on page 8.

Communicating with our Directors

Our Board of Directors will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. The Chairman of the Board is primarily responsible for monitoring communications from our stockholders and for providing copies or summaries to the other directors as he considers appropriate.

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Stockholders who wish to send communications on any topic to the Board as a whole should send such communication to the attention of the Chairman of the Board of Directors via U.S. Mail (including courier or expedited delivery service) to the address set forth below or by facsimile at 610-279-8250.

Stockholders who wish to send communications on any topic to an individual director in his or her capacity as a member of the Board, may send such communications to the attention of the individual director via U.S. Mail (including courier or expedited delivery service) to the address set forth below or by facsimile at 610-279-8250.

Compensation Committee Interlocks and Insider Participation

During Fiscal 2004, the members of our Compensation Committee were Mr. Churchill (Chairman), Dr. Chambon and Mr. Classon. None of our executive officers serves as a member of the Compensation Committee, or any other committee serving an equivalent function, of any entity that has as one or more of its executive officers serving as members of our Compensation Committee. No member of our Compensation Committee has ever been our employee. The issuance of options to members of our Compensation Committee is discussed herein under the heading “Compensation of Directors” below.

A member of Compensation Committee, Dr. Chambon, is a member of the Board of Directors of ePocrates, Inc. During Fiscal 2004, we used ePocrates, Inc. for Testim promotion services and new product surveys. We paid ePocrates $109,000 in 2004 for such services. The venture capital firm with which Dr. Chambon is affiliated, Sprout Capital IX, L.P., beneficially owns approximately 14% of our common stock and also maintains an investment of greater than 10% in ePocrates.

In October 2003, one of our directors, Mr. Winston J. Churchill, personally loaned Ms. Henwood, our Chief Executive Officer and Interim President, and her husband $100,000 for personal financial reasons. This loan bears interest at the prime rate compounded monthly and is repayable on demand. As of December 31, 2004, the total amount owed is $103,474.

Compensation of Directors

During Fiscal 2004, the non-employee members of our Board of Directors received an annual retainer for all services rendered as outside directors of $15,000. In addition, non-employee directors received the following fees for each meeting of the Board of Directors or a committee of the Board attended by each director in person or telephonically:

Meeting fees are paid quarterly in arrears and non-employee directors are reimbursed for their reasonable expenses incurred in attending meetings of our Board of Directors and a committee of the Board.

In addition, on the date of each Annual Meeting of Stockholders held after May 26, 2004, each non-employee who is elected (or re-elected) to serve as a director will automatically be granted an option to purchase 10,000 shares of our common stock.

Our directors who are also our employees serve without additional compensation.

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Report of the Audit and Compliance Committee

The Audit and Compliance Committee (the “Audit Committee”) of the Board of Directors of Auxiliium Pharmaceuticals, Inc., a Delaware corporation (the “Corporation”), is composed of three independent directors and operates under a written charter adopted by the Board of Directors. The members of the Audit Committee are Edwin A. Bescherer, Jr. (Chairman), Rolf A. Classon, and Michael Wall. The Audit Committee recommends to the Board of Directors, subject to stockholders ratification, the selection of the Corporation’s independent registered public accounting firm.

Management is responsible for the Corporation’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Corporation’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Corporation’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Corporation’s independent registered public accounting firm also provided to the Audit Committee the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with the independent registered public accounting firm that firm’s independence.

Internal Investigation

As a result of disclosures by management, on March 21, 2005, the Audit Committee initiated an internal investigation regarding certain transactions and compliance with the Corporation’s disclosure controls and procedures. Based on their evaluation of our disclosure controls and procedures and findings of the internal investigation conducted by the Audit Committee, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of Fiscal 2004 were ineffective and there were material weaknesses in our internal control over financial reporting.

The Corporation has taken a number of actions to improve compliance with its disclosure controls and procedures and internal control over financial reporting, including separating the functions of Chief Executive Officer and Chairman, naming our Vice Chairman, Rolf Classon, as Chairman, and instituting a specific related-party transaction approval process and a management training program focused on educating our management personnel on the types of issues that require disclosure under the rules and regulations of the SEC. The Committee believes that these efforts have addressed deficiencies in compliance with our disclosure controls and procedures and internal control over financial reporting in the past. The Committee and management plan to monitor the effectiveness of the Corporation’s disclosure controls and procedures and internal control over financial reporting. For detail regarding the scope of the investigation, the findings and the remedial actions, please see Item 9A in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the Securities and Exchange Commission.

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Conclusion

Based upon the Audit Committee’s discussion with management and the independent registered public accounting firm and the Audit Committee’s review of the representation of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the Securities and Exchange Commission.

Respectfully submitted,

By the Audit and Compliance Committee of the Board of Directors of Auxilium Pharmaceuticals, Inc.

Edwin A. Bescherer, Jr., Chairman

Rolf A. Classon

Michael Wall

April 28, 2005

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INFORMATION ABOUT EXECUTIVE OFFICERS

Background Information About Executive Officers

Our executive officers are elected annually by our Board of Directors and serve until their successors are duly elected and qualified. The following table identifies our current executive officers:

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Report of the Compensation Committee on Executive Compensation

The Compensation Committee of our Board of Directors is currently composed of three members, acts under a written charter adopted in June 2004 and complies with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC and the NASD. The Compensation Committee held six meetings during Fiscal 2004.

The Compensation Committee of the Board of Directors is responsible for establishing and administering the policies and plans related to compensation and benefits for officers and other Auxilium employees, including the “Named Executives” listed in the Summary Compensation Table beginning on page 19 of this Proxy Statement. The individuals listed in that table are referred to as the named executive officers.

This report provides information regarding policies and practices concerning compensation for our Chief Executive Officer and the other executive officers of Auxilium.

Compensation Overview

The Compensation Committee of the Board of Directors is responsible for (a) the establishment and periodic review of Auxilium’s compensation philosophy and the adequacy of the compensation plans for officers and other Company employees, (b) the establishment of compensation arrangements and incentive goals for officers and the administration of compensation plans, (c) the review of the performance of officers, the award of incentive compensation and the adjustment of compensation arrangements as appropriate based on performance, and (d) the review and monitoring of management development and succession plans.

The members of the Compensation Committee, Mr. Churchill (Chairman), Dr. Chambon and Mr. Classon, are independent directors of Auxilium.

Executive compensation consists of three principal elements: (a) salary, (b) short-term incentive awards and (c) long-term incentive awards. Auxilium provides additional retirement and other benefits for executives similar to those provided by other corporations in Auxilium’s industry.

To assess the competitiveness of its executive compensation levels, Auxilium commissioned a compensation survey conducted by a third-party employee benefits consulting firm. In analyzing the survey data, Auxilium looked particularly at compensation levels at comparable organizations both within and outside of our industry.

Salary

The salary level for each Auxilium executive officer is based principally on the executive’s responsibilities. Consideration also is given to factors such as the individual’s experience and performance and salaries paid to executive officers by comparable companies. When determining adjustments to each executive officer’s salary, consideration also is given to prevailing economic conditions and the adjustments being given to other employees within Auxilium.

Short-Term Incentive Awards

Short-term incentive awards, paid annually in cash, are for individual contributions to Auxilium’s financial performance. In considering the appropriate level of short-term compensation awards for Auxilium’s officers for Fiscal 2004 the Compensation Committee reviewed:

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In determining the short-term incentive award for the Chief Executive Officer, the Compensation Committee reviewed the Chief Executive Officer’s performance against the foregoing criteria. For the other executive officers, the Chief Executive Officer reviewed Auxilium’s performance and the individual contribution of each executive officer and made recommendations to the Compensation Committee with respect to the appropriate short-term incentive amount to be awarded to each individual for Fiscal 2004. The Compensation Committee met with the Chief Executive Officer to consider such recommendations, makes any appropriate changes, and then approved the short-term incentive awards.

Long-Term Incentive Awards

Long-term incentive awards are considered an important complement to the cash elements of Auxilium’s executive officers’ compensation because they align the executives’ interests with stockholders’ interests. A principal factor influencing the market price of Auxilium’s stock is Auxilium’s performance as reflected in its sales, earnings, cash flow and other results. By granting stock options or restricted stock to Auxilium’s executive officers, such individuals are encouraged to achieve consistent improvements in Auxilium’s performance. Auxilium’s stockholders have approved the plans under which such awards are made. The exercise price of options equals the closing market price of Auxilium’s stock on the grant date. Accordingly, options will only yield income to the executive if the market price of Auxilium’s stock is greater at the time of exercise than it was when the option was granted. Awards of shares of restricted stock are subject to forfeiture restrictions, which prohibit the recipient from selling such shares until all vesting conditions have been met. Awards provide inducements to the executive officers to remain with Auxilium over the long term and enhance corporate performance and, correspondingly, stockholder value. When determining whether to make grants of stock options or awards of restricted stock, as well as the size of such awards, for Fiscal 2004 the Compensation Committee considered:

In Fiscal 2004, the Board of Directors, in recognition of the executive officers’ role in significantly improving Auxilium’s performance as evidenced by our initial public offering in July 2004, made special, one-time grants of long-term incentive awards.

Ms. Henwood’s Compensation

In determining the appropriate levels for Ms. Henwood’s Fiscal 2005 base salary, the Compensation Committee considered the same factors it considered when setting base compensation levels for Auxilium’s other Named Executives.

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The Compensation Committee also evaluated data regarding CEO compensation practices of comparable companies so that Ms. Henwood’s total compensation would be in line with that of CEO’s of such other companies.

After considering the foregoing factors, the Compensation Committee approved a Fiscal 2005 annual base salary amount of $340,000 for Ms. Henwood.

Section 162(m)

Under Section 162(m) of the Internal Revenue Code, a publicly held corporation may not deduct more than $1 million in a taxable year for certain forms of compensation paid to the Chief Executive Officer or any other Named Executive whose compensation is required to be reported in the Summary Compensation Table. Auxilium’s policy is generally to preserve the federal income tax deductibility of compensation paid to its executives. Accordingly, to the extent feasible, Auxilium takes action to preserve the deductibility of certain stock-based incentive awards to its executive officers. However, the Compensation Committee retains the flexibility to authorize compensation that may not be deductible if it believes that it is in the interest of Auxilium to do so. The Compensation Committee believes that all compensation paid to its executives in Fiscal 2004 was deductible.

For Fiscal 2005, the Compensation Committee has not adopted or made any recommendation to the full Board regarding a bonus or other incentive compensation program, but it is anticipated that the same principles that applied to the program in Fiscal 2004 will likely apply in Fiscal 2005. Furthermore, it is contemplated that any stock options or awards that may be granted will be granted on a case-by-case basis, as and when deemed appropriate.

Respectfully submitted,

By the Compensation Committee of the Board of

Directors of Auxilium Pharmaceuticals, Inc.

Winston J. Churchill, Chairman

Philippe O. Chambon, M.D., Ph.D.

Rolf A. Classon

April 28, 2005

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Executive Compensation

Summary of Compensation in Fiscal 2004, 2003 and 2002

The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during Fiscal 2004, Fiscal 2003 and the year ended December 31, 2002 (“Fiscal 2002”), awarded to, earned by or paid to: (i) the individual who served as our Chief Executive during Fiscal 2004, (ii) our four most highly compensation executive officers other than the Chief Executive Officer who were serving as our executive officers at the end of Fiscal 2004; and (iii) one individual for whom disclosure would have been provided pursuant to (ii) but for the fact that the individual was not serving as an executive officer at the end of Fiscal 2004 (collectively, the “Named Executives”).

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Option Grants in Fiscal 2004

The following table sets forth information concerning individual grants of stock options made pursuant to the 2004 Equity Compensation Plan during Fiscal 2004 to each of the Named Executives.

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Aggregated Option Exercises in Fiscal 2004 and Fiscal Year-End Option Values

The following table sets forth information concerning each exercise of options during Fiscal 2004 by each of the Named Executives and the fiscal year-end value of unexercised in-the-money options.

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Equity Compensation Plan Information

We have two equity compensation plans: (i) our 2004 Equity Compensation Plan and (ii) our 2004 Employee Stock Purchase Plan. Both plans have been approved by our stockholders. The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2004.

Employment Contracts, Termination of Employment and Change-in-Control Arrangements with Named Executives

Employment Arrangements

We have employment agreements with Ms. Henwood, Mr. Lansing and Dr. Mattila. Under the terms of these employment agreements, Ms. Henwood is employed as our Chief Executive Officer and Interim President with a base salary of $340,000 for Fiscal 2005, Mr. Lansing is employed as our Chief Financial Officer and Executive Vice President, Commercial Logistics with a base salary of $213,002 for Fiscal 2005 and Dr. Mattila is employed as our Executive Vice President, Business Development, Research and Development and Technical Operations with a base salary of $300,000 for Fiscal 2005.

Under the employment agreements, the base salaries of these executives will be reviewed annually for appropriate increases by our Board of Directors or by our compensation committee. The employment agreements also provide that each executive will be entitled to participate in all incentive compensation plans that we establish. The employment agreements provide that these executives are eligible to receive benefits, including vacation and participation in our employee benefit plans, to the same extent as other employees. Participation in employee benefit plans will be subject to the terms of the benefit plans in effect from time to time.

In addition, Dr. Mattila’s agreement provides for reimbursement of up to $15,000 in settlement costs for a house purchase and reimbursement of educational expenses of $10,000 per year for each of his two children through the 2004-2005 academic year.

Each of the employment agreements may be terminated by us at any time for cause or upon 30 days written notice without cause. Under the agreements, if an executive’s employment ends for any reason, we will pay accrued compensation and benefits. If we terminate the employment of any of these executives without cause, or due to their disability we will be obligated to pay to that executive severance equal to nine months of the executive’s base salary. In addition, we would be obligated to pay for continued participation in our group medical, dental and prescription drug programs during the nine-month period after termination of employment or obtain comparable benefits at our cost.

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For purposes of the employment agreements, cause is defined generally to mean:

If a change of control occurs during the employment term and the executive’s employment is terminated without cause at any time or the executive resigns for good reason during the two-year period following the change of control, the executive will be entitled to the following change of control severance benefits:

For purposes of the employment agreements, good reason includes a substantial reduction of the executive’s duties and responsibilities, relocation to a place of employment more than 50 miles from the executive’s previous place of employment or reduction in the executive’s base salary. In general, a change of control includes:

If payments become due as a result of a change of control and the excise tax imposed by Internal Revenue Code Section 4999 applies, the terms of the employment agreements require us to pay the executive the amount of this excise tax plus the amount of income and other taxes due as a result of the payment of the amount of the excise tax.

The employment agreements include non-competition, confidentiality, development assignment and non-solicitation covenants. The agreements provide that for the nine-month (one-year for Ms. Henwood) period after termination of the executive’s employment for any reason, the executive will not directly or indirectly engage in any business or other activity in the U.S. and Canada that competes directly with us in the sale of pharmaceutical or other products being manufactured, marketed, distributed or developed by us at the time of termination of the executive’s employment. The agreements also provide that the executive will disclose and assign all developments discovered in connection with the executive’s employment, and that for the one-year period after termination of the executive’s employment for any reason, the executive will not solicit our principal customers, encourage any principal customer to reduce its patronage of us, or solicit or recruit our employees.

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Termination of Employment Arrangements

On April 13, 2005, we entered into a Separation of Employment Agreement and General Release (“Sebree Separation Agreement”) with Terri B. Sebree, our then Senior Vice President, Research and Development. Pursuant to the terms of the Sebree Separation Agreement, Ms. Sebree’s employment and Employment Agreement, dated April 21, 2004, was terminated effective April 13, 2005. In accordance with the terms and conditions of the Sebree Separation Agreement, Ms. Sebree will receive six months of severance benefits based upon her most recent annual base salary of $249,600, as well as medical, dental and prescription drug coverage through April 13, 2006.

Effective on March 10, 2005, we and Robert S. Whitehead mutually agreed to terminate his position as President and Chief Operating Officer. As a result, we are discussing the terms of a potential separation agreement with Mr. Whitehead. Mr. Whitehead’s employment agreement, as amended, provides that he will receive 12 months of severance benefits based upon his most recent annual base salary of $320,000 in the event that his position is eliminated within the first two years of employment or in the event his employment is terminated without cause. The employment agreement also provides for nine months of medical, dental and prescription drug coverage in the event Mr. Whitehead is terminated without cause.

On October 1, 2004, we entered into a Separation of Employment Agreement and Mutual General Releases (the “Hollingsworth Separation Agreement”) with Jane H. Hollingsworth, our then Executive Vice President, Secretary and General Counsel. Pursuant to terms of the Hollingsworth Separation Agreement, Ms. Hollingsworth ceased to serve as our Executive Vice President, Secretary and General Counsel effective October 1, 2004 and her Employment Agreement, dated April 21, 2004, was terminated. In accordance with the terms and conditions of the Hollingsworth Separation Agreement, Ms. Hollingsworth will receive nine months of severance benefits based upon her most recent base salary of $213,471, as well as medical, dental and prescription drug coverage through September 30, 2005 and accrued but unused vacation benefits. From October 1, 2004 to December 31, 2004, Ms. Hollingsworth remained in our employ in a limited role to facilitate the transition of her duties.

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INFORMATION ABOUT STOCK OWNERSHIP,

RELATED PARTY TRANSACTIONS AND PERFORMANCE

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information known to us concerning the beneficial ownership of our common stock as of April 14, 2005 for:

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock that could be issued upon the exercise of outstanding options and warrants held by that person that are currently exercisable or exercisable within 60 days of April 14, 2005 are considered outstanding. These shares, however, are not considered outstanding as of April 14, 2005 when computing the percentage ownership of each other person.

Except as indicated in the footnotes to this table and pursuant to state community property laws, each stockholder named in the table has sole voting and investment power for the shares shown as beneficially owned by them. Percentage of ownership is based on 20,674,730 shares of our common stock outstanding on April 14, 2005.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires a company’s directors, officers and stockholders who beneficially own more than 10% of any class of equity securities of the company registered pursuant to Section 12 of the Exchange Act (collectively, the “Reporting Persons”), to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to the company’s equity securities with the SEC. All Reporting Persons are required by SEC regulation to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a). Based solely on our review of the copies of such forms received by us and upon written representations of the our Reporting Persons received by us, we believe that there has been compliance with all Section 16(a) filing requirements applicable to our Reporting Persons.

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Certain Relationships and Related Transactions

We use Prosit, LLC for printing and copying services. Timothy Sharr, the brother of Ms. Henwood, our Chief Executive Officer and Interim President, holds a majority ownership interest in Prosit. Prosit received payments from us for printing and reproduction services provided of $1,099,000, $846,000 and $129,000 in 2004, 2003 and 2002, respectively. HH Capital Partners, an investment partnership controlled by the Ms. Henwood, our Chief Executive Officer and Jane H. Hollingsworth, our former general counsel, converted its majority equity interest in Prosit into a $240,000 loan in 2001. This loan bears interest at 4% and is repayable in four annual payments of $60,000 beginning on June 30, 2003. As of December 31, 2004, Prosit owes HH Capital Partners $180,000 under this loan. In addition, Prosit leases printing and copying equipment from HH Capital Partners. The 48-month lease commenced on January 1, 2001 and requires monthly payments of approximately $1,100. On April 14, 2005, HH Capital Partners forgave Prosit the payment of any outstanding loan, lease and interest payments.

During fiscal 2004, we used ePocrates, Inc. for Testim promotion services and new product surveys. We paid ePocrates $109,000 in 2004 for such services. Dr. Chambon, a member of our board of director and Compensation Committee, is a member of the board of directors of ePocrates. Additionally, the venture capital firm with which Dr. Chambon is affiliated, Sprout Capital IX, L.P., beneficially owns approximately 14% of our common stock and maintains an investment of greater than 10% in ePocrates.

Two siblings, Christopher Sharr and Diane Myers, and a sister-in-law, Suzanne Sharr, of Ms. Henwood, our Chief Executive Officer and Interim President, are employed by us. As of December 31, 2004, Mr. Sharr, Ms. Myers and Ms. Sharr held the positions of Director of Production Operations, Vice President of Regulatory and Quality Assurance and Director of Human Resources, respectively. Mr. Sharr earned, including bonuses, $107,000 in 2004. Ms. Myers earned, including bonuses, $151,000 in 2004. Ms. Sharr earned, including bonuses, $97,000 in 2004.

In October 2003, one of our directors, Mr. Winston J. Churchill, personally loaned Ms. Henwood, our Chief Executive Officer and Interim President, and her husband $100,000 for personal financial reasons. This loan bears interest at the prime rate compounded monthly and is repayable on demand. As of December 31, 2004, the total amount owed is $103,474.

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Comparative Stock Performance Graph

The graph below compares the cumulative total stockholder return on Auxilium common stock with the cumulative total stockholder return of (i) the Nasdaq Composite Index, and (ii) the Nasdaq Biotechnology Index, assuming an investment of $100 on July 23, 2004, the date Auxilium began public trading of its shares on Nasdaq, in each of the common stock of Auxilium; the stocks comprising the Nasdaq Composite Index; and the stocks comprising the Nasdaq Biotechnology Index.

ASSUMES $100 INVESTED ON JULY 23, 2004

ASSUMES DIVIDENDS REINVESTED

THROUGH FISCAL YEAR ENDING DECEMBER 31, 2004

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Additional Information

We will furnish, without charge, a copy of our Annual Report on Form 10-K for the year ended December 31, 2004 (“Form 10-K”), including financial statements and schedules thereto, but not including exhibits, to each of our stockholders of record on April 14, 2005 and to each beneficial stockholder on that date upon written request made to our Secretary at the address set forth under the heading “Deadline for Submission of Stockholder Proposals for the 2006 Annual Meeting of Stockholders” on page 8. A reasonable fee will be charged for copies of requested exhibits. Our Form 10-K is on file with the SEC and may be accessed electronically by means of the SEC’s home page on the Internet at http://www.sec.gov or by means of our home page on the Internet at http://www.auxilium.com under the heading “Investor Relations—SEC Filings.”

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE ENCLOSED ENVELOPE IS MAILED IN THE UNITED STATES. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY CARD SHOULD BE SIGNED AND RETURNED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.

By Order of the Board of Directors,

Jennifer Evans Stacey

Secretary

Norristown, Pennsylvania

April 28, 2005

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Exhibit A

CHARTER OF THE AUDIT AND COMPLIANCE COMMITTEE

OF THE BOARD OF DIRECTORS OF

AUXILIUM PHARMACEUTICALS, INC.

Adopted on June 9, 2004

Purpose

The Audit and Compliance Committee (the “Committee”) of the Board of Directors (the “Board”) of Auxilium Pharmaceuticals, Inc. (the “Company”) is appointed by, and generally acts on behalf of, the Board. The Committee’s purposes shall be to exercise the duties and responsibilities set forth below:

This Charter governs the operations of the Committee.

Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee is oversight.

Membership

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Meetings and Procedures

Duties and Responsibilities

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34

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General

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AUXILIUM PHARMACEUTICALS, INC.

This Proxy is solicited on behalf of the Board of Directors for the 2005 Annual Meeting of Stockholders

The undersigned, revoking all prior proxies, hereby appoints Gerri A. Henwood and Jennifer Evans Stacey, and each of them, each with the power to appoint her substitute, the true and lawful proxy holders of the undersigned, and hereby authorizes them to represent and vote, as designated on this Proxy, all of the shares of common stock of Auxilium Pharmaceuticals, Inc. (the “Company”) held of record by the undersigned on April 14, 2005, at the Annual Meeting of Stockholders of the Company to be held on June 8, 2005 (the “Meeting”) at 9:00 a.m., local time, at The Desmond Hotel, One Liberty Blvd, Malvern, Pennsylvania 19355 and any adjournments or postponements thereof.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE ENCLOSED ENVELOPE IS MAILED IN THE UNITED STATES.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH PROPOSAL. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.

x Please mark your votes as indicated in this example

PROPOSAL 1. To elect as directors, to hold office until the Company’s 2006 Annual Meeting of Stockholders or until their respective successors are elected and qualified, the seven nominees listed below:

Nominees: (01) Rolf A. Classon, (02) Edwin A. Bescherer, Jr., (03) Philippe O. Chambon, M.D., Ph.D., (04) Winston J. Churchill (05) Gerri A. Henwood, (06) Dennis J. Purcell, (07) Michael Wall

The Board of Directors recommends a vote “FOR ALL NOMINEES”

FOR ALL NOMINEES WITHHOLD FOR ALL NOMINEES For all Nominees, except as written above

IMPORTANT — CONTINUED AND TO BE SIGNED ON REVERSE SIDE

PROPOSAL 2. To ratify the selection by the Audit and Compliance Committee of the Company’s Board of Directors of the firm KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2005.

The Board of Directors recommends a vote “FOR” Proposal 2

FOR AGAINST ABSTAIN

In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment or adjournments thereof.

NOTE: Please sign exactly as your name appears hereon. Joint owners should each sign. Executors, administrators, trustees, guardians and others acting in a representative capacity should indicate the capacity in which they sign and give their full title as such. If a corporation, please indicate the full corporate name and have an authorized officer sign, stating title. If a partnership, please sign in partnership name by an authorized person.

Date

Share Owner Sign Here

Joint Owner Sign Here

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT