SUPG Supergen, Inc. (MM)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

 

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SUPERGEN, INC.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON    •    , 2011

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To the Stockholders:

        Notice is hereby given that the Annual Meeting of Stockholders of SuperGen, Inc., a Delaware corporation ("SuperGen" or the "Company"), will be held on     •    , 2011 at 2:00 p.m., local time, at the Company's principal executive office, 4140 Dublin Boulevard, Dublin, California 94568. In addition to other matters being put forward for consideration as part of our annual meeting, you are also being asked to approve a proposed stock issuance in connection with a proposed business combination transaction between SuperGen and Astex Therapeutics Limited, a private limited company organized in the United Kingdom ("Astex"). The terms of the transaction are contained in an implementation agreement dated April 6, 2011 (the "Implementation Agreement") that provides, among others things, for the acquisition of all outstanding Astex shares in exchange for (1) 35% of the outstanding stock of SuperGen (after giving effect to the share issuance) payable on the closing of the proposed transaction, (2) $25 million in cash also payable on the closing of the proposed transaction, and (3) an additional $30 million of deferred consideration payable in cash, stock or a combination of cash and stock, over a period of 30 months after the closing of the proposed transaction. If the proposed transaction is completed, SuperGen intends to change its name to Astex Pharmaceuticals, Inc. The proposed business combination described in the Implementation Agreement and all related transactions will be referred to in the accompanying proxy statement as the "Transaction."

        The following are all of the proposals being put forth for your consideration:

1.

To approve the issuance of (a) a number of shares of SuperGen common stock to certain former securityholders of Astex in connection with the Transaction equal to 35% of the outstanding stock of SuperGen after giving effect to the share issuance, plus an additional number of shares of SuperGen common stock potentially issuable in payment of some or all of the $30 million in deferred consideration, but in no event more than a total of 52.5 million shares of SuperGen common stock, and (b) a number of additional shares of SuperGen common stock potentially issuable upon exercise of certain options to be assumed by SuperGen in connection with the Transaction;



2.

To adjourn the annual meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the issuances of shares in connection with the Transaction;



3.

To elect six directors to serve for the ensuing year and until their successors are duly elected and qualified;



4.

To approve an amendment to the Company's 2008 Employee Stock Purchase Plan ("ESPP"), increasing the number of shares of common stock authorized for issuance by 250,000 shares for a total of 500,000 shares reserved under the ESPP;



5.

To ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending December 31, 2011;

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6.

To hold an advisory vote on compensation of our named executive officers; and



7.

To hold an advisory vote on the frequency of the advisory vote on compensation of our named executive officers.

        The above items of business are more fully described in the proxy statement accompanying this Notice.

        The Notice of Annual Meeting of Stockholders and a proxy statement, which more fully describe the formal business to be conducted at the meeting, follow this letter. Our Annual Report on Form 10-K is also enclosed herewith for your information.

        Only holders of record of the Company's common stock at the close of business on    •    , 2011, the record date, are entitled to notice of and to vote at the annual meeting.

        Your vote is very important.     A condition to the closing of the Transaction includes the receipt of affirmative votes by the holders of a majority of the outstanding shares of our common stock present and voting at the annual meeting in favor of Proposal One regarding the share issuances in connection with the Transaction. As the approval of Proposal One is a condition to the closing of the Transaction, we will be unable to complete the Transaction described in the accompanying proxy statement without receiving the required vote regarding the share issuances in connection with the Transaction. Approval of the other matters at the annual meeting is not a condition to the closing of the Transaction.

        Whether or not you plan to attend the annual meeting, please cast your vote as instructed in the proxy card as promptly as possible via the Internet, by mail or by telephone. If your shares are held in an account at a brokerage firm, bank or other nominee, you should instruct your broker, bank or nominee how to vote in accordance with the voting instructions furnished by your broker, bank or nominee. If you sign, date and send us your proxy card but do not indicate how you want to vote, your proxy will be voted "FOR" the issuance of our common stock in connection of the Transaction, "FOR" any proposal by our board of directors to adjourn the meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal One regarding the issuances of common stock in connection with the Transaction or with regard to any other proposal under consideration at the annual meeting, "FOR" the election of each of the nominees of our board of directors, "FOR" the amendment to our Employee Stock Purchase Plan, "FOR" the ratification of the appointment of Ernst & Young as our independent registered public accounting firm, "FOR" the advisory vote regarding compensation of named executive officers, and "FOR" the advisory vote regarding the frequency of the advisory vote regarding the compensation of named executive officers and directors to take place every three years. If you do not vote, it will have the same effect as a vote against the proposal to approve the stock issuances in connection with the Transaction as well as each of the other proposals.

         The SuperGen board of directors unanimously recommends that our stockholders vote (1) "FOR" Proposal One regarding the issuance of our common stock in connection with the Transaction and (2) "FOR" the approval of each of the other proposals outlined above and described in the accompanying proxy statement. After you have reviewed the enclosed materials, please vote by one of the means specified in the proxy statement as soon as you can. Thank you in advance for your continued support.

This proxy statement is dated        •        , 2011, and was first mailed to SuperGen stockholders on or about         •        , 2011.

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SUPERGEN, INC.

PROXY STATEMENT
FOR
2011 ANNUAL MEETING OF STOCKHOLDERS

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SUPERGEN, INC.

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PROXY STATEMENT
FOR
2011 ANNUAL MEETING OF STOCKHOLDERS

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INFORMATION CONCERNING SOLICITATION AND VOTING

General

        This proxy statement is being furnished in connection with the solicitation of proxies by the board of directors of SuperGen, Inc. ("we," "SuperGen," or the "Company") for use at the annual meeting of stockholders to be held on    •    , 2011 at 2:00 p.m., local time, and at any adjournments thereof as conducted in accordance with our bylaws, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. The annual meeting will be held at the Company's principal executive office, 4140 Dublin Boulevard, Dublin, California 94568. The telephone number at that location is (925) 560-0100. This proxy statement contains important information for you to consider when deciding how to vote on the matters set forth in the attached Notice of Annual Meeting. Please read it carefully.

        Beginning on    •    , 2011, we made copies of this proxy statement available to persons who were stockholders at the close of business on     •    , 2011, the record date for the annual meeting.

Costs of Solicitation

        We will pay the costs of soliciting proxies from stockholders. We may determine to engage a proxy solicitor to solicit proxies for the annual meeting proposals and if we do so, we would pay the fees and expenses of any such firm incurred in connection with the solicitation. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners, including fees associated with:

•

forwarding printed proxy materials by mail to beneficial owners who specifically request them; and



•

obtaining beneficial owners' voting instructions.

        Certain of our directors, officers and employees may solicit proxies on our behalf, without additional compensation, personally or by written communication, telephone, facsimile or other electronic means.

Record Date and Shares Outstanding

        Stockholders of record at the close of business on    •    , 2011 (the "Record Date") are entitled to notice of and to vote at the annual meeting. As of the Record Date,    •    shares of the Company's common stock were issued and outstanding. No shares of preferred stock were outstanding.

Householding

        In an effort to reduce printing costs and postage fees, we have adopted the practice approved by the SEC called "householding." Under this practice, stockholders who have the same address and last name will receive only one copy of our proxy materials unless one or more of these stockholders

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notifies us that they wish to continue receiving individual copies. Stockholders who participate in householding will continue to have access to and receive separate proxy voting instructions.

        If you share an address with another stockholder and received only one set of proxy materials and would like to request a separate copy of these materials, please send your request to: Corporate Secretary, SuperGen, Inc., 4140 Dublin Boulevard, Suite 200, Dublin, California 94568, or visit our website at www.supergen.com . You may also contact us at the same address if you received multiple copies of the proxy materials and would prefer to receive a single copy in the future.

QUESTIONS AND ANSWERS ABOUT THE TRANSACTION AND THE ANNUAL MEETING

         The following are some questions that you, as a stockholder of SuperGen, may have regarding the Transaction and the other matters being considered at SuperGen's Annual Meeting of Stockholders, which is referred to herein as "the meeting" or "annual meeting," and the answers to those questions. You are urged to carefully read this proxy statement (including the appendices hereto) and the other documents referred to in this proxy statement in their entirety because the information in this section does not provide all of the information that might be important to you with respect to the Transaction and the other matters being considered at the meeting. In particular the Implementation Agreement and the agreements attached as appendices to the proxy statement are the legally binding documents governing the terms of the Transaction and they supersede any contrary information which may be set forth in the descriptions thereof set forth below. Additional important information is contained in the appendices to, and the documents delivered along with this proxy statement. In this proxy statement, unless stated to the contrary, the terms "the company," "SuperGen," "we," "our," "ours," and "us," and any deviation thereof, refer to SuperGen, Inc. and its subsidiaries.

QUESTIONS AND ANSWERS ABOUT THE TRANSACTION

Q:

What will happen if the Transaction is approved?

A:

If the proposed Transaction were to be approved and all other closing conditions were satisfied or waived, we would acquire all the capital stock of Astex and Astex would become a wholly owned subsidiary of SuperGen. Shortly after closing the Transaction, we intend to change our corporate name to Astex Pharmaceuticals, Inc. Additionally, in connection with the closing, our board of directors would be increased from six to nine members, four of which members would be designees of Astex. The remaining five members would include five of SuperGen's current directors, including SuperGen's chief executive officer, Dr. James S.J. Manuso. See "Proposal Three—Approval of Election of Directors" for further information. For additional information about the Transaction, see the section below entitled "The Transaction" on page     •    .

Q:

What is the purpose of the Transaction?

A:

After evaluating a number of strategic alternatives, our board of directors determined that acquiring Astex would be in the best interests of SuperGen and our stockholders and believes that the combination would create a unique and important opportunity to expand our drug development partnerships, expand our clinical assets, make our drug discovery process more robust, better leverage our cash, realize economies of scale and develop expanded future revenue streams. See "Reasons for the Transaction" beginning on page     •    for a discussion of some of the reasons and the expected benefits of the Transaction.

Q:

What is the consideration we would pay in the Transaction?

A:

Under the terms of the Implementation Agreement, we would pay a mix of cash and stock at the closing of the Transaction and either cash, stock or a mix of cash and stock as deferred consideration. The initial consideration, payable at closing, would be $25 million in cash plus a

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number of shares of our common stock equal to 35% of our total outstanding shares of common stock as of the trading day prior to the closing, but after giving effect to the share issuance to Astex.

By way of illustration only, if we had 65 million shares outstanding on the day prior to closing, we would be required to pay certain Astex securityholders 35 million shares of our common stock, such that following the Transaction closing our pre-closing stockholders would hold 65% or 65 million of the 100 million post-closing shares outstanding and certain former Astex securityholders would hold 35% or 35 million of the 100 million post-closing shares.

The deferred consideration would be $30 million and may be paid by us in either cash, stock or a mix of cash and stock. The determination of the form of payment would be made by the audit committee of our board of directors. In no event would we issue shares (including both shares paid as initial consideration and as deferred consideration) in excess of 52.5 million shares of our common stock.

Additionally, we would assume all of Astex's outstanding options and two outstanding warrants. If these were all to be exercised, we would not expect the number of shares we would have to issue to exceed 2.5 million shares of our common stock (assuming the trading price of our common stock does not drop below £0.53 or $0.86 per share and assuming a conversion exchange rate of $1.6195 per pound sterling).

Q:

Are there any conditions to the payment of the additional $30 million in deferred consideration?

A:

No. We have guaranteed that if the Transaction closes, we would pay $15 million no later than 18 months after the closing and any remaining unpaid amount of the $30 million in deferred consideration on the 30-month anniversary of the closing. These payments of deferred consideration may be accelerated if certain milestones are met under existing Astex partnering agreements. See "Implementation Agreement—Consideration in the Transaction" on page     •    for further information on the nature of the milestones and the partnering agreements.

Q:

How would SuperGen voting stock be owned after the closing of the Transaction?

A:

On the closing date of the Transaction, our stockholders as of immediately prior to the closing would own approximately 65% of the total outstanding shares of SuperGen common stock and certain former Astex securityholders would own approximately 35% of the total outstanding shares of SuperGen common stock. After the closing, former Astex securityholders may increase their aggregate percentage ownership in SuperGen as a result of the exercise of options being assumed by SuperGen and as a result of payment by us of any of the $30 million in deferred consideration in the form of SuperGen common stock. In no event would SuperGen issue more than 52.5 million shares of common stock to former Astex shareholders, which would equal almost 47% of the total outstanding shares of SuperGen, if calculated as of the closing date.

Q:

What would happen to my SuperGen common stock if the Transaction closes?

A:

If the Transaction were to be completed, your shares of SuperGen common stock would continue to remain outstanding, and no change would occur to your shares. After the closing date, your shares of SuperGen common stock would continue to represent an ownership interest in SuperGen. You would not be required to sell or exchange your shares of SuperGen common stock in the Transaction. Because of the name change that is expected to take place shortly after the Transaction, the shares you currently hold would automatically refer to Astex Pharmaceuticals, Inc. No further action on your part would be required.

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Q:

Why is SuperGen intending to change its name to Astex Pharmaceuticals, Inc. after the closing of the Transaction?

A:

After the closing of the Transaction, we intend to change our name to Astex Pharmaceuticals, Inc. because we believe that the combined entity from the Transaction will be a stronger company than either of its predecessors and a new name will reflect that change.

Q:

What symbol would the shares of SuperGen's common stock trade under after the closing of the Transaction?

A:

Immediately after the closing of the Transaction, shares of common stock of SuperGen would continue to be traded on the NASDAQ Global Select Market, which is referred to in this proxy statement as "NASDAQ," under SuperGen's existing ticker symbol "SUPG." However, after the name change is completed, we would expect our stock to trade on NASDAQ under a new ticker symbol "ASTX" to reflect the new corporate name of Astex Pharmaceuticals, Inc.

Q:

Why are you asking for SuperGen stockholders to approve the share issuance in the Transaction?

A:

Rule 5635 of the Marketplace Rules of The NASDAQ Stock Market requires stockholder approval for the issuance of more than 20% of a company's outstanding common stock in connection with (x) a transaction other than a public offering or (y) the acquisition of stock or assets of another company. Because completion of the Transaction would require us to issue at least 35% of our total outstanding shares after giving effect to the Transaction (and possibly up to as many at 52.5 million shares), we are asking you to approve the maximum possible share issuance as well as the other proposals described in this proxy statement.

Q:

Who would receive the newly issued SuperGen shares and other consideration payable under the terms of the Implementation Agreement?

A:

The holders of shares of Astex capital stock and holders of certain Astex convertible securities would be eligible to receive the shares of newly issued SuperGen common stock and other consideration issuable in the Transaction. The shares and other consideration would be allocated among the former Astex securityholders in accordance with the terms and conditions of the Implementation Agreement. If the High Court approves the scheme of arrangement, the Sellers' Representative will be required to enter into (on behalf of the former Astex officers, directors, and certain affiliated shareholders) Lock-Up Agreements with SuperGen that would restrict those former Astex shareholders from transferring any of the shares of SuperGen common stock that they receive in the Transaction for a period of two months following the closing date. Two months after the closing, 25% of the stock held by those former Astex shareholders would be released and eligible to be sold. Four months after the closing, another 25% of the stock held by those former Astex shareholders would be released and eligible to be sold. Six months after the closing, another 25% of the stock held by those former Astex shareholders would be released and eligible to be sold. Eight months after the closing, all remaining stock held by those officers, directors and affiliated former Astex shareholders would be released and fully available to be sold. Additionally, certain of the Astex shareholders may agree amongst themselves that any shares of SuperGen common stock they intend to sell during the first twelve months following the closing would be sold in an orderly fashion pursuant to a Coordinated Selling Agreement. SuperGen is not a party to the Coordinated Selling Agreement and, as a result, the Coordinated Selling Agreement will only become effective if finalized and agreed upon among certain of the Astex shareholders. See "Certain Additional Agreements Related to the Transaction—Lock-Up Agreements" on page     •    for further information on the restrictions on the shares of SuperGen common stock to be issued to Astex in the Transaction.

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Q:

Is there a termination fee potentially payable under the Implementation Agreement?

A:

Yes . Under certain circumstances, either party may be required to pay the other party a fee of $6 million if the Implementation Agreement is terminated. See "Implementation Agreement—Termination of the Implementation Agreement; Termination Payments" on page     •    .

Q:

Would SuperGen stockholders receive any of the deal consideration if the Transaction closes?

A:

No . Our stockholders would not receive any of the proceeds in connection with the Transaction. Following the closing, our stockholders would continue to hold the shares they held immediately prior to the Transaction, although our existing stockholders would experience dilution in their percentage ownership as a result of the share issuances to the former Astex securityholders.

Q:

What is the scheme of arrangement?

A:

The scheme of arrangement is one means of acquiring the share capital of a U.K. company. The scheme of arrangement will involve two hearings before the High Court in London, England following which, the court is expected to approve the scheme, which, subject to filing of the court orders with the Registrar of Companies in the U.K., will result in SuperGen becoming the sole shareholder of Astex in exchange for payment of the consideration described in the Implementation Agreement.

Q:

What vote is required to approve Proposal One regarding the issuance of the SuperGen shares in connection with the Transaction?

A.

The affirmative "FOR" vote of a majority of the shares of our outstanding common stock represented, in person or by proxy, and entitled to vote is required to approve Proposal One regarding the issuance of our common stock to Astex shareholders. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. Broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal.

Q:

When does SuperGen expect to complete the Transaction?

A:

Assuming that (1) we obtain the required approval of our stockholders, (2) the scheme of arrangement is approved by the High Court in the United Kingdom, and (3) the other closing conditions described in the Implementation Agreement have been satisfied or waived, we believe that the closing would occur in the third calendar quarter of 2011. Because the Transaction is subject to a number of other conditions, some of which are beyond our control, the exact timing of the closing date cannot be predicted.

Q:

What are the United States federal income tax consequences to the SuperGen stockholders of the Transaction?

A:

SuperGen stockholders will not recognize any gain or loss for United States federal income tax purposes as a result of (1) the consummation of the Transaction or (2) the contemplated name change from SuperGen to Astex Pharmaceuticals, Inc. For more information about the United States federal income tax consequences, see "The Transaction—Material United States Federal Income Tax Consequences" on page     •    of this proxy statement.

Q:

Do I have appraisal or dissenters' rights?

A:

No . You will not be entitled to exercise any appraisal or dissenters' rights in connection with the Transaction.

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Q:

Are there any risks related to the Transaction?

A:

Yes . The Transaction may not achieve the expected benefits because of the risks and uncertainties discussed in the section entitled "Risk Factors" of this proxy statement on page     •    , which we urge you to read and consider carefully. Our board of directors considered a variety of potential risks in its deliberations concerning the Transaction, including, without limitation:

•

after the closing date, SuperGen may not successfully integrate the operations of Astex in a timely manner, or at all, and may not realize the anticipated benefits or synergies of the Transaction to the extent, or in the timeframe, anticipated;

•

as a result of the Transaction, certain former Astex securityholders, as a group, initially would own approximately 35% of our outstanding common stock and, if acting as a group, would have the ability to exert significant influence on matters submitted to our stockholders;

•

as a result of the Transaction terms, deferred payments would also be made totaling $30 million, which payments may be made in stock, cash, or a combination of both. If these payments are made in whole or in part in stock, then the former Astex securityholders would hold as a group in excess of 35% of our outstanding common stock. If the former Astex securityholders continued as a group to hold such a significant percentage of our common stock, it would be difficult for another party to acquire SuperGen or otherwise effect a change of control unless the former Astex securityholders supported such a transaction;

•

after the closing date, certain former Astex securityholders and, within eight months after the closing, all of the Astex securityholders who received shares of our common stock in the Transaction would have the ability to sell their shares of our common stock, which could adversely affect our stock price;

•

we will be required to pay the deferred consideration of $30 million regardless of whether the drug development milestones included in the Implementation Agreement are met;

•

Astex's drug discovery platform may not be compatible with SuperGen's drug development capabilities;

•

we may not be able to successfully integrate the research, development, finance and support operations of both companies; and

•

we may not be able to successfully integrate the management teams and boards of SuperGen and Astex.

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QUESTIONS AND ANSWERS REGARDING OUR ANNUAL MEETING

        Although we encourage you to read this proxy statement in its entirety, we include this question and answer section to provide some background information and brief answers to several questions you may have about the annual meeting or this proxy statement.

Q:

Why am I receiving this proxy statement?

A:

We are soliciting proxies for our annual meeting. You are receiving a proxy statement because you owned shares of SuperGen common stock on     •    , 2011, the "record date," and that stock ownership entitles you to vote at the annual meeting. Our board is soliciting proxies to vote at our annual meeting on the proposals noted below.

Q:

How does this annual meeting differ from SuperGen's typical annual meeting?

A:

In addition to the annual opportunity to vote on the election of directors and the ratification of the appointment of our independent registered public accounting firm, this year our stockholders will also be asked to vote on Proposal One regarding the share issuances in connection with the Transaction, to consider an amendment to increase the authorized shares for issuance under our 2008 Employee Stock Purchase Plan as well as to submit advisory votes regarding compensation and the frequency of the timing of review of compensation.

Q:

What proposals will be voted on at the annual meeting?

A:

There are seven proposals scheduled to be voted on at the annual meeting:

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approval of, among other things, the issuance of at least 35% of the post-Transaction closing outstanding stock of SuperGen, but not more than 52.5 million shares of our common stock to former securityholders of Astex pursuant to the Transaction;

•

approval to authorize the adjournment of the annual meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of issuing the shares in connection with the Transaction;

•

election of the nominees for director set forth in this proxy statement;

•

approval of an amendment to the Company's 2008 Employee Stock Purchase Plan ("ESPP") increasing the number of shares of common stock authorized for issuance by 250,000 shares for a total of 500,000 shares reserved under the ESPP;

•

ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2011;

•

an advisory vote on compensation of our named executive officers; and

•

an advisory vote on the frequency of the advisory vote on compensation of our named executive officers.

Q:

What is SuperGen's voting recommendation?

A:

The Board recommends that you vote your shares as follows:

•

"FOR" approval of the issuances of shares provided in Proposal One in connection with the Transaction;

•

"FOR" approval to adjourn the annual meeting to solicit additional proxies, if necessary;

•

"FOR" each of the nominees to the SuperGen board of directors;

•

"FOR" approval of the amendment to the ESPP;

•

"FOR" ratification of the appointment of our independent registered public accounting firm;

•

"FOR" the approval, on an advisory basis, of the compensation of our named executive officers; and

•

In favor of the advisory vote on the compensation of our named executive officers occurring every three years.

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Q:

As a SuperGen stockholder, why am I electing SuperGen directors if the directors will change after the closing of the Transaction if Proposal One is approved?

A:

Delaware law requires us to hold a meeting of our stockholders each year. We have determined that we will observe this requirement and hold the meeting to elect the members of the SuperGen board of directors and ask stockholders to vote on other matters set forth in Proposals Three through Seven as well as in connection with the other required votes related to the Transaction. The share issuances to former Astex securityholders pursuant to the Implementation Agreement is an important corporate event and we are considering these proposals together with the regular annual meeting proposals in part to avoid the expense and diversion of management's attention that would be required if we held two separate stockholder meetings to address the regular annual meeting proposals apart from the significant corporate transaction proposals. The SuperGen directors elected at the meeting will serve as directors of SuperGen following the meeting through the closing date of the Transaction, and if that is not approved or otherwise does not close, until our annual meeting of stockholders to be held following our fiscal year ending December 31, 2011, or their earlier removal or resignation. Five of the nominees for election as members of the SuperGen board of directors are expected to continue to serve as members of the SuperGen board of directors following the closing of the Transaction and an additional four nominees selected by Astex are expected to serve as members of the SuperGen board of directors following the closing of the Transaction. More information about the qualifications and background of the Astex board nominees can be found on page     •    .

Q:

Who can vote at the annual meeting?

A:

The board of directors has set    •    , 2011 as the record date for the annual meeting. All stockholders who owned SuperGen common stock at the close of business on    •    , 2011 may attend and vote at the annual meeting. Each stockholder is entitled to one vote for each share of common stock of SuperGen held as of the record date on all matters to be voted on. Stockholders do not have the right to cumulate votes. Shares held as of the record date include shares that are held directly in your name as the stockholder of record and those shares held for you as a beneficial owner through a broker, bank or other nominee.

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:

Most stockholders of SuperGen hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholders of Record

        If your shares are registered directly in your name with SuperGen's transfer agent, BNY Mellon Shareowner Services, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to grant your voting proxy directly to SuperGen or to vote in person at the annual meeting.

Beneficial Owners

        If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name," and your broker, bank or other nominee is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote and are also invited to attend the annual meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the annual meeting unless you request a "legal proxy"

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from the broker, bank or other nominee who holds your shares, giving you the right to vote the shares at the annual meeting.

Q:

How many votes does SuperGen need to hold the Annual Meeting?

A:

A majority of SuperGen's outstanding shares as of the record date must be present at the annual meeting in order to hold the meeting and conduct business. This is called a quorum. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to the matters on which the broker has expressly not voted. Thus, broker non-votes will not affect the outcome of any of the matters being voted on at the annual meeting. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because the broker has not received voting instructions from the beneficial owner and lacks discretionary voting power to vote such shares.

Shares are counted as present at the meeting if you:

•

are present and vote in person at the meeting; or



•

have properly submitted a proxy card or voting instruction card or voted by telephone or via the Internet.

Q:

How are votes counted?

A:

You may vote either "FOR" or "WITHHOLD" with respect to each nominee for the board of directors on Proposal Three. You may vote "FOR," "AGAINST" or "ABSTAIN" on Proposals One, Two, Four, Five and Six and may vote for "ONE YEAR," "TWO YEARS," "THREE YEARS," or "ABSTAIN" on Proposal Seven. Voting results are tabulated and certified by Broadridge Financial Solutions, Inc.

Q:

What happens if I do not cast a vote?

A:

Stockholders of record —If you are a stockholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the annual meeting. However, if you submit a signed proxy card with no further instructions, your shares will be counted as a vote "FOR" each director nominee on Proposal Three; "FOR" Proposals One, Two, Four, Five and Six; and "THREE YEARS" on Proposal Seven.

Beneficial owners —If you hold your shares in street name it is critical that you cast your vote if you want it to count in the election of directors (Proposal Three) and with respect to all other proposals including Proposal One. The only exception is with regard to Proposal Five. In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they felt appropriate. Recent changes in regulation were made to take away the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares only on the ratification of the appointment of our independent registered public accounting firm (Proposal Five).

Q:

What is the voting requirement to approve each of the proposals?

A:

With respect to Proposal Three, the election of directors, assuming we have a quorum, the six nominees receiving the highest number of affirmative votes of the shares entitled to be voted will be elected as directors of the Company. Votes withheld and broker non-votes have no legal effect due to the fact that director elections are by a plurality. Again, assuming we have a quorum,

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Proposals One, Two, Four, Five and Six require the affirmative "FOR" vote of a majority of the shares of our outstanding common stock represented, in person or by proxy, and entitled to vote. With respect to Proposal Seven, the option of "1 YEAR," "2 YEARS" or "3 YEARS" that receives the highest number of votes cast by stockholders will be the frequency for the advisory vote on executive compensation recommended by stockholders. Abstentions are deemed to be Votes Cast and have the same effect as a vote against these proposals. Broker non-votes are not deemed to be Votes Cast and, therefore, are not included in the tabulation of the voting results on these proposals.

Q:

How can I vote my shares in person at the Annual Meeting?

A:

Shares held directly in your name as the stockholder of record may be voted in person at the annual meeting. If you choose to do so, please bring your proxy card or proof of identification to the annual meeting. Even if you plan to attend the annual meeting, SuperGen recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the annual meeting. If you hold your shares in street name, you must request a legal proxy from your broker or other holder of record in order to vote at the annual meeting.

Q:

How can I vote my shares without attending the Annual Meeting?

A:

Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the annual meeting. If you are a stockholder of record, you may vote by submitting a proxy. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker, bank or other nominee; please refer to the voting instructions provided to you by your broker, bank or other nominee.

Internet —Stockholders of record with Internet access may submit proxies by following the "Vote by Internet" instructions on your proxy card until 11:59 p.m., Eastern Time, on June     •    , 2011, or by following the instructions at www.proxyvote.com . Most of our stockholders who hold shares beneficially in street name may vote by accessing the website specified in the voting instructions provided by their brokers, banks or other nominees. A large number of banks and brokerage firms are participating in Broadridge Financial Solutions, Inc.'s online program. This program provides eligible stockholders the opportunity to vote over the Internet or by telephone. Voting forms will provide instructions for stockholders whose bank or brokerage firm is participating in Broadridge's program.

Telephone —Stockholders of record may vote by telephone by following the instructions listed on the proxy card. Stockholders who hold shares beneficially in street name may vote by telephone as specified in the voting instructions provided by their brokers, banks or other nominees.

Mail —Stockholders of record may vote by completing, signing and dating the proxy card and by returning it in the prepaid envelope that will be provided. Stockholders who hold shares beneficially in street name may vote via the voting instruction card provided by their brokers, banks or other nominees.

Q:

How can I change or revoke my vote?

A:

Subject to any rules your broker, bank or other nominee may have, you may change your proxy instructions at any time before your proxy is voted at the annual meeting.

Stockholders of record —If you are a stockholder of record, you may change your vote by (1) delivering to the Company, prior to your shares being voted at the annual meeting, a written notice of revocation or a duly executed proxy card, in either case dated later than the prior proxy relating to the same shares, or (2) by attending the annual meeting and voting in person (although attendance at the annual meeting will not, by itself, revoke a proxy). Any written notice of revocation or subsequent proxy card must be received by us prior to the taking of the vote at the

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annual meeting. Such written notice of revocation or subsequent proxy card should be hand delivered to SuperGen or should be sent so as to be delivered to our principal executive offices, Attention: Chief Financial Officer.

Beneficial owners —If you are a beneficial owner of shares held in street name, you may change your vote (1) by submitting new voting instructions to your broker, bank or other nominee, or (2) if you have obtained, from the broker, bank or other nominee who holds your shares, a legal proxy giving you the right to vote the shares by attending the annual meeting and voting in person.

In addition, a stockholder of record or a beneficial owner who has voted via telephone may also change their vote by making a timely and valid subsequent telephone vote no later than 11:59 p.m., Eastern Time, on    •    , 2011.

Q:

Where can I find the voting results of the Annual Meeting?

A:

The preliminary voting results will be announced at the annual meeting. The final results will be published in a report on Form 8-K to be filed within four business days after the annual meeting.

Q:

Who are the proxies and what do they do?

A:

The two persons named as proxies on the proxy card, James S.J. Manuso, our President and Chief Executive Officer, and Michael Molkentin, our Chief Financial Officer, were designated by the board of directors. All properly executed proxies will be voted (except to the extent that authority to vote has been withheld) and where a choice has been specified by the stockholder as provided in the proxy card, it will be voted in accordance with the instructions indicated on the proxy card. If you submit the proxy card, but do not indicate your voting instructions, your shares will be voted as noted above.

Q:

What should I do if I receive more than one set of proxy materials?

A:

If you received more than one set of proxy materials, your shares are registered in more than one name or brokerage account. Please follow the voting instructions on each voting instruction card that you receive to ensure that all of your shares are voted.

Q:

What happens if additional proposals are presented at the Annual Meeting?

A:

If you grant a proxy, the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the annual meeting. If for any unforeseen reason any of SuperGen's nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the board of directors.

Q:

Is my vote confidential?

A:

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within SuperGen or to third parties except (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote or (3) to facilitate a successful proxy solicitation by the board of directors. Occasionally, stockholders provide written comments on their proxy cards, which are then forwarded to SuperGen's management.

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SUMMARY OF THE TRANSACTION

         This summary highlights selected information from this proxy statement. It does not contain all of the information that may be important to you. We encourage you to read this proxy statement carefully and in its entirety, including all of the appendices and the other documents delivered with this proxy statement, to fully understand the proposals. See "Where You Can Find Additional Information" on page     •    .

The Companies
SuperGen, Inc. (see page     •    )
4140 Dublin Avenue, Suite 200
Dublin, CA 95468
(925) 560-0100

        We are a pharmaceutical company dedicated primarily to the discovery and development of novel cancer therapeutics in epigenetic and cell signaling modulation. We develop products through biochemical and clinical proof of concept to partner for further development and commercialization. We have Tyrosine Kinase and DNA methyltransferase inhibitors in pre-clinical and clinical development.

        Our primary developmental efforts revolve around the products progressing out of our small-molecule drug discovery programs. We commenced Phase I clinical trials for amuvatinib (MP-470), our multi-targeted kinase inhibitor and DNA repair suppressor in June 2007, and we are anticipating the commencement of a Phase II trial in small cell lung cancer with this product in the first half of 2011. In early 2009, we initiated clinical trials for a second internally developed product, SGI-1776, a PIM kinase inhibitor. This clinical program was terminated in 2010 due to specific cardiac toxicity. We intend to continue the larger discovery effort targeted at PIM kinases with alternative product candidates. In 2010, SGI-110, our small molecule DNA hypomethylating agent, received clearance from the United States Food and Drug Administration ("FDA") to advance into Phase I trials. We announced the dosing of the first patients in the Phase I trial in January 2011.

        We currently receive royalty revenues relating to sales of Dacogen® (decitabine) for Injection, a product approved by the FDA for treatment of patients with myelodysplastic syndromes ("MDS"), which we licensed to MGI PHARMA Inc. ("MGI") in 2004.

        In October 2009, we entered into a multi-year collaboration agreement with GlaxoSmithKline ("GSK") to discover and develop cancer therapeutics based on epigenetic targets. Pursuant to the agreement, GSK may exercise an option to license from us the compounds that are the result of the research effort. Upon execution of the agreement, we received an upfront payment of $2 million from GSK, as well as a $3 million investment in shares of our common stock, sold at a 10% premium to market price. Total potential development and commercialization milestones payable to us could exceed $375 million, and we may also receive tiered royalties into double digit magnitudes, payable on net sales of any resulting products.

Astex Therapeutics Limited (see page     •    )
436 Cambridge Science Park
Milton Road
Cambridge, CB4 0QA, United Kingdom

        Astex Therapeutics Limited is a private limited U.K.-based company that develops targeted therapies for oncology and virology. Astex Therapeutics is using an innovative, fragment-chemistry based drug discovery platform, Pyramid™, to identify and develop new medicines, primarily for the treatment of cancer and infectious diseases. Astex has established a clinical stage pipeline of novel oncology drug candidates, including seven proprietary and partnered products, three of which are in or

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about to enter Phase II clinical trials, two partnered products in Phase I clinical trials, and a further two products being prepared for start of clinical trials.

        Pyramid defines a process by which a range of high throughput biophysical and computational techniques are used to experimentally characterize the interactions of very low molecular weight compounds (fragments) with their target proteins. Although there are many advantages of a fragment-based approach to drug discovery, there are significant technical challenges to overcome before the approach can be used effectively. The fundamental challenge is one of detection. Because fragments are so small, they will have fewer interactions with target proteins than larger, more complex compounds. This means they will bind to their targets with very low affinity. Conventional screening systems based on bioassays are designed to detect binding that occurs at higher affinities than is typically observed with fragments. As such, fragments cannot be detected using conventional screening methods. Accordingly, a fundamental challenge in establishing a fragment-based drug discovery capability is the development of efficient screening systems that can detect the binding of fragments. Astex's Pyramid drug discovery platform addresses limitations in conventional high throughput screening and other forms of fragment-based screening by combining high throughput X-ray crystallography, NMR spectroscopy, calorimetry and other biophysical methods with advanced computational techniques and structure-based design to enable Astex's chemists to design, synthesize and test novel fragment-derived drug molecules in a seamlessly integrated process.

        The productivity of Pyramid has allowed Astex to generate a robust pipeline including novel "first-in-class" drug compounds and potential "best-in-class" drug candidates which the company is advancing independently and through valuable strategic partnerships with industry leaders such as AstraZeneca, GlaxoSmithKline, Janssen Pharmaceutica (a Johnson & Johnson company) and Novartis.

Summary of the Transaction (see page     •    )

        SuperGen and Astex have entered into an Implementation Agreement that governs the terms and conditions of SuperGen's proposed acquisition of all the shares of Astex through a scheme of arrangement in the United Kingdom. The scheme of arrangement is a court process under the laws of the United Kingdom, which, if successfully completed, would result in the cancellation of all currently outstanding Astex shares of capital stock, with Astex becoming a wholly owned subsidiary of SuperGen. Shortly after the closing of the Transaction, SuperGen intends to change its name to Astex Pharmaceuticals, Inc. In exchange for the existing Astex shares, SuperGen would pay to the shareholders of Astex both initial consideration (consisting of cash and stock) and deferred consideration (consisting of cash, stock or a combination of cash and stock). We believe that through this Transaction, SuperGen would emerge as an industry leader in oncology drug development, which we have identified as our initial top strategic priority.

        The Transaction is governed by the terms of the Implementation Agreement, a copy of which is attached as Appendix A to this proxy statement, and a scheme circular to be posted by Astex to its shareholders containing agreed form terms and conditions appended to the Implementation Agreement. We encourage you to read the Implementation Agreement and its schedules and exhibits carefully and in their entirety. For more information on the Implementation Agreement, see the section entitled "Implementation Agreement" on page     •    .

        Transaction Consideration.     The initial consideration, payable at the closing of the Transaction, would consist of $25 million in cash and a number of shares of SuperGen common stock equal to 35% of the issued and outstanding stock of SuperGen as of the closing after giving effect to the issuance of the new shares. By way of illustration only, if SuperGen were to have 65 million shares outstanding on the day prior to the closing of the Transaction, we would be required to issue 35 million shares of our common stock on the closing, such that following the closing of the Transaction, the SuperGen pre-closing stockholders would hold 65% or 65 million of the 100 million post-closing SuperGen shares

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and certain former Astex securityholders would hold 35% or 35 million of the 100 million post-closing SuperGen shares. The deferred consideration payable by SuperGen is equal to $30 million and may be paid by us in cash, SuperGen common stock, or a combination of cash and SuperGen common stock. The form of deferred consideration payment is at the discretion of the SuperGen audit committee. The timing of the deferred consideration payment is variable depending on the achievement of certain milestones, but the full amount would be paid no later than 30 months after the closing of the Transaction, with a minimum of $15 million payable on the 18-month anniversary of the Transaction closing date and any remaining unpaid amount of the $30 million deferred consideration payable on the 30-month anniversary of the Transaction closing date. The exact timing of the deferred consideration payments would be determined according to the terms of the Implementation Agreement, which provides that payments may be accelerated in the event that specific milestones are met.

        As a result of these payments, immediately after the closing, certain former Astex securityholders would hold SuperGen common stock representing approximately 35% of the total outstanding shares of SuperGen. In the event, however, that any of the $30 million of deferred consideration is paid in part or in whole with SuperGen common stock, then the percentage ownership of the former Astex securityholders, as a group, would increase. In no event however would we issue to the Astex securityholders more than 52.5 million shares of SuperGen common stock (including both shares required to be issued as initial consideration and shares potentially issuable as deferred consideration).

        Finally, in addition to the consideration described above, we would assume all of Astex's currently outstanding options and warrants. In the aggregate, if all assumed options and warrants were exercised following the closing, we would not expect the total number of shares of SuperGen common stock issuable upon such exercise to exceed 2.5 million shares of our common stock (provided that the trading price of our common stock does not drop below £0.53 or $0.86 per share and assuming a conversion exchange rate of $1.6195 per pound sterling).

        Support Agreements.     Each of the members of the SuperGen board of directors, in their capacities as stockholders (or future stockholders) of SuperGen, have entered into Support Agreements that require them to vote in favor of the issuances of the shares and otherwise support the Transaction. As a group, these SuperGen stockholders represent approximately 1% of our outstanding stock. Likewise, certain officers, directors and other Astex affiliates have entered into Irrevocable Undertakings that require these shareholders to vote their shares of Astex capital stock in support of the Transaction. As a group, these Astex shareholders represent approximately 54% of the outstanding Astex capital stock. The form of Support Agreement is attached to this proxy statement as Appendix B and the forms of Irrevocable Undertakings are attached as Appendix C .

        Lock-Up Agreements.     Under the terms of the scheme of arrangement, if the High Court approves the scheme, it will authorize the Sellers' Representative (on behalf of certain the former Astex shareholders) to enter into Lock-Up Agreements with SuperGen following the closing of the Transaction that will limit the ability of those former Astex shareholders to sell 25% of their stock until two months after the closing of the Transaction, another 25% until four months after the closing, another 25% until six months after the closing and the remaining 25% until eight months after the closing. Additionally, certain Astex shareholders may enter into a Coordinated Selling Agreement with one another that would allow for a coordinated sale of any SuperGen shares that members of that group intend to sell during the 12-month anniversary following the closing of the Transaction. SuperGen is not a party to the Coordinated Selling Agreement and, as a result, the Coordinated Selling Agreement will only become effective if finalized and agreed upon among certain of the Astex shareholders. The form of Lock-Up Agreement is attached as Appendix D . We encourage you to read the Support Agreement, Irrevocable Undertakings and Lock-Up Agreement, together with the Implementation Agreement, because these agreements describe the rights and limitations governing certain SuperGen and Astex shareholders' voting obligations in connection with the Transaction as well

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as rights and limitations governing certain Astex shareholders' ownership of the SuperGen common stock to be received by them in the Transaction.

        Board Recommendation.     The SuperGen board of directors has unanimously voted in favor of the Implementation Agreement and the transactions contemplated by the Implementation Agreement, including the Transaction and has determined that the Transaction and the share issuances in connection with the Transaction are advisable and fair to, and in the best interests of SuperGen and its stockholders and recommends that SuperGen stockholders vote "FOR" Proposal One regarding the share issuances.

Board and Management Following the Closing (see page     •     )

        Following the closing, the size of the SuperGen board of directors will be increased from six to nine members. Five of the members would be continuing SuperGen directors and four new members would be elected from the designees selected by Astex. The continuing SuperGen directors would be Messrs. Charles J. Casamento, Thomas V. Girardi, Allan R. Goldberg, Walter J. Lack and James S.J. Manuso. The four members designated by Astex initially are expected to be Harren Jhoti, Peter Fellner, Ismail Kola and Timothy Haines.

        Following the closing, Dr. Manuso would remain Chairman and Chief Executive Officer, Mr. Molkentin would remain Chief Financial Officer, and Mohammad Azab would remain Chief Medical Officer of the combined entity. Dr. Jhoti, currently the Chief Executive Officer of Astex, would become President, and Dr. Buckland, currently Chief Business Officer of Astex, would become Chief Business Officer of the combined entity after the closing of the transaction.

Opinion of Houlihan Lokey Financial Advisors, Inc. (see page     •     )

        On April 6, 2011 Houlihan Lokey Financial Advisors, Inc., or Houlihan Lokey, rendered an oral opinion to our board of directors (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated April 6, 2011), as to the fairness, from a financial point of view, of the consideration to be paid by us, taken in the aggregate, for all of the outstanding share capital of Astex in the Transaction pursuant to the draft of the Implementation Agreement dated as of March 30, 2011, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion.

        Houlihan Lokey's opinion was directed to our board of directors and only addressed the fairness from a financial point of view of the consideration to be paid by us, taken in the aggregate, for all of the outstanding share capital of Astex in the Transaction pursuant to the Implementation Agreement and does not address any other aspect or implication of the Transaction. The summary of Houlihan Lokey's opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Appendix E to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute advice or a recommendation to our board of directors or any stockholder as to how to act or vote with respect to the Transaction or related matters. See "The Transaction—Opinion of Houlihan Lokey Financial Advisors, Inc." on page     •    .

Reasons for the Transaction (see page     •     )

        In reaching its decision to approve the share issuances to Astex, approve the Implementation Agreement and otherwise approve the Transaction, our board of directors consulted with our senior

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management team, as well as our outside advisors, and considered the following factors and potential benefits of the Transaction:

•

discussions with our senior management team regarding our business, financial performance and condition, operations, competitive position, business strategy, strategic objectives and options and prospects, as well as risks involved in achieving these objectives and prospects; the nature of our business and the industry in which we compete; and current industry, international, national and local economic conditions, both on a historical and on a prospective basis, all of which led our board of directors to conclude that the Transaction presented an opportunity for our stockholders to realize greater value than the value likely to be realized by stockholders in the event we remained independent or pursued other alternatives;



•

a review of the possible alternatives to an acquisition of Astex, which included (1) remaining a stand-alone entity, (2) seeking to expand our own drug development capabilities and the timeline in which such expansion might occur and our likelihood of successfully doing so, (3) consummating other strategic acquisitions and an analysis of the strengths and weaknesses of each; the value to our stockholders of such alternatives; the timing and likelihood of actually achieving additional value from these alternatives; the likely universe of third parties who might be interested in entering into a strategic transaction with SuperGen; the risks of pursuing such alternatives and our board of directors' assessment that none of these alternatives was reasonably likely to result in value for our stockholders greater than the value of the acquisition of Astex. In this regard, our board of directors considered the highly competitive oncology drug development space in which we operate, and the financial constraints on growing our drug development capabilities;



•

the risks associated with SuperGen remaining a stand-alone company, including the challenges of continuing to develop our research and drug growth capabilities, our reliance on a limited number of drugs and drug candidates for immediate and long-term revenue generation, our anticipated operating performance and competitive position;



•

the current and historical market prices of our common stock, the current and historical market prices of our common stock relative to those of other industry participants and general market indices;



•

the financial analysis reviewed by Houlihan Lokey with our board of directors, and the oral opinion to our board of directors (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated April 6, 2011), with respect to the fairness, from a financial point of view, of the consideration to be paid by us, taken in the aggregate, for all of the share capital of Astex in the Transaction pursuant to the Implementation Agreement, as of April 6, 2011, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. See "The Transaction—Opinion of Houlihan Lokey Financial Advisors, Inc." beginning on page     •    ;



•

the belief of our board of directors that the Transaction would be more favorable to SuperGen stockholders than the potential value that might result from other alternatives available, including continuing to operate in the ordinary course of business and the alternatives available pursuant to other strategic initiatives;



•

the terms of the definitive Implementation Agreement and related agreements, as reviewed by our board of directors with our outside legal advisors, including:



•

the structure of the Transaction;



•

the representations and warranties; and

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•

the conditions to closing the Transaction; and



•

the ability of SuperGen to consider unsolicited acquisition offers and, in accordance with the termination provisions, terminate the Implementation Agreement under certain circumstances after paying a termination fee, as described in more detail in "The Implementation Agreement—Termination Payments" on page     •    .

        In the course of its deliberations, our board of directors also identified and considered a variety of risks and other countervailing factors, including:

•

the possibility that the Transaction might not be completed and the effect of the public announcement and pendency of the Transaction on our management's attention, our ability to retain employees, our relationship with partners, and our sales, operating results and stock price and our ability to attract and retain key management and sales, marketing and technical personnel;



•

the fact that we may be obligated to pay Astex a $6 million termination fee under specified circumstances;



•

the pre-closing operational restrictions on the conduct of our business, requiring us to conduct business only in the ordinary course, subject to specific limitations, which could delay or prevent SuperGen from undertaking business opportunities that may arise pending completion of the Transaction and the length of time between signing and closing during which these restrictions would be in place;



•

that, while the Transaction is expected to be completed, there can be no assurance that all conditions to the parties' obligations to complete the Transaction will be satisfied, and as a result, the possibility that the Transaction might not be completed, even if the issuance of the shares were to be approved by our stockholders; and



•

the risks that even if the Transaction is completed, the potential benefits sought in the Transaction may not be fully realized, including, without limitation, Astex's drug-discovery platform may not produce viable clinical candidates for SuperGen to monetize, and some or all of the existing partnerships with large pharmaceutical companies might not continue; the risk associated with the substantial charges to be incurred in connection with the Transaction, including costs of integrating the businesses and transaction expenses arising from the Transaction; the risk that the stock price of SuperGen will be negatively impacted by the dilution caused by the Transaction; the limitations, as a result of the consummation of the Transaction, on SuperGen's use of its net operating losses, and the risk that despite the efforts of the combined company, key employees might not remain employed by the combined company. See the section of this proxy statement entitled "The Implementation Agreement—Conditions to the Closing of the Transaction" beginning on page     •    .

        Our board of directors considered all of these factors as a whole and, on balance, concluded that they supported a favorable determination to enter into the Implementation Agreement. The foregoing discussion of the information and factors considered by the board of directors is not exhaustive. In view of the wide variety of factors considered by our board of directors in connection with its evaluation of the proposed Transaction and the complexity of these matters, the board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. The board of directors evaluated the factors described above and reached a consensus that the proposed Transaction was advisable to, fair to, and in the best interests of, SuperGen and its stockholders. In considering the factors described above and any other factors, individual members of the board of directors may have viewed factors differently or given different weights or merits to different factors.

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Transaction Financing (see page     •     )

        The consummation of the Transaction is not subject to a financing contingency. We expect to finance this Transaction with SuperGen's cash and cash equivalents as well as Astex's cash and cash equivalents immediately after the closing of the Transaction, including any milestone payments received as a result of the partnered projects.

Market Price

        Our common stock is listed on NASDAQ under the symbol "SUPG." On April 6, 2011, the last full day of trading prior to the public announcement of the proposed Transaction, our common stock closed at a price of $3.23, for an aggregate implied equity value of $195 million. Accordingly, if the Transaction had been consummated on that day, the incremental value attributable to the common stock we would have issued to certain former Astex securityholders at the closing would have equaled $105 million. See the section entitled "Market Price and Dividend Information" beginning on page     •    .

Overview of the Implementation Agreement (see page     •    )

        The Implementation Agreement is the definitive agreement setting forth all the terms and conditions of the "scheme of arrangement" under the laws of the United Kingdom. The scheme of arrangement is a court process under the laws of the U.K., involving two hearings before the High Court in London, England, with the end result that all outstanding Astex shares of capital stock would be cancelled and Astex would become a wholly owned subsidiary of SuperGen. In exchange for the existing Astex shares, SuperGen would pay to the shareholders of Astex both initial consideration (consisting of cash and stock) and deferred consideration (consisting of cash, stock or a combination of cash and stock). Shortly after the closing of the Transaction, SuperGen intends to change its corporate name to Astex Pharmaceuticals, Inc.

Closing of the Transaction

        The Transaction is subject to a number of closing conditions that must be either satisfied or waived before the Transaction can be completed. These closing conditions include (1) the requirement that we obtain the requisite vote of SuperGen stockholders in favor of Proposal One regarding the share issuances at our annual meeting, (2) the approval of the scheme of arrangement by a majority in number of each class of Astex's shareholders representing seventy-five percent (75%) or more in value of the Astex shares of that class voted by those Astex shareholders and (3) the resolutions required to implement the scheme of arrangement and set out in the notice of the Astex General Meeting being duly passed by the requisite majority at the Astex General Meeting. Additionally, once all closing conditions have been either satisfied or waived, the Transaction is subject to and conditional upon the receipt of orders of the High Court in London (1) sanctioning the scheme under section 899 of the Companies Act 2006 and (2) confirming the associated reduction of the entire issued share capital of Astex under section 641 of the Companies Act 2006. At that point, the closing would take place on the date that is the later of (1) the date on which Astex delivers the Scheme Court Order to the Registrar of Companies, or (2) the date of registration by the Registrar of Companies of the Reduction Court Order, or (3) such later date as Astex and SuperGen mutually agree and to which the Court agrees.

Consideration in the Transaction

        Upon the closing, SuperGen would provide $25 million in cash, as converted into U.K. Sterling at the applicable exchange rate on the business day immediately prior to the closing date of the Transaction to its paying agent for distribution to certain former Astex securityholders in accordance with the allocations provided by Astex. In addition, upon the closing, SuperGen would also issue to

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certain former Astex securityholders a number of shares of our common stock equal to 35% of our total outstanding shares of common stock as of the trading day prior to the closing, but after giving effect to the share issuance to Astex. By way of illustration only, if SuperGen were to have 65 million shares outstanding on the day prior to the closing of the Transaction, we would be required to pay to certain former Astex securityholders 35 million shares of our common stock on the closing, such that following the closing of the Transaction, the SuperGen pre-closing stockholders would hold 65%, or 65 million, of the 100 million post-closing SuperGen shares and certain former Astex securityholders would hold 35%, or 35 million, of the 100 million post-closing SuperGen shares.

        Following the closing of the Transaction, SuperGen would pay $30 million in deferred consideration to its paying agent for distribution to the former Astex securityholders in accordance with the payment schedule provided by Astex. The timing and form of deferred consideration payments is variable. Although all $30 million in deferred consideration must be paid by the 30-month anniversary of the closing, the payment of the full amount may be accelerated under the terms and conditions described in greater detail below. Additionally, although the maximum amount of deferred consideration would be equal to $30 million, SuperGen's audit committee may elect to pay that amount is cash, shares of SuperGen common stock or a combination of cash and stock.

Governance Matters

        Prior to closing, SuperGen will increase the size of the SuperGen board of directors from six directors to nine directors. Following the closing of the Transaction, one existing SuperGen board member would resign and the four open directorships will be filled by nominees designated by Astex. The selection of the Astex-nominated directors will be subject to the determination by the Nominating and Governance Committee of SuperGen's board of directors that the addition of such proposed members would not cause fewer than a majority of the resulting SuperGen board to qualify as "independent" under the rules and regulations of the SEC and NASDAQ and that each of the proposed members meets the qualifications for service on SuperGen's board of directors. If the Nominating and Governance Committee determines that one or more of the Astex designees are not qualified to serve on the SuperGen board of directors, then the Committee would notify Astex providing the reasons for its conclusion and Astex would have the right to nominate replacement nominees.

        Astex's current nominees are Harren Jhoti, Peter Fellner, Ismail Kola and Timothy Haines. Following the closing of the Transaction, the terms of the Implementation Agreement authorize the nine-member SuperGen board of directors to establish the corporate governance structure for the combined company, which would include the appointment of Peter Fellner as the Vice Chairman of the board of directors and the appointment of Harren Jhoti as President.

No Solicitation

        Until the earlier of the closing date or the date of a termination of the Implementation Agreement, as the case may be, neither SuperGen nor Astex will take any of the following actions:

•

solicit any acquisition proposal;



•

disclose any information not customarily disclosed concerning its business, technologies or properties, or afford to any person access to their respective properties, technologies, books or records, not customarily afforded such access; and



•

assist or cooperate with any third party to make any acquisition proposal.

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Purchaser Name Change

        Following the closing of the Transaction, SuperGen agreed to use its commercially reasonable efforts to effect a name change from "SuperGen, Inc." to "Astex Pharmaceuticals, Inc." through a short-form merger under Delaware law.

Conditions to Closing of the Transaction

        The Transaction is subject to a variety of typical closing conditions as well as closing conditions relating to the scheme of arrangement under United Kingdom law. The Implementation Agreement sets forth the customary closing conditions, which, if not satisfied, would allow either SuperGen or Astex to elect not to close. These include requirements that:

•

both the required Astex shareholder approvals and the required SuperGen stockholder approvals have been obtained.



•

none of the parties is subject to any order or injunction of a court of competent jurisdiction that prohibits the consummation of the transactions contemplated by the Implementation Agreement.



•

no statute, rule, regulation or order shall have been enacted, entered, enforced or deemed applicable to the Transaction by a governmental entity that makes the Transaction or the scheme illegal.



•

other than the filing of the Court Orders with the Registrar, all other authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any governmental entity in connection with the Transaction, shall have been filed, been obtained or occurred on terms and conditions which could not reasonably be likely to have either a material adverse effect on SuperGen or a material adverse effect on Astex.

        There are also additional closing conditions specific to SuperGen and Astex.

Termination Payments .

        Either Astex or SuperGen may have to pay the other a $6 million termination fee under certain circumstances, including if the terminating party has received an unsolicited acquisition proposal that the board of directors (after complying with various additional obligations and, in the case of Astex, providing SuperGen an opportunity to top the third party offer) of the terminating party believes to be a superior offer.

Termination

        The Implementation Agreement provides that the agreement may be terminated in the following circumstances:

•

as agreed in writing between Astex and SuperGen at any time prior to the closing of the Transaction;



•

by either Astex or SuperGen at any time prior to the closing of the Transaction:



•

if the closing has not occurred by August 30, 2011, subject to certain exceptions;



•

if the Transaction has been enjoined or declared illegal;



•

if SuperGen does not obtain the requisite approval of its stockholders; or



•

if Astex does not obtain the requisite approvals of its shareholders;

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•

by SuperGen or Astex at any time prior to the closing:



•

upon a non-curable or non-cured breach of any covenant or agreement on the part of the other party;



•

in the event of a material adverse effect on the other party;



•

if the other party's board of directors changes its recommendation or takes certain other prohibited actions; or



•

if the other party receives an unsolicited acquisition proposal, determines that the acquisition proposal is a superior offer, otherwise complies in full with its obligations and pays the applicable termination fee.

Risk Factors (see page     •    )

         The Transaction, including the possibility that the Transaction may not be consummated, poses a number of risks to SuperGen and its stockholders. In addition, both SuperGen and Astex are subject to various risks associated with their businesses and their industries. The combined entity will also be subject to these and other risks. We encourage you to read carefully the section of this proxy statement entitled "Risk Factors" and the risk factors set forth in other documents we have filed with the SEC which are accompanying or incorporated by reference into this proxy statement.

Interests of SuperGen's Directors and Executive Officers in the Transaction (see page     •    )

        In considering the recommendation of our board of directors with respect to the proposals to be acted upon by our stockholders at the annual meeting, our stockholders should be aware that members of our board of directors and executive officers of SuperGen may have interests in the Transaction that may be different from, or in addition to, interests they may have as SuperGen stockholders. These differing interests include the continuing service of several of our existing directors and executive officers after the closing date. Our board of directors was aware of these interests and considered them, among other things, in making its recommendation that our stockholders vote for Proposal One regarding the approval of the share issuances to Astex.

Voting by SuperGen Directors and Executive Officers (see page     •    )

        On    •    , 2011, the record date set by the SuperGen board of directors for the annual meeting, the directors and executive officers of SuperGen and their affiliates owned and were entitled to vote    •    shares of SuperGen common stock, or approximately     •    % of the shares of SuperGen common stock outstanding on that date.

SuperGen intends to List Shares of SuperGen Common Stock Issued to Astex on the NASDAQ Global Select Market (see page     •    )

        SuperGen has agreed to use all commercially reasonable efforts to cause the shares to be issued to the former Astex shareholders pursuant to the Implementation Agreement to be authorized for listing on NASDAQ, subject to notice of issuance. The listing of the shares on NASDAQ (subject to notice of issuance) is a condition to Astex's obligation to complete the Transaction.

SuperGen intends to Change its Name to Astex Pharmaceuticals, Inc. (see page     •    )

        Shortly after the closing of the Transaction, SuperGen intends to change its name to Astex Pharmaceuticals, Inc. and change its ticker symbol on NASDAQ to "ASTX."

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Material United States Federal Income Tax Consequences (see page     •    )

        SuperGen stockholders would not recognize any gain or loss for United States federal income tax purposes as a result of the consummation of the Transaction.

Accounting Treatment of the Transaction

        The Transaction will be accounted for as an acquisition of Astex by SuperGen using the acquisition method of accounting under U.S. generally accepted accounting principles. Under the acquisition method of accounting, assets and liabilities of Astex will be, as of completion of the merger, recorded at their respective fair values and added to those of SuperGen, including an amount for goodwill representing the difference between the purchase price and the fair value of the identifiable net assets. Financial statements of SuperGen issued after the merger will include the operations of Astex beginning with the date the merger closes, but will not be restated retroactively to include the historical financial position or results of operations of Astex for the periods prior to the closing of the merger.

        Following the completion of the merger, the earnings of the combined company will reflect acquisition accounting adjustments, for example, amortization of identified intangible assets and additional stock compensation expense. Goodwill and acquired in-process research and development assets resulting from the acquisition will not be amortized but instead will be tested for impairment at least annually (more frequently if certain indicators are present). The final allocation of the purchase price will be determined after the merger closes and after completion of an analysis to determine the fair values of Astex assets and liabilities. Accordingly, the final acquisition accounting adjustments may be materially different from the amounts reflected in the unaudited pro forma condensed combined financial statements contained in this proxy.

No Appraisal or Dissenters Rights

        Under Section 262 of the General Corporation Law of the State of Delaware, SuperGen stockholders do not have appraisal rights in connection with the Transaction.

Regulatory Matters (see page     •    )

        The Transaction is subject to and conditioned upon completion of Astex's procedures in compliance with Section     •    of the Court of England and receipt of an order of fairness issuable by the Court of England.

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DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

        Our stockholders may submit proposals that they believe should be voted upon at our next annual meeting or nominate persons for election to the board. Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended ("Rule 14a-8"), some stockholder proposals may be eligible for inclusion in the proxy statement for our 2012 annual meeting. Any such stockholder proposals must be submitted in writing to the attention of the Corporate Secretary, SuperGen, Inc., 4140 Dublin Boulevard, Suite 200, Dublin, California 94568, no later than    •    , 20            , which is 120 calendar days prior to the one-year anniversary of the mailing date of the prior year's proxy materials or a notice of availability of proxy materials (whichever is earlier). Stockholders interested in submitting such a proposal are advised to contact knowledgeable legal counsel with regard to the detailed requirements of applicable securities laws. The submission of a stockholder proposal does not guarantee that it will be included in the 2012 proxy statement.

        Alternatively, under our bylaws, a nomination or a proposal for the 2012 annual meeting that the stockholder does not seek to include in our 2012 proxy statement pursuant to Rule 14a-8 may be submitted in writing to the Corporate Secretary, SuperGen, Inc., 4140 Dublin Boulevard, Suite 200, Dublin, California 94568, not later than the 45th day nor earlier than the 75th day before the one-year anniversary of the date on which the company first mailed its notice of availability of proxy materials for the preceding year's annual meeting. As described in our bylaws, the stockholder submission must include certain specified information concerning the stockholders and the proposal or nominee, as the case may be. If a stockholder gives notice of such a proposal after the deadline computed in accordance with our bylaws, the stockholder will not be permitted to present the proposal to the stockholders for a vote at the meeting.

        The SEC rules also establish a different deadline for submission of stockholder proposals that are not intended to be included in our proxy statement with respect to discretionary voting. The discretionary vote deadline for the 2012 annual meeting is    •    , 2012 (45 calendar days prior to the one-year anniversary of the mailing date of the prior year's proxy materials or a notice of availability of proxy materials (whichever is earlier). If a stockholder gives notice of such a proposal after the discretionary vote deadline, our proxy holders will be allowed to use their discretionary voting authority to vote against the stockholder proposal when and if the proposal is raised at the annual meeting.

CORPORATE GOVERNANCE AND OTHER MATTERS

Corporate Go v ernance Guidelines

        Our board of directors adopted Corporate Governance Guidelines that outline, among other matters, the role and functions of the board. A copy of the Corporate Governance Guidelines is available in the corporate governance section on our website at www.supergen.com .

Board Independence

        Our board of directors is the ultimate decision-making body of the Company, except with respect to those matters reserved for the approval of stockholders. Our board of directors has reviewed the independence of each director and determined that all of our directors, other than Dr. Manuso, are independent directors under the marketplace rules of the NASDAQ Stock Market. We have also determined that all directors serving as members of our Audit Committee, Compensation Committee, and Governance and Nominating Committee are independent under the marketplace rules of the NASDAQ Stock Market and the rules of the SEC.

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Consideration of Stockholder Recommendations and Nominations

        The Governance and Nominating Committee of our board of directors will consider both recommendations and nominations from stockholders for candidates to our board of directors. A stockholder who desires to recommend a candidate for election to our board of directors should direct the recommendation in writing to the Corporate Secretary, SuperGen, Inc., 4140 Dublin Boulevard, Suite 200, Dublin, California 94568, and must include the candidate's name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and SuperGen within the last three years and evidence of the nominating person's ownership of SuperGen stock and amount of stock holdings. For a stockholder recommendation to be considered by the Governance and Nominating Committee as a potential candidate at an annual meeting, nominations must be received on or before the deadline for receipt of stockholder proposals.

        If, instead, a stockholder desires to nominate a person directly for election to our board of directors, the stockholder must follow the rules set forth by the SEC (see "Deadline for Receipt of Stockholder Proposals" above) and meet the deadlines and other requirements set forth in Section 2.5 of our Bylaws, including, among other things: (1) the name and address of the stockholder and any "stockholder associated person" proposing to make such nomination and the name, age, business address and residence address of the nominee; (2) the principal occupation or employment of the nominee; (3) the class and number of shares of SuperGen stock that are held of record or are beneficially owned by the stockholder, any stockholder associated person and the nominee, and any derivative positions held or beneficially held by any such persons; (4) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of such stockholder, any stockholder associated person or the nominee with respect to any of our securities, and a description of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such stockholder, any stockholder associated person or the nominee with respect to any of our securities; (5) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder; and (6) a written statement executed by the nominee acknowledging that as a director of SuperGen, the nominee will owe a fiduciary duty under Delaware law with respect to SuperGen and stockholders.

Identifying and Evaluating Nominees for Director

        The Governance and Nominating Committee seeks directors with established records of significant accomplishment in business and areas relevant to our strategies. We believe this philosophy helps to create a board of directors that represents a mix of backgrounds, is strong in its collective knowledge and has a diversity of skill and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, and industry knowledge. The Committee also seeks directors who share individual characteristics that we believe are essential to achieve a well-functioning deliberative body, including integrity, independence, commitment to SuperGen and to the interests of our stockholders and the willingness to challenge and stimulate management in an environment of mutual trust. In addition, the Committee believes that candidates should have substantial experience with one or more publicly traded national or multinational companies. While our board of directors and the Committee do not have a specific diversity policy, diversity is considered in the identification and evaluation of nominees for our board of directors because a variety of points of view contribute to a more effective decision making process. The

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Committee uses the following procedures to identify and evaluate the individuals that it selects, or recommends that our board of directors select, as director nominees:

•

The Committee will review the qualifications of any candidates who have been properly recommended or nominated by stockholders, as well as those candidates who have been identified by management, individual members of our board of directors or, if the Committee determines, a search firm. This review may, in the Committee's discretion, include a review solely of information provided to the Committee or may also include discussions with persons familiar with the candidate, an interview with the candidate or other actions that the Committee deems proper.



•

The Committee will evaluate the performance and qualifications of individual members of our board of directors eligible for re-election at the annual meeting of stockholders.



•

The Committee will consider the suitability of each candidate, including the current members of our board of directors, in light of the current size and composition of the board of directors. In evaluating the suitability of the candidates, the Committee considers many factors, including, among other things, issues of character, judgment, independence, diversity, age, expertise, diversity of experience, length of service, other commitments and the like. The Committee evaluates such factors, among others, and considers each individual candidate in the context of the current perceived needs of our board of directors as a whole. While the Committee has not established specific minimum qualifications for director candidates, the Committee believes that candidates and nominees must reflect a board of directors that is comprised of directors who (1) are predominately independent, (2) are of high integrity, (3) have qualifications that will increase overall board of directors effectiveness and (4) meet other requirements as may be required by applicable rules, such as financial literacy or financial expertise with respect to Audit Committee members.



•

After such review and consideration, the Committee selects, or recommends that our board of directors select, the slate of director nominees, either at a meeting of the Committee at which a quorum is present or by unanimous written consent of the Committee.



•

In evaluating and identifying candidates, the Committee has the authority to retain and terminate any third party search firm that is used to identify director candidates, and has the authority to approve the fees and retention terms of any search firm.



•

The Committee will endeavor to notify, or cause to be notified, all director candidates of its decision as to whether to nominate such individual for election to our board of directors.

Stockholder Communication with our Board of Directors

        Any stockholder may contact any of our directors by writing to them by mail c/o SuperGen, Inc., 4140 Dublin Boulevard, Suite 200, Dublin, California 94568.

        Any stockholder communications directed to our board of directors (other than concerns regarding questionable accounting or auditing matters directed to the Audit Committee or otherwise in accordance with our Financial Information Integrity Policy) will first go to our Corporate Secretary, who will log the date of receipt of the communication as well as (for non-confidential communications) the identity of the correspondent in our stockholder communications log.

        The Corporate Secretary will forward all such original stockholder communications to our board of directors for review.

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Code of Business Conduct and Ethics

        We have adopted a Code of Business Conduct and Ethics that applies to all directors, officers, and employees of SuperGen and our subsidiaries. A copy of the Code of Business Conduct and Ethics is available in the corporate governance section on our website at www.supergen.com .

Board Leadership Structure and Independent Lead Director

        Dr. Manuso serves as both our chairman of the board of directors and Chief Executive Officer ("CEO"). Our board of directors believes that independent oversight of management is an important component of an effective board of directors. The independent board members have determined that the most effective board leadership structure for SuperGen at the present time is for the CEO to also serve as chairman of the board of directors, a structure that has served SuperGen well for many years. The independent board members believe that because the CEO is ultimately responsible for the day-to-day operation of our company and for executing its strategy, and because the performance of our company is an integral part of board of directors deliberations, the CEO is the director best qualified to act as chairman of our board of directors. Our board of directors retains the authority to modify this structure to best address our company's unique circumstances, and so advance the best interests of all stockholders, as and when appropriate.

        Our board of directors also believes, for the reasons set forth below, that its existing corporate governance practices achieve independent oversight or management accountability, which is the goal that many seek to achieve by separating the roles of chairman of the board of directors and CEO. SuperGen's governance practices provide for strong independent leadership, independent discussion among directors and for independent evaluation of, and communication with, many members of senior management. These governance practices are reflected in our Corporate Governance Guidelines and the various committee charters, which are available on our website. Some of the relevant processes and other corporate governance practices include:

•

Our board of directors has an independent lead director with leadership authority and responsibilities. Walter J. Lack, chairman of the Governance and Nominating Committee, was selected by the independent board members to be the lead independent director. Our chairman of the board and our lead independent director together set the agenda for all board of directors meetings, and our lead independent director sets the agenda for, and leads, all executive meetings of the independent directors, providing consolidated feedback, as appropriate, from those meetings to our chairman and CEO. Our lead independent director also has the authority to call meetings of our board of directors in executive session; facilitates discussions, outside of scheduled board meetings, among the independent directors on key issues as required; and serves as a non-exclusive liaison with the chairman and CEO, in consultation with the other independent directors.



•

At each regularly scheduled board meeting, all non-management directors can meet in an executive session independent of any of our management. In these executive sessions, the independent directors can deliberate on such matters as CEO succession planning or the performance of our CEO.



•

All of our directors, except the chairman and CEO, are independent directors. Each director is an equal participant in decisions made by the full board of directors. The Audit, Compensation, and Governance and Nominating Committees, and the Pharmaceutical Sub-Committee, are all comprised of independent directors.



•

Each of our directors is elected annually by our stockholders. Our Corporate Governance Guidelines also ensure that the other independent members of the board are involved in key aspects of governance. Additionally, the chairman and CEO regularly solicits suggestions from

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the directors for presentations by management at board of directors and Committee meetings. Furthermore, each board member has full and free access to our management and employees.

The Board's Role in Risk Management Oversight

        Our management is responsible for the day to day assessment and management of the risks we face, while our board of directors administers its risk oversight function directly and through the Audit Committee. Management reports to our board of directors and/or the Audit Committee regarding identified or potential risks. The areas of material risk to our company include strategic, operational, financial, legal and regulatory risks. Our board of directors regularly reviews our company's strategies and attendant risks, and provides advice and guidance with respect to strategies to manage these risks while attaining long- and short-terms goals. Financial risks, including investment policies as well as overall economic risks, are the purview of our Audit Committee. The Audit Committee's review is accompanied by reports from management and assessments related to our internal control over financial reporting from our internal and external auditors. In assessing risks, the board of directors and the Audit Committee are advised by management, counsel and experts, as appropriate.

Attendance by Board Members at the Annual Meeting of Stockholders

        It is the policy of our board of directors to encourage board members to attend the annual meeting of stockholders. Four members of the board of directors attended our 2010 Annual Meeting of Stockholders.

Board Meetings and Committees

        During the year ended December 31, 2010, our board of directors held seven meetings. In addition, certain matters were approved by our board of directors or a committee of the board of directors by unanimous written consent. Each director is expected to attend each meeting of the board of directors and those committees on which he serves. During 2010, all of the directors attended 75% or more of the meetings of the board of directors and committees, if any, upon which such directors served.

        Our board of directors currently has four standing committees: the Audit, Compensation, and Governance and Nominating Committees and the Pharmaceutical Sub-Committee. Each committee has a written charter that has been approved by our board of directors, and all the charters are available in the corporate governance section of our website at www.supergen.com .

        Audit Committee.     The members of the Audit Committee are Mr. Casamento, Mr. Girardi, and Mr. Lack. Our board of directors has determined that each of the members of the Audit Committee is "independent," as defined under and required by the federal securities laws and the rules of the NASDAQ Stock Market, including Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our board of directors has determined that Mr. Casamento qualifies as an "audit committee financial expert" as that term is defined in Item 407(d) of Regulation S-K of the Securities Act of 1933, as amended, and has the "financial sophistication" required under the rules of the NASDAQ Stock Market. The Audit Committee reviews and monitors the corporate financial reporting, internal controls and the internal and external audits of our company, including, among other things, the audit and control functions, the results and scope of the annual audit and other services provided by our independent auditors, and our compliance with legal matters that have a significant impact on its financial reports. The Audit Committee meets independently with our independent auditors and our senior management and reviews the general scope of our accounting, financial reporting, annual audit and the results of the annual audit, interim financial statements, auditor independence issues, and the adequacy of the Audit Committee charter. The Audit Committee held five meetings during 2010. For more information regarding the functions performed by the Audit

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Committee, please see "Report of the Audit Committee of the Board of Directors," included in this proxy statement.

        Compensation Committee.     The Compensation Committee is currently composed of two independent directors, as defined in the applicable listing standards of the NASDAQ Stock Market: Mr. Girardi and Mr. Lack. The Compensation Committee reviews our executive compensation policy, including equity compensation for senior executives of the company, and makes recommendations to the board of directors regarding such matters. The role of the Compensation Committee is described in greater detail under the section of this proxy statement entitled "Compensation Discussion and Analysis." The Compensation Committee held two meetings during 2010 and approved several matters by unanimous written consent.

        Governance and Nominating Committee.     The Governance and Nominating Committee is composed of Mr. Casamento, Mr. Girardi, Dr. Goldberg, Mr. Lack, and Dr. Young. All Committee members are independent, as defined in the applicable listing standards of the NASDAQ Stock Market. The purpose of this Committee is to assist the board of directors in meeting appropriate governance standards. To carry out this purpose, the Committee's role is to: (1) develop and recommend to our board of directors the governance principles applicable to us; (2) oversee the evaluation of our board of directors and management; (3) recommend to our board of directors director nominees for each committee; (4) assist our board of directors by identifying prospective director nominees and determining the director nominees for the next annual meeting of stockholders and (5) manage and oversee the recruitment of successor CEO candidates. The Governance and Nominating Committee held one meeting during 2010.

        Pharmaceutical Sub-Committee.     The Pharmaceutical Sub-Committee is composed of Mr. Casamento, Dr. Goldberg, and Dr. Young. The purpose of the Pharmaceutical Sub-Committee is to assist our management and advise our board of directors regarding strategic initiatives, including product development, acquisition, financing or other similar strategic initiatives as may be directed by our board of directors from time to time. In addition, the Sub-Committee will undertake responsibilities and such other duties as our board of directors may from time to time prescribe. The Pharmaceutical Sub-Committee held four meetings during 2010. If the Transaction is completed, we expect to eliminate the Pharmaceutical Sub-Committee.

Director Compensation

        We use a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on our board of directors.

        Cash Compensation.     In 2010, non-employee directors of our company received cash compensation in accordance with the schedule noted below:

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*

The annual Board retainer was increased from $20,000 per year to $24,000 per year, effective July 1, 2010.

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        Directors are also reimbursed for all reasonable expenses incurred by them in attending board and committee meetings.

        Stock Options.     We previously granted non-employee directors stock options pursuant to our 1996 Directors' Stock Option Plan (the "Directors' Plan"). Under the Directors' Plan, each new non-employee director who joined our board of directors received an option to purchase 50,000 shares of our common stock. All options granted under the Directors' Plan vested as to 20% of the shares upon grant and as to 20% of the shares each year thereafter, provided that the non-employee director continues to serve as a director on such date. Each option has a term of ten years from the date of grant. The exercise price per share for all options granted under the Directors' Plan is 100% of the fair market value of our common stock on the date of grant. The Directors' Plan expired in 2006.

        In March 2010, our board of directors approved an annual grant, commencing in June 2010 and thereafter on the date of each annual meeting of stockholders, of stock options to each then-serving member of the board of directors, to purchase 15,000 shares of our common stock under our 2003 Stock Plan. Our board of directors previously approved, in 2007, 2008 and 2009, an annual grant on the date of each annual meeting of stockholders, of stock options to each then-serving member of the Audit Committee, Compensation Committee, and Pharmaceutical Sub-Committee, to purchase 10,000 shares of common stock under our 2003 Stock Plan.

        All annual options granted to board and committee members vest as to 25% of the shares on the date of grant and as to 25% of the shares on each three-month anniversary of the date of grant. Each option will have a term of ten years from the date of grant. The exercise price per share for all options granted will be 100% of the fair market value of our common stock on the date of grant.

        The vesting of all options held by members of our board of directors will accelerate in full in the event that, within twelve months following a change of control of our company, the optionee's status as a director is involuntarily terminated, and, in such event, the optionee will have the right to exercise such options within twelve months following the termination, or such lesser period as is the option term.

Director Summary Compensation Table for Fiscal Year Ended December 31, 2010

        The table below summarizes the compensation paid by the Company to non-employee directors for the fiscal year ended December 31, 2010.

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(1)

Reflects the aggregate grant date fair value using the Black-Scholes option pricing model for option awards granted during the year computed in accordance with ASC 718, Compensation-Stock Compensation. The assumptions used in the valuation of these awards are set forth in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 9, 2011. These amounts do not correspond to the actual value that could be realized by each director.

(2)

Includes grant date fair value of $20,000 for an option award as chairman of our Scientific Advisory Board.

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(3)

Represents cash fees paid as chairman of our Scientific Advisory Board.

(4)

Represents cash fees paid as interim Chief Medical Advisor.

        The following table sets forth option grants to non-employee directors/committee members during 2010:

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(1)

Option shares vest as to 25% of the shares on the date of the grant and as to 25% of the shares on each three-month anniversary thereafter.

(2)

The exercise price per share represents the fair market value on the date of grant as determined by the closing price of our common stock on the NASDAQ Stock Market.

(3)

Grant to non-employee director as chairman of the Company's Scientific Advisory Board.

(4)

Option vests as to 1/12 ^th  of the shares on August 26, 2010 and at the end of each full month thereafter.

(5)

Reflects the grant date fair value using the Black-Scholes option pricing model of each equity award computed in accordance with ASC 718. The assumptions used in the valuation of these awards are set forth in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 9, 2011. These amounts do not correspond to the actual value that could be realized by each director.

        As of December 31, 2010, each non-employee director had the following outstanding options to purchase shares of our common stock:

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This proxy statement (including information included in the documents accompanying this proxy statement) includes "forward-looking statements" (as that term is defined under Section 21E of the Exchange Act and/or the United States Private Securities Litigation Reform Act of 1995). There are forward-looking statements throughout this proxy statement, including, without limitation, under the headings "Questions and Answers about the Transaction and the annual meeting," "Risk Factors," and in statements containing words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "contemplate," "intend," "plan," "may," "will," "could," "should," "would," "believes," "predicts," "potential," "continue," and similar expressions which are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, SuperGen's expectations with respect to the synergies, costs and charges, and anticipated financial impacts of the Transaction; approval of the share issuances to Astex; the satisfaction of the closing conditions to the Transaction; and the timing of the closing; statements containing projections of revenues, operating expenses, income (or loss), earnings (or loss) per share, capital expenditures, and other financial items; statements concerning the plans and objectives of SuperGen management for future operations, including plans or objectives relating to its products or services; and any report issued by Houlihan Lokey, to the extent that the report assesses a forward-looking statement made by SuperGen.

        These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside our control and difficult to predict. Factors that may cause such differences include, but are not limited to:

•

the ability of SuperGen and Astex to satisfy all conditions precedent to the closing and consummate the Transaction;



•

the ability of SuperGen to integrate the assets and operations acquired from Astex successfully;



•

the ability of SuperGen to achieve the expected cost synergies and realize the benefits of the Transaction;



•

the ability of SuperGen to successfully develop and market drugs;



•

the ability of SuperGen to retain and continue to attract key employees of SuperGen and Astex;



•

unexpected costs or unexpected liabilities related to the Transaction;



•

other economic, business and competitive factors;



•

the impact of the trading price of SuperGen common stock caused by the share issuances to Astex shareholders or caused by future resales in the public market of the shares received by Astex shareholders in the Transaction;



•

the ability of Astex shareholders to exert significant influence over corporate decisions as a result of their ownership of SuperGen common stock following the Transaction and the right to designate four directors in the combined entity; and



•

the factors described below under "Risk Factors" and in SuperGen's reports filed with the SEC.

        SuperGen cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is discussed under the heading "Risk Factors" and elsewhere in this proxy statement and in documents accompanying this proxy statement, including, SuperGen's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 which was filed with the SEC on March 9, 2011. All subsequent written and oral forward-looking statements concerning SuperGen, the meeting, the Transaction, the related transactions or other matters attributable to SuperGen or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

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        These forward-looking statements speak only as of the date on which the statements were made and SuperGen expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statement included in this proxy statement or elsewhere, whether written or oral, relating to the matters discussed in this proxy statement.

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RISK FACTORS

         In addition to the other information included in documents delivered with this proxy statement, you should carefully consider the risk factors described below in evaluating whether to approve the share issuance to Astex shareholders, as well as the other proposals under consideration at the annual meeting. Additional risks and uncertainties not presently known to us or that are not currently believed to be material, if they occur, also may adversely affect the proposed Transaction and SuperGen, following the closing.

Risks Related to the Transaction

We may fail to realize some or all of the anticipated benefits of the proposed Transaction, which may adversely affect the value of our common stock.

        The success of the Transaction will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining SuperGen and Astex. However, to realize these anticipated benefits and cost savings, we must successfully combine the acquired business with our legacy operations and integrate our respective operations, technologies and personnel following the closing. If we are not able to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits and cost savings of the Transaction may not be realized fully or at all or may take longer to realize than expected and the value of SuperGen's common stock may be adversely affected. In addition, the overall integration of the businesses is a complex, time-consuming and expensive process that, without proper planning and effective and timely implementation, could significantly disrupt our operations following closing.

        We have operated and, until the closing, will continue to operate independently of Astex. It is possible that the integration process could result in the loss of key employees and other senior management, result in the disruption of our business or adversely affect our ability to maintain our research and development operations, or to otherwise achieve the anticipated benefits of the Transaction.

        Specifically, risks in integrating Astex into our operations in order to realize the anticipated benefits of the Transaction include, among other things:

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failure to effectively coordinate research and drug candidate development efforts to communicate our product capabilities and expected product roadmap following closing;



•

failure to compete effectively against companies already serving the broader market opportunities expected to be available to us and our expanded drug offerings;



•

failure to successfully integrate and harmonize financial reporting and information technology systems of SuperGen and Astex;



•

retaining Astex's relationships with pharmaceutical company partners;



•

integrating a senior management team from SuperGen and Astex, as well as integrating members from both companies on the board of directors of the post-closing company;



•

retaining key SuperGen employees and retaining and integrating key employees from Astex;



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coordinating research and development activities to enhance the introduction of new drug development methodologies and drug discovery platforms acquired in the Transaction;



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coordinating operations across time zones, continents and cultures;



•

managing effectively the diversion of management's attention from business matters to integration issues;

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combining research and development capabilities effectively and quickly;



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integrating partnership efforts so that new partners acquired with the Transaction can easily do business with us;



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transitioning all facilities to a common information technology environment; and



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combining our business culture with the business culture of Astex.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual cost synergies, if achieved at all, may be lower than we expect and may take longer to achieve than anticipated. If we are not able to adequately address these challenges, we may be unable to successfully integrate the operations of the business acquired from Astex into our own, or to realize the anticipated benefits of the integration following the closing. The anticipated benefits and synergies assume a successful integration and are based on projections, which are inherently uncertain, and other assumptions. Even if integration is successful, anticipated benefits and synergies may not be achieved. An inability to realize the full extent of, or any of, the anticipated benefits of the Transaction, as well as any delays encountered in the integration process, could have an adverse effect on our business and results of operations, which may affect the value of the shares of our common stock after the closing. Some examples of how we may not realize anticipated benefits include the risk of the following:

•

cost of development programs may be higher than forecasted;



•

forecasted milestones from collaborations may not be achieved and thus received as anticipated; and



•

exchange risk associated with any existing or anticipated cash denominated in another currency may reduce the expected value actually received when translated into sterling.

Failure to complete the Transaction could negatively impact our stock price and our future business and financial results.

        If the Transaction is not completed, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Transaction, we will be subject to a number of risks, including the following:

•

we may be required to pay Astex a termination fee of up to $6 million if the Transaction is terminated under certain circumstances;



•

we will be required to pay certain costs relating to the Transaction, including substantial legal, accounting and related consulting fees, whether or not the Transaction is completed;



•

under the Implementation Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Transaction that may affect our ability to execute certain of our business strategies; and



•

matters relating to the Transaction (including integration planning) may require substantial commitments of time and resources by our management, which could otherwise have been devoted to other opportunities that may have been beneficial to us as an independent company.

        We also could be subject to litigation related to any failure to complete the Transaction or related to any enforcement proceeding commenced against us to perform our obligations under the Implementation Agreement. If the Transaction is not completed, these risks may materialize and may adversely affect our business, financial results and stock price.

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We will incur significant Transaction and Transaction-related costs.

        We expect to incur a number of non-recurring costs associated with combining the operations of Astex with our own business. The substantial majority of non-recurring expenses resulting will be comprised of Transaction costs related to the execution of the Transaction, facilities and systems consolidation costs and employment-related costs. We will also incur Transaction fees and costs related to formulating integration plans. Additional unanticipated costs may be incurred in the integration of the businesses. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset incremental Transaction and Transaction-related costs over time, this net benefit may not be achieved in the near term, or at all.

We must continue to retain, motivate and recruit executives and other key employees, which may be difficult in light of uncertainty regarding the Transaction, and failure to do so could negatively affect our operations.

        For the Transaction to be successful, during the period before the Transaction is completed, we must continue to retain, motivate and recruit executives and other key employees. We also must be successful at retaining key employees following the closing. Experienced executives are in high demand and competition for their talents can be intense. Employees may experience uncertainty about their future role with us until, or even after, strategies with regard to our operations and product development following the closing are announced or executed. These potential distractions of the Transaction may adversely affect our ability to attract, motivate and retain executives and other key employees and keep them focused on applicable strategies and goals. A failure to retain and motivate executives and other key employees during the period prior to or after the closing could have a material and adverse impact on our business.

Some of our current directors and executive officers have interests in the Transaction that may differ from the interests of our stockholders, and these persons may have conflicts of interest in recommending to our stockholders that they approve of the share issuance to Astex.

        Some of the members of management and the SuperGen board of directors may have interests in the Transaction that differ from, or are in addition to, their interests as stockholders. These interests include:

•

the rights of certain officers to receive payments or other benefits, including grants of equity awards, following the closing; and



•

the continuing service of several of SuperGen's existing directors and executive officers following the closing.

        These interests could cause management or members of the SuperGen board of directors to have a conflict of interest in recommending approval of the share issuance to Astex to our stockholders.

Sales by former Astex securityholders of shares of our common stock acquired in the Transaction could cause our stock price to decrease.

        The sale of shares of common stock that certain Astex securityholders receive in the Transaction will be restricted by the terms of a lock-up agreement with us and, potentially, a coordinated selling agreement among those holders, but these shareholders may begin to sell 25% of these shares two months after the closing date, with another 25% of the shares to be released every two months until all shares are fully tradable after eight months of the closing date. The sale of a substantial number of shares of common stock by former Astex securityholders or by our other stockholders within a short period of time could cause our stock price to decrease, and make it more difficult for us to raise funds through future offerings of common stock.

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Our obligation to pay a termination fee under certain circumstances and the restrictions on our ability to solicit or engage in negotiations with respect to other acquisition proposals may discourage other transactions which may be favorable to our stockholders.

        Until the Transaction is completed or the Implementation Agreement is terminated, with limited exceptions, the Implementation Agreement prohibits us from entering into, soliciting or engaging in negotiations with respect to acquisition proposals or other business combinations with a party other than Astex. We have agreed to pay Astex a termination fee of $6 million under specified circumstances. These provisions could discourage other companies from proposing alternative transactions which may be more favorable to our stockholders than the Transaction.

SuperGen's existing stockholders will experience dilution of their percentage ownership of SuperGen common stock.

        Pursuant to the Implementation Agreement, SuperGen initially would be issuing new shares of common stock to certain Astex securityholders, which would represent approximately 35% of the total outstanding voting power of all SuperGen stockholders following the closing. The issuance of these shares would cause SuperGen's current stockholders to experience immediate and significant dilution in their percentage ownership of SuperGen's outstanding common stock. Moreover, our current stockholders would experience additional dilution in the event that our audit committee determines to pay some or all of the $30 million in deferred consideration in the form of shares of our common stock. We are also assuming certain outstanding options of Astex in the Transaction, if these options (as converted) were to be exercised, our existing stockholders would suffer additional dilution.

Following the closing, certain former Astex securityholders will hold over a third of the outstanding SuperGen common stock, which could limit the influence of SuperGen's other stockholders over the election of directors and other significant corporate actions or discourage third parties from proposing a change in our control.

        Immediately after the closing of the Transaction, certain former Astex securityholders, as a group comprised of approximately 13 entities (counting any affiliated shareholders as one entity) who previously held preferred shares in Astex, would own approximately 35% of the total outstanding shares of SuperGen common stock, and would have designated four of the members serving on the nine-member board of directors of the combined entity. Accordingly, as a group, if the former Astex shareholders do not sell their SuperGen shares received in the Transaction, they would be able to exert significant influence over the outcome of a range of corporate matters, including significant corporate transactions requiring a stockholder vote, such as a merger or a sale of the combined company or its assets. This potential concentration of ownership and influence in management and board decision-making could also harm the price of SuperGen common stock following the closing by, among other things, discouraging a potential acquirer from seeking to acquire shares of SuperGen common stock (whether by making a tender offer or otherwise) or otherwise attempting to obtain control of the combined company. If any of the deferred consideration were to be paid in shares of SuperGen common stock, although the size of the group of former Astex securityholders holding SuperGen shares would increase (due to the distribution of deferred consideration shares to ordinary shareholders as well as preferred shareholders), the expanded group would hold an even greater percentage of the outstanding post-closing stock of SuperGen; thereby exacerbating the risk of concentrated ownership.

        Furthermore, the ownership position of the former Astex securityholders could discourage a third party from proposing a change of control or other strategic transaction concerning SuperGen. As a result, our common stock could trade at prices that do not reflect a "control premium" to the same extent as do the stocks of similarly situated companies that do not have a group of stockholders with an ownership interest as large as the former Astex shareholders' collective ownership interest.

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Risks Related to SuperGen

Risks Related to Our Financial Condition and Common Stock

If Dacogen is not commercially successful, our future revenues would be limited and our business would be harmed.

        Dacogen is approved in the United States and has been granted Orphan Drug exclusivity by the FDA through May 2013, with potential extension to November 2013 with additional regulatory filings by Eisai, but there is no guarantee that new patients and physicians will continue to use it for the treatment of patients. Once the Orphan Drug exclusivity period ends, Dacogen may be susceptible to generic entry by other pharmaceutical companies. This type of generic market entry typically causes sales of the trade name drug to decline. If Eisai's sales of Dacogen decrease, our royalty revenue will decrease commensurately, and we cannot be assured that Eisai will commit the resources to expand sales of Dacogen. Currently, the royalty revenue we receive from Eisai is our primary source of revenue, and we are dependent on Dacogen royalty revenue to fund our operations.

        Dacogen is approved for the treatment of MDS in the United States and over 29 smaller countries globally, but is not yet approved in Europe or Japan. In July 2006, Eisai sublicensed Dacogen to Cilag, giving Cilag responsibility for conducting regulatory activities related to Dacogen and granting it exclusive development and commercialization rights in Europe and all territories outside North America. We received 50% of the $10 million upfront payment and, as a result of both the original agreement with Eisai and the sublicense with Cilag, may receive up to $17.5 million in future milestone payments upon achievement of global regulatory and sales targets. During 2010, Eisai completed a randomized Phase III clinical trial of Dacogen in elderly patients with AML and although the primary endpoint of the study was not met, a supplemental marketing application in the U.S. is planned for the first quarter of 2011. Cilag is also planning to submit a corresponding marketing application for Dacogen in Europe in 2011. However, if Dacogen is not approved for additional indications in the U.S. or is never approved in Europe or Japan, we will receive decreasing, and ultimately no, royalty payments from commercial sales by Cilag or Eisai for these territories and our future revenues and business will be harmed.

Our license agreement with Eisai may not produce the full financial benefits that we are anticipating, which could cause our business to suffer.

        We expect to record development and license revenue from payments made to us by Eisai upon the achievement of regulatory and commercialization milestones. However, we may never receive such payments because the milestones may never be achieved, either because of failure to secure regulatory approval of Dacogen in Europe or Japan, or due to Eisai's or Cilag's inability to expend the resources to grow or commence sales of Dacogen as prescribed by the license agreement. In addition, the license agreement provides that Eisai will pay us (1) a certain portion of revenues payable to Eisai as a result of Eisai sublicensing the rights to market, sell and/or distribute Dacogen, to the extent such revenues are in excess of the milestone payments already due to us under our agreement with Eisai, and (2) a 20% royalty increasing to a maximum of 30% on annual worldwide net sales of Decagon. We cannot guarantee that we will receive these payments, and we cannot be assured that Eisai will commit the resources to expand sales of Dacogen in North America, or that Cilag will commit the resources to sell it in Europe, Japan, and elsewhere, or that either company will be successful in doing so. Because we are heavily reliant on royalties and milestone payments relating to Dacogen to fund our operations, the failure to achieve the milestones and/or receive royalty revenue from sales of Dacogen would cause our business to suffer.

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Our collaborative relationship with GSK may not produce the financial benefits that we are anticipating, which could cause our business to suffer.

        Part of our strategy is to partner with, or out-license selective products to, other pharmaceutical companies in order to mitigate the cost of developing a drug through clinical trials to commercialization. The agreement with GSK is an example of this strategy, providing for the joint development of compounds that we will discover using our CLIMB technology, followed by the option for GSK to take one or more of the jointly developed compounds and further develop, commercialize, and sell the resulting product worldwide. The agreement provides for milestone payments to be paid to us during the development process, but the majority of the payments will not occur unless and until GSK exercises its option to license one or more compounds from us. We will spend our own cash and other resources during the joint development process, and we cannot guarantee that any successful compounds will result from our joint development efforts. Further, even if we discover and develop one or more viable compounds, we cannot guarantee that GSK will exercise its option to license any such compounds from us. If GSK chooses not to exercise its license option, we may continue to develop the compounds on our own, but the post-option exercise developmental and sales milestones described in the agreement, which we have estimated to be approximately $300 million, plus additional royalty revenues, will never be realized. If our joint development program with GSK is not successful, and if we cannot earn revenue from collaborative arrangements such as this agreement, our future revenues and business will be harmed.

We have a history of operating losses and we may incur losses for the foreseeable future.

        Since inception, we have funded our research and development activities primarily from private placements and public offerings of our securities, milestone and other payments from collaborators, sales of our products, royalty revenue, and product revenues primarily from sales of Nipent. The North American rights to Nipent were sold in August 2006 and we sold the remaining worldwide rights in April 2007. Our substantial research and development expenditures and limited revenues have resulted in significant net losses. We have incurred cumulative losses of $340.3 million from inception through December 31, 2010, and we have not generated sufficient revenues to support our business during that time. We expect to be close to break-even or have modest operating income over the next few years and, although we were profitable in the years ended December 31, 2009 and 2010, we may never achieve sustained profitability.

        Whether we achieve sustained profitability depends primarily on the following factors:

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successful sales of Dacogen in North America by Eisai;



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obtaining regulatory approval in Europe and Asia and the successful commercialization of Dacogen outside of North America by Cilag;



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limiting or preventing delays in production of Dacogen;



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the success of our joint development program with GSK and whether GSK exercises its option to further develop and commercialize any of the compounds resulting from the joint development effort;



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our ability to discover and develop additional novel therapeutics that might advance through our internal clinical development infrastructure;



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our research and development efforts, including the timing and costs of clinical trials;



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our competition's ability to develop and bring to market competing products;

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our ability to control costs and expenses associated with the discovery, development, and manufacturing of our novel compounds, as well as general and administrative costs related to conducting our business; and



•

costs and expenses associated with entering into and performing under licensing, joint development, and other collaborative agreements.

        Our products and product candidates, even if successfully developed and approved, may not generate sufficient or sustainable revenues to enable us to achieve or sustain profitability.

We will require additional funding to expand our product pipeline and commercialize new drugs, and if we are unable to raise the necessary capital or to do so on acceptable terms, our planned expansion and continued chances of survival could be harmed.

        We will continue to spend substantial resources on expanding our product pipeline, developing future products, and conducting research and development, including clinical trials for our product candidates. Based on our currently forecasted product development activities without consideration of the contemplated transaction with Astex, we anticipate that our capital resources will be adequate to fund operations and capital expenditures at least through 2012. However, if we experience unanticipated cash requirements during this period, we could require additional funds much sooner. In February 2009 we filed a $100 million shelf registration statement on Form S-3 with the SEC, which gives us the flexibility to raise funds through the sale of a variety of securities. We may raise money by the sale of our equity securities or debt, or the exercise of outstanding stock options by the holders of such options. However, given uncertain market conditions and the volatility of our stock price, we may not be able to sell our securities in public offerings or private placements at prices and/or on terms that are favorable to us, if at all. Also, the dilutive effect of additional financings could adversely affect our per share results. We may also choose to obtain funding through licensing and other contractual agreements. For example, we licensed the worldwide rights to the development, commercialization and distribution of Dacogen to Eisai. Such arrangements may require us to relinquish our rights to our technologies, products or marketing territories, or to grant licenses on terms that are not favorable to us. If we fail to obtain adequate funding in a timely manner, or at all, we will be forced to scale back our product development activities, or be forced to cease our operations.

Our equity investment in AVI BioPharma Inc. ("AVI") exposes us to equity price risk and any impairment charge would affect our results of operations.

        Our investments in marketable securities are carried at fair value with unrealized gains and losses included in accumulated other comprehensive gain or loss in stockholders' equity. However, we are exposed to equity price risk on our equity investment in AVI. The public trading prices of the AVI shares have fluctuated significantly since we purchased them and could continue to do so. If the public trading prices of these shares trade below their adjusted cost basis in future periods, we may incur additional impairment charges relating to this investment, which in turn will affect our results of operations.

        Currently we own 2.4 million shares of AVI and recorded an other-than-temporary decline in value of $3.1 million related to this investment during the year ended December 31, 2008. We evaluate investments with unrealized losses to determine if the losses are other than temporary. In making these determinations, we consider the financial condition and near-term prospects of the issuers, the magnitude of the losses compared to the investments' cost, the length of time the investments have been in an unrealized loss position, and our ability and intent to hold the investments for a reasonable period of time sufficient for a recovery of fair value. It is possible that we may record another other than temporary decline in value related to AVI in the future.

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Product Development and Regulatory Risks

Our product candidates will require significant additional development.

        Many of our product candidates are in the development, rather than the clinical trial stage. However, we must significantly develop all of our product candidates before we can market them, or before they will become desirable for partnering or licensing. Although we believe that our preclinical and pilot clinical studies support further development of these product candidates, the results we have obtained to date do not necessarily indicate what the results of further testing would be, including controlled human clinical testing. All of the product candidates that we are currently developing will require extensive clinical testing before we can submit any regulatory application for their commercial use.

Our product development efforts may ultimately fail.

        Our product candidates are subject to the risks of failure inherent in the development of pharmaceutical products. These risks include the following:

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some of our product candidates may be found to be unsafe or ineffective, or may fail to receive the necessary regulatory clearances in a timely manner, if at all;



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even if safe and effective, our product candidates may be difficult to manufacture on a large scale or may be uneconomical to market;



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the proprietary rights of third parties may preclude us from marketing such products; and



•

third parties may market more effective or less costly products for treatment of the same diseases.

        As a result, we cannot be certain that any of our products will be successfully developed, receive required governmental approvals on a timely basis, become commercially viable or achieve market acceptance.

Before we can seek regulatory approval of any of our product candidates, we must complete clinical trials, which are expensive and have uncertain outcomes.

        All of our product candidates will require the commitment of substantial resources and regulatory approval. Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through non-clinical testing and clinical trials that our product candidates are safe and effective for use in humans.

        We have a portfolio of cancer drugs in various stages of development. We are currently conducting clinical trials on our products amuvatinib and SGI-110. We also expect to commence other new clinical trials from time to time in the course of our business as our product development work continues. Conducting clinical trials is a lengthy, time consuming and expensive process and the results are inherently uncertain. We have incurred and will continue to incur substantial expense for, and we have devoted and expect to continue to devote a significant amount of time to, non-clinical testing and clinical trials. However, regulatory authorities may not permit us to undertake any additional clinical trials for our product candidates. If we are unable to complete our clinical trials, our business will be severely harmed and the price of our stock will likely decline.

        We also have ongoing research and non-clinical projects that may lead to product candidates, but we have not begun clinical trials for these projects. If we do not successfully complete our non-clinical trials, we might not be able to commence clinical trials as planned.

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Our clinical trials may be delayed or terminated, which would prevent us from seeking necessary regulatory approvals.

        Completion of clinical trials may take several years or more. The length of a clinical trial varies substantially according to the type, complexity, novelty and intended use of the product candidate. The length of time and complexity of these studies make statistical analysis difficult and regulatory approval unpredictable. The commencement and rate of completion of our clinical trials may be delayed by many factors, including:

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ineffectiveness of the study compound, or perceptions by physicians that the compound is not effective for a particular indication;



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inability to manufacture sufficient quantities of compounds for use in clinical trials;



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inability to obtain FDA approval of our clinical trial protocols;



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slower than expected rate of patient recruitment;



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inability to adequately follow patients after treatment;



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difficulty in managing multiple clinical sites;



•

unforeseen safety issues;



•

lack of efficacy demonstrated during the clinical trials; or



•

governmental or regulatory delays.

        If we are unable to achieve a satisfactory rate of completion of our clinical trials, our business will be significantly harmed.

We may be required to suspend, repeat or terminate our clinical trials if they are not conducted in compliance with regulatory requirements.

        Our clinical trials must be conducted in accordance with the requirements of the FDA and other regulatory authorities, and are subject to continuous oversight by these authorities, and institutional review boards and ethical committees. We outsource certain aspects of our research and development activities to contract research organizations ("CROs"). We have agreements with these CROs for certain of our clinical programs. We and our CROs are required to comply with GCP regulations and guidelines for all of our products in clinical development. GCPs are enforced through periodic inspections of study sponsors, principal investigators, and study sites. If our CROs or we fail to comply with applicable GCPs, the clinical data generated in our studies may be deemed unreliable and regulatory authorities may require us to perform additional studies before approving our applications. Our non-clinical safety studies must be conducted according to the principles of GLP regulations. In addition, our clinical trials must be conducted with product candidates produced under current GMPs, and may require a large number of test subjects. Our failure to comply with these regulations may require us to repeat clinical studies, which would delay the regulatory approval process.

We may be required to suspend, repeat or terminate our clinical trials if later trial results fail to demonstrate safety and efficacy, or if the results are negative or inconclusive.

        Our clinical trials may be suspended at any time if we or the FDA believe the patients participating in our studies are exposed to unacceptable health risks or if we or the FDA find deficiencies in the conduct of these trials. Adverse medical events during a clinical trial could cause us to terminate or repeat a clinical trial. In 2010, we terminated clinical trials for SGI-1776 due to safety concerns.

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        We may encounter other problems and failures in our studies that would cause us or the FDA to delay or suspend the studies. Even if we achieve positive interim results in clinical trials, these results do not necessarily predict final results, and acceptable results in early trials may not be repeated in later trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after achieving promising results in earlier trials.

        Negative or inconclusive results during a clinical trial could cause us to terminate or repeat a clinical trial. The potential failures would delay development of our product candidates, hinder our ability to conduct related non-clinical testing and clinical trials and further delay the commencement of the regulatory approval process. Further, the failures or perceived failures in our clinical trials would delay our product development and the regulatory approval process, damage our business prospects, make it difficult for us to establish collaboration and partnership relationships and negatively affect our reputation and competitive position in the pharmaceutical industry. Finally, if we are required to conduct other clinical trials for the product candidates, the additional trials would require substantial funding and time, and we may be unable to obtain funding to conduct such clinical trials.

Our failure to obtain regulatory approvals to market our product candidates in foreign countries and delays caused by government regulation would adversely affect our anticipated revenues.

        Sales of our products in foreign jurisdictions will be subject to separate regulatory requirements and marketing approvals. Approval in the United States, or in any one foreign jurisdiction, does not ensure approval in any other jurisdiction. The process of obtaining foreign approvals may result in significant delays, difficulties and expenses for us, and may require additional clinical trials. Although many of the regulations applicable to our products in these foreign countries are similar to those promulgated by the FDA, many of these requirements also vary widely from country to country, which could delay the introduction of our products in those countries. Failure to comply with these regulatory requirements or to obtain required approvals would impair our ability to commercialize our products in foreign markets.

        Even if regulatory approval of our products is obtained, later discovery of previously unknown problems may result in restrictions of a product, including withdrawal of that product from the market. Further, governmental approval may subject us to ongoing requirements for post-marketing studies. For example, despite receipt of governmental approval, the facilities of our third-party manufacturers are still subject to unannounced inspections by the FDA and must continue to comply with GMPs and other regulations. These regulations govern all areas of production, record keeping, personnel and quality control. If we or our third-party manufacturers fail to comply with any of the manufacturing regulations, we may be subject to, among other things, product seizures, recalls, fines, injunctions, suspensions or revocations of marketing licenses, operating restrictions and criminal prosecution.

If we are unable to comply with environmental laws and regulations, our business may be harmed.

        We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous materials and waste products. We currently maintain a supply of biohazardous materials at some of our facilities. We believe our safety procedures for these materials comply with all applicable environmental laws and regulations, and we carry insurance coverage we believe is adequate for the size of our business. However, we cannot entirely eliminate the risk of accidental contamination or injury from these materials. If an accident or environmental discharge occurs, we could be held liable for any resulting damages, which could exceed our insurance coverage and financial resources.

        We currently outsource certain of our research and development programs involving the controlled use of biohazardous materials. We believe our collaborators have in place safety procedures for these

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materials that comply with governmental standards. Nevertheless, if an accident does occur, our research and product development will be negatively affected.

Additional Risks Associated with Our Business

If the third-party manufacturers upon whom we rely fail to produce our products in the volumes that we require on a timely basis, or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the delivery of, or be unable to meet demand for, our products.

        Because we have no manufacturing facilities, we rely on third parties for manufacturing activities related to all of our product candidates. As we develop new products, we must establish and maintain relationships with manufacturers to produce and package sufficient supplies of our finished pharmaceutical products. Reliance on third party manufacturing presents the following risks:

•

delays in scale-up to quantities needed for multiple clinical trials, or failure to (a) manufacture such quantities to our specifications or (b) deliver such quantities on the dates we require, which could cause delay or suspension of clinical trials, regulatory submissions and commercialization of our products;



•

potential relinquishment or sharing of intellectual property rights to any improvements in the manufacturing processes or new manufacturing processes for our products; and



•

unannounced ongoing inspections by the FDA and corresponding state agencies for compliance with GMPs, regulations and foreign standards, and failure to comply with any of these regulations and standards may subject us to, among other things, product seizures, recalls, fines, injunctions, suspensions or revocations of marketing licenses, operating restrictions and criminal prosecution.

        Any of these factors could delay clinical trials or commercialization of our product candidates under development, and entail higher costs.

Our business may be harmed if the manufacture of our products is interrupted or discontinued.

        We may be unable to maintain our relationships with our third-party manufacturers. If we need to replace or seek new manufacturing arrangements, we may have difficulty locating and entering into arrangements with qualified contract manufacturers on acceptable terms, if at all. We are aware of only a limited number of companies on a worldwide basis who operate manufacturing facilities in which our products can be manufactured to our specifications and in compliance with GMPs. It could take several months, or significantly longer, for a new contract manufacturing facility to obtain FDA approval and to develop substantially equivalent processes for the production of our product candidates. We may not be able to contract with any of these companies on acceptable terms, if at all.

If our suppliers cannot provide the components we require, our future product sales and revenue could be harmed.

        We rely on third-party suppliers to provide us with numerous components used in our products under development. Relying on third-party suppliers makes us vulnerable to component failures and interruptions in supply, either of which could impair our ability to conduct clinical trials on a timely basis. Using third-party suppliers makes it difficult and sometimes impossible for us to maintain quality control, manage inventory and production schedules and control production costs. Vendor lead times to supply us with ordered components vary significantly and can exceed six months or more. Both now and as we expand our need for manufacturing capacity, we cannot be sure that our suppliers will furnish us with required components when we need them. These factors could make it difficult for us to effectively and efficiently manufacture our products, and could adversely impact our clinical trials, product development and future sales of our products.

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        Some suppliers may be our only source for a particular component, which would make us vulnerable to cost increases and supply interruptions. We generally rely on one manufacturer for each product.

        Vendors may decide to limit or eliminate sales of certain products to the medical industry due to product liability or other concerns. In the event one of our sole source suppliers decides not to manufacture the component, goes out of business, or decides to cut off our supply, we may be unable to locate replacement supply sources, or the sources that we may locate may not provide us with similar reliability or pricing and our business could suffer. If we cannot obtain a necessary component, we may need to find, test and obtain regulatory approval for a replacement component, produce the component or redesign the related product, which would cause significant delay and could increase our manufacturing costs. Any of these events could adversely impact our future sales and results of operations.

If we are not able to maintain and successfully establish new collaborative and licensing arrangements with third parties, our product development and business will be harmed.

        Our business model is based on establishing collaborative relationships with other parties both to license compounds upon which our products and technologies are based and to manufacture our products or our collaborators' products. It is critical that we gain access to compounds and technologies to license for further development. Due to the expense of the drug approval process we must have relationships with established pharmaceutical companies to offset some of our development costs in exchange for a combination of development, marketing and distribution rights. For example, in our collaborative relationship with GSK, we expect to offset the costs of further development of the drugs we jointly develop with GSK, if and when GSK exercises its option to license such jointly developed drugs.

        From time to time we enter into discussions with various companies regarding the establishment of new collaborations. If we are not successful in establishing new partners for our product candidates, we may not be able to pursue further development of such product candidates and/or may have to reduce or cease our current development programs, which would materially harm our business. Even if we are successful in establishing new collaborations, they are subject to numerous risks and uncertainties including:

•

our ability to negotiate acceptable collaborative arrangements;



•

the collaboration making us less attractive to potential acquirers;



•

freedom of our collaborative partners to pursue alternative technologies either on their own or with others, including our competitors, for the diseases targeted by our programs and products;



•

the potential failure of our partners to fulfill their contractual obligations or their decision to terminate our relationships, in which event we may be required to seek other partners, or expend substantial resources to pursue these activities independently; and



•

our ability to manage, interact and coordinate our timelines and objectives with our collaborative partners may not be successful.

        In addition, our collaborators may undergo business combinations, which could have the effect of making the collaboration with us less attractive to them for a number of reasons. For example, if an existing collaborator purchases a company that is one of our competitors, that company may be less willing to continue its collaboration with us. A company that has a strategy of purchasing companies with attractive technologies might have less incentive to enter into a collaboration agreement with us. Moreover, disputes may arise with respect to the ownership of rights to any technology or products developed with any current or future collaborator. Lengthy negotiations with potential collaborators or

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disagreements between us and our collaborators may lead to delays in or termination of the research, development or commercialization of product candidates or result in time consuming and expensive litigation or arbitration.

Our collaborative relationships with third parties could cause us to expend significant funds on development costs with no assurance of financial return.

        From time to time we enter into collaborative relationships with third parties to co-develop and market products, such as our relationship with GSK. These relationships require substantial financial commitments from us, and at the same time the product developments are subject to the same regulatory requirements, risks and uncertainties associated with the development of our other product candidates. The compounds that are the subject of these collaborative agreements may prove to be ineffective, may fail to receive regulatory approvals, may be unprotectable by patents or other intellectual property rights, or may not be otherwise commercially viable. If these collaborative relationships are not successful, our product developments will be adversely affected, and our investments and efforts devoted to the product developments will be wasted.

Our ability to protect our intellectual property rights will be critically important to the success of our business, and we may not be able to protect these rights in the United States or abroad.

        The success of our operations depends in part on our ability to obtain patents, protect trade secrets, operate without infringing the proprietary rights of others and enforce our proprietary rights against accused infringers.

        We actively pursue a policy of seeking patent protection when applicable for our proprietary products and technologies, whether they are developed in-house or acquired from third parties. We attempt to protect our intellectual property position by filing United States and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business. To date, we have ownership of or acquired licenses to numerous patents covering various aspects of our proprietary drugs and technologies. In addition, we are prosecuting a number of patent applications for new drug candidates that we are actively developing at this time.

        We also have patents, licenses to patents, and pending patent applications in Europe, Australia, Japan, Canada, China and Israel among other countries. Limitations on patent protection, and the differences in what constitutes patentable subject matter, may limit the protection we have on patents issued or licensed to us in these countries. In addition, laws of foreign countries may not protect our intellectual property to the same extent as would laws in the United States. In determining whether or not to seek patent protection or to license any patent in a foreign country, we weigh the relevant costs and benefits, and consider, among other things, the market potential and profitability, the scope of patent protection afforded by the law of the jurisdiction and its enforceability, and the nature of terms with any potential licensees. Failure to obtain adequate patent protection for our proprietary drugs and technology would impair our ability to be commercially competitive in these markets.

        The pharmaceutical industry is characterized by a large number of patent filings involving complex legal and factual questions, and therefore we cannot predict with certainty whether our patents will be enforced effectively. Competitors may have filed applications for, or been issued patents on, products or processes that compete with or are similar to ours. We may not be aware of all of the patents potentially adverse to our interests which may have been issued to others. In addition, third parties may challenge, invalidate or circumvent any of our patents. Thus, any patents that we own or license from third parties may not provide adequate protection against competitors, if at all. Our pending patent applications and those we may file in the future, or those we may license from third parties, may not result in patents being issued with adequate claim scope, if at all.

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        In addition to pursuing patent protection in appropriate instances, we also rely on trade secret protection or regulatory marketing exclusivity for unpatented proprietary technology. However, trade secrets are difficult to protect. Our trade secrets or those of our collaborators may become known or may be independently discovered by others. Furthermore, regulatory marketing exclusivity is for a limited time period, which may not be an adequate period for our business interests.

        In the pharmaceutical industry there has been, and we believe that there will continue to be, significant litigation regarding patent and other intellectual property rights. Claims may be brought against us in the future based on patents held by others. These persons could bring legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected product. If we become involved in litigation, it could consume a substantial portion of our resources, regardless of the outcome of the litigation. If a lawsuit against us is successful, in addition to any potential liability for damages, we could be required to obtain a license to continue to manufacture or market the affected product. We cannot assure you that we would prevail in a lawsuit filed against us or that we could obtain any licenses required under any patents on acceptable terms, if at all.

        Our proprietary products are dependent upon compliance with other licenses and agreements. These licenses and agreements require us to make royalty and other payments, reasonably exploit the underlying technology of the applicable patents, and comply with regulatory filings. If we fail to comply with these licenses and agreements, we could lose the underlying rights to one or more of these potential products, which would adversely affect our product development and harm our business.

If we fail to compete effectively against other pharmaceutical companies, our business will suffer.

        The pharmaceutical industry in general and the oncology sector in particular is highly competitive and subject to significant and rapid technological change. There are many companies, both public and private, including well-known pharmaceutical companies that are engaged in the discovery and development of products for some of the applications that we are pursuing. Some of our competitors and probable competitors include ArQule, Array BioPharma, Astex Tx, Crystal Genomics, Exelixis, Infinity, Plexxikon, Vertex, Sanofi-Aventis, Bristol-Myers Squibb Company, Celgene, Eli Lilly & Co., GSK, Novartis AG, Pfizer, and others.

        Many of our competitors have substantially greater financial, research and development, and manufacturing resources than we do and may represent substantial long-term competition for us. Some of our competitors have received regulatory approval for products or are developing or testing product candidates that compete directly with our product candidates. For example, amuvatinib faces competition from a multitude of other investigational drugs which are multi-targeted tyrosine kinase inhibitors and inhibitors of the DNA repair pathway. We also expect that there will be other inhibitors of PIM kinases that will emerge as competition for investigational drugs progressing through our discovery pipeline. In addition, Dacogen faces competition from 5-aza-cytidine and other drugs in development to treat MDS.

        Many of these competitors, either alone or together with their customers and partners, have significantly greater experience than we do in discovering products, undertaking non-clinical testing and clinical trials, obtaining FDA and other regulatory approvals, and manufacturing and marketing products. Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA or foreign marketing approval or commercializing products before we do. If we elect to commence commercial product sales of our product candidates, we could be at a disadvantage relative to many companies with greater marketing and manufacturing capabilities, in areas that we may have limited or no experience.

        Factors affecting competition in the pharmaceutical industry vary depending on the extent to which competitors are able to achieve an advantage based on superior differentiation of their products, greater institutional knowledge, or depth of resources. If we are able to establish and maintain a

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competitive advantage based on the ability of CLIMB to discover new drug candidates more quickly and against targets not accessible by many competitors, our advantage will likely depend primarily on the ability of our CLIMB technology to make accurate predictions about the effectiveness and safety of our drug candidates as well as our ability to effectively and rapidly develop investigational drugs.

        Extensive research and development efforts and rapid technological progress characterize the industry in which we compete. Although we believe that our proprietary drug discovery capabilities afford us a competitive advantage relative to other discovery and development companies competing in oncology, we expect competitive intensity in this pharmaceutical segment to continue and will increase over time. Discoveries by others may render CLIMB and our current and potential products noncompetitive. Our competitive position also depends on our ability to attract and retain qualified scientific and other personnel at all our geographic locations, develop effective proprietary products, implement development plans, obtain patent protection and secure adequate capital resources.

The pharmaceutical industry in general and the oncology sector in particular is subject to significant and rapid technological change. Developments by competitors may render our product candidates or technologies obsolete or non-competitive.

        Our competitors may succeed in developing technologies or products that are more effective than ours. Additionally, our products that are under patent protection face intense competition from competitors' proprietary products. This competition may increase as new products enter the market.

        A number of our competitors have substantially more capital, research and development, regulatory, manufacturing, marketing, human and other resources and experience than we have. As a result, our competitors may:

•

develop products that are more effective or less costly than any of our current or future products or that render our products obsolete;



•

produce and market their products more successfully than we do;



•

establish superior proprietary positions; or



•

obtain FDA or foreign regulatory approval for labeling claims that are more favorable than those for our products.

        We will also face increasing competition from lower-cost generic products after patents on our proprietary products expire. Loss of patent protection typically leads to a rapid decline in sales for that product and could affect our future results. As new products enter the market, our products may become obsolete or our competitors' products may be more effective or more effectively marketed and sold than our products. Technological advances, competitive forces and loss of intellectual property protection rights for our products may render our products obsolete.

We may be subject to product liability lawsuits and our insurance may be inadequate to cover damages.

        Clinical trials and commercial use of our current and potential products may expose us to liability claims from the use or sale of these products. Consumers, healthcare providers, pharmaceutical companies and others selling such products might make claims of this kind. We may experience financial losses in the future due to product liability claims. We have obtained limited product liability insurance coverage for our products and clinical trials, under which the coverage limits are $10 million per occurrence and $10 million in the aggregate. We do not know whether this coverage will be adequate to protect us in the event of a claim. We may not be able to obtain or maintain insurance coverage in the future at a reasonable cost or in sufficient amounts to protect us against losses. If third parties bring a successful product liability claim or series of claims against us for uninsured liabilities or in excess of insured liabilities, we may not have sufficient financial resources to complete development

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or commercialization of any of our product candidates and our business and results of operations will be adversely affected.

If we are unable to attract and retain additional, highly skilled personnel required for the expansion of our activities, our business will suffer.

        Our success is dependent on key personnel, including members of our senior management and scientific staff at all our geographic locations. If any of our executive officers decides to leave and we cannot locate a qualified replacement in time to allow a smooth transition, our business may be adversely affected. To successfully expand our operations, we will need to attract and retain additional highly skilled individuals, particularly in the areas of clinical administration, non-clinical and development research, manufacturing and finance. We compete with other companies for the services of existing and potential employees, however to the extent these employees favor larger, more established employers, we may be at a disadvantage.

Earthquake or other natural or man-made disasters and business interruptions could adversely affect our business.

        Our operations are vulnerable to interruption by fire, power loss, floods, telecommunications failure and other events beyond our control. In addition, our operations are susceptible to disruption as a result of natural disasters such as earthquakes. So far we have never experienced any significant disruption of our operations as a result of earthquakes, other natural disasters, or any man-made disasters. Although we have a contingency recovery plan, any significant business interruption could cause delays in our drug development and future sales and harm our business.

Provisions in our certificate of incorporation, bylaws and applicable Delaware law may prevent or discourage third parties or stockholders from attempting to replace our management.

        Anti-takeover provisions of our certificate of incorporation and bylaws make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. These provisions include:

•

authorization of the issuance of up to 2,000,000 shares of our preferred stock;



•

elimination of cumulative voting; and



•

elimination of stockholder action by written consent.

        Our bylaws establish procedures, including notice procedures, with regard to the nomination, other than by or at the direction of our board of directors, of candidates for election as directors or for stockholder proposals to be submitted at stockholder meetings.

        We are also subject to Section 203 of the Delaware General Corporation Law, an anti-takeover provision. In general, Section 203 of the Delaware General Corporation Law prevents a stockholder owning 15% or more of a corporation's outstanding voting stock from engaging in business combinations with a Delaware corporation for three years following the date the stockholder acquired 15% or more of a corporation's outstanding voting stock. This restriction is subject to exceptions, including the approval of the board of directors and of the holders of at least two-thirds of the outstanding shares of voting stock not owned by the interested stockholder.

        We believe that the benefits of increased protection of our potential ability to negotiate with the proponents of unfriendly or unsolicited proposals to acquire or restructure us outweigh the disadvantages of discouraging those proposals because, among other things, negotiation of those proposals could result in an improvement of their terms. Nevertheless, these provisions are expected to discourage different types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of our company to first negotiate with us, and may have the effect of preventing or discouraging third parties or stockholders from attempting to replace our management.

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THE TRANSACTION

         The following discussion summarizes the material terms of the Transaction. Stockholders should read the Implementation Agreement and the schedules and exhibits attached to it, which are collectively attached as Appendix A to this proxy statement, carefully and in their entirety.

General Description of the Transaction

        SuperGen and Astex have entered into an Implementation Agreement pursuant to which SuperGen intends to acquire Astex through a scheme of arrangement in the United Kingdom. The scheme of arrangement is a court process under the laws of the United Kingdom, which, if successfully completed, would result in the cancellation of all currently outstanding Astex shares of capital stock and with Astex becoming a wholly owned subsidiary of SuperGen. Shortly after the closing of the Transaction, SuperGen intends to change its name to Astex Pharmaceuticals, Inc. In exchange for the existing Astex shares, SuperGen would pay to the shareholders of Astex both initial consideration (consisting of cash and stock) and deferred consideration (consisting of cash, stock or a combination of cash and stock). We believe that through this Transaction, SuperGen will emerge as an industry leader in oncology drug development, which we have identified as our top strategic priority.

        The initial consideration, payable at the closing of the Transaction, would consist of $25 million in cash and a number of shares of SuperGen common stock equal to 35% of the issued and outstanding stock of SuperGen as of the closing after giving effect to the issuance of the new shares. The deferred consideration payable by SuperGen is equal to a total of $30 million and would be payable in cash, SuperGen common stock, or a combination of cash and SuperGen common stock. The form of deferred consideration payment is left to the discretion of the SuperGen audit committee. The timing of the deferred consideration payment is variable depending on the achievement of certain milestones, but the full amount would be paid no later than 30 months after the closing of the Transaction, with a minimum of $15 million payable on the 18-month anniversary of the Transaction closing date and any remaining unpaid amount of the $30 million of deferred consideration payable on the 30-month anniversary of the closing date of the Transaction. The exact timing of the deferred consideration payments would be determined according to the terms of the Implementation Agreement, which provides that payments may be accelerated in the event that specific milestones are met. In no event however would we issue to former Astex securityholders more than 52.5 million shares of SuperGen common stock (including both shares required to be issued as initial consideration and shares potentially issuable as deferred consideration).

        Finally, we will assume all of Astex's currently outstanding options and warrants. In the aggregate, if all assumed options and warrants were exercised following the closing, we would not expect that total number of shares of SuperGen common stock issuable upon such exercise to exceed 2.5 million shares of our common stock.

Background to the Transaction

        On an ongoing basis, SuperGen has monitored the marketplace concerning strategic opportunities to strengthen our business, and specifically ramped up this review since 2005. We periodically have considered possible mergers with and acquisitions of complementary businesses, technologies and/or products would expand our offerings and generate additional revenue. We originally became interested in Astex in early 2009 as part of this process, specifically because we believed that their high throughput crystallography and fragment-chemistry based drug discovery process represented a best-in-class technology that was complementary to our established drug development capabilities. In addition, we sought more clinical-stage assets that would not deplete unduly our cash reserves, while also offering a possible vehicle for generating future revenue stream to offset the lapsing of Dacogen's Orphan Drug designation in the U.S. in November 2013. Finally, the number and nature of Astex's corporate partnerships and potential resulting revenue streams were compelling to us. Astex initially

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appeared to fulfill these criteria, and a strategic combination was expected to allow us to enhance our product development and productivity from our current capacity. As part of the process of considering this strategic business combination, beginning in January 2009, Dr. James S.J. Manuso, President, Chief Executive Officer and Chairman of the board of directors of SuperGen, had several exploratory telephone conversations and meetings with Dr. Harren Jhoti, Chief Executive Officer of Astex regarding SuperGen's potential interest in a strategic business combination with Astex after which Dr. Manuso provided an overview of these conversations to the SuperGen board members.

        In February 2009, Dr. Manuso and Dr. Jhoti spoke about the potential of a transaction and scheduled a meeting on March 19, 2009 between senior management from SuperGen and Astex in London, U.K. On February 23, 2009, Dr. Manuso and Dr. Jhoti spoke about general terms of the potential strategic transaction and had continuing communications about the exchange of information that would be useful in advance of the March 19 meeting. On February 24, 2009, John Aston, Chief Financial Officer of Astex, and Michael Molkentin, Chief Financial Officer of SuperGen, exchanged financial information in anticipation of the March 19 meeting.

        On February 25, 2009, Dr. Manuso communicated to all members of our board regarding an analysis by the board's Pharmaceutical Sub-Committee that reviewed the landscape of potential companies and identified Astex as the most promising target for an acquisition. Dr. Manuso provided an overview of Astex and its founders, discussed the potential synergies of technologies and pipelines and outlined Astex's cash position. Dr. Manuso gave a more detailed overview of his conversations with Dr. Jhoti, Dr. Martin Buckland, Chief Business Officer of Astex, and Mr. Aston and indicated their agreement that senior management from both companies believed that there were compelling reasons to explore a potential combination between the two companies. Our board reviewed the materials provided by management and agreed to discuss the matter again at its next meeting scheduled for Thursday, March 12, while at the same time allowing management to continue preparations for the March 19 meeting.

        On March 2, 2009, SuperGen and Astex entered into a mutual confidentiality agreement to facilitate the exchange of more detailed information between the companies in order to further explore the possibility of a business combination.

        On March 3, 2009, Dr. Buckland forwarded documents to Mr. Molkentin in preparation for the meeting scheduled for March 19, 2009, including financial documents and presentations on Astex's process and products. Other members of senior management were also exchanging information at this time in preparation for the March 19 meeting.

        On March 10, 2009, Dr. Manuso shared materials about a potential business combination with Dr. Jhoti and other senior members of Astex's management and discussed how the combination could result in a significant, research-driven company with multiple products in development and a significant roster of corporate partnerships.

        On March 12, 2009, at a regularly scheduled meeting also attended by Mr. Molkentin and representatives from Wilson Sonsini Goodrich & Rosati, SuperGen's outside legal counsel, our board reviewed the competitive strategic landscape and potential strategic transactions, including the proposed strategic transaction with Astex. Dr. Michael McCullar, SuperGen's Senior Vice President of Strategy and Discovery Operations, joined the meeting, at which time our board discussed a proposed strategic transaction with Astex in greater detail. Following the discussion, the board agreed that Dr. Manuso should continue to engage in his discussions with Astex management, and inform the board about the status and progress of these discussions.

        On March 19, 2009, Dr. Manuso, Mr. Molkentin and Dr. McCullar met with Dr. Jhoti and representatives of senior management of Astex in London, U.K. to discuss a proposed strategic transaction, including a financial overview, development programs and synergistic potential. On March 20, 2009, Dr. Manuso informed the board of his views of the meeting and the potential benefits

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of a possible business combination. Later on March 20, 2009, Dr. Manuso and Dr. Jhoti met in Cambridge to discuss, among other things, the relative strengths of each company, valuations of each company and what a combined organization might look like.

        In the Spring of 2009, Dr. Manuso and the Pharmaceutical Sub-Committee continued to review the landscape of prospective biotechnology companies and assets that might provide good synergistic opportunities with SuperGen and conducted follow-up discussions with several such companies.

        On May 18, 2009, Mr. Molkentin sent a financial modeling spreadsheet to Mr. Aston and they discussed Astex's projected milestone payments from partners.

        At this time, senior management, after discussions with the SuperGen board, ceased discussions with Astex regarding the proposed business transaction due to differing perspectives on relative market valuations, market conditions, alternatives believed available to each company, and specific deal terms.

        In late 2009 and early 2010, we continued reviewing other opportunities to complement and expand our existing business, as well as the possibility of successfully operating as a stand-alone business and the possibility of trying to sell SuperGen, we determined that the acquisition of Astex could offer us the best opportunity to achieve our long-term strategic plan compared to the other alternatives that we examined and decided to reinitiate discussions to see if we could come to an agreement with Astex about terms for the proposed strategic Transaction.

        On April 6, 2010, Dr. Manuso contacted Dr. Stephen Bunting, member of the board of directors of Astex and Managing Director of Abingworth LLP ("Abingworth"), Astex's lead investor, to re-initiate exploratory discussions regarding a proposed business combination and inform Dr. Bunting that SuperGen would like to recommence due diligence in order to outline a range of values for Astex in the context of a strategic transaction and to determine the appropriate components of compensation, including cash, equity, and details regarding the possible structure of deferred compensation. Dr. Manuso indicated that SuperGen management would meet with Dr. Jhoti and Dr. Buckland in subsequent weeks in California and in the U.K.

        On April 22, 2010, Dr. Manuso notified our board of upcoming meetings with Astex, and provided an overview of the information he intended to share with Astex, including preliminary financial data regarding a proposed strategic transaction. Dr. Manuso also shared with our board information from Astex about Astex's drug development pipeline. The board again expressed its view that the discussions with Astex provided the best opportunity for SuperGen to advance its long-term strategic plan.

        On April 22, 2010, SuperGen Board member Dr. Michael Young had a meeting with Dr. Jhoti and other members of Astex's management team in Cambridge, after which an update of the meeting was provided to the full board.

        On April 29, 2010, SuperGen board members Dr. Allan Goldberg, Dr. Manuso and Dr. Young toured Astex's facilities in Cambridge and met Dr. Jhoti and other members of the Astex management team. On April 30, 2010, Dr. Goldberg, Dr. Manuso and Dr. Young met in London with Dr. Jhoti, Dr. Bunting, and Abingworth's director in charge of mergers and acquisitions to discuss a potential strategic transaction and a preliminary valuation of Astex.

        On May 5, 2010, Dr. Manuso discussed with our board a proposed draft Letter of Intent that would be sent to Astex. Dr. Goldberg and Dr. Manuso communicated throughout the day regarding the terms of a proposed strategic transaction, including the potential composition of the board of directors a combined entity.

        On May 8, 2010, we sent a draft letter of intent to Astex. On May 12, 2010, Dr. Jhoti and Dr. Buckland raised specific issues with Dr. Manuso regarding financial projections, board composition and valuation that they felt needed to be addressed in the letter of intent, which Dr. Manuso communicated to the SuperGen board.

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        Dr. Jhoti informed Dr. Manuso that at its May 11 meeting, the Astex board of directors appointed a formal committee of its board comprised of Dr. Jhoti, Dr. Bunting and Dr. Buckland as designated representatives of Astex in connection with discussions regarding the proposed strategic transaction.

        On May 13 and 14, 2010, senior management and several board members visited Astex's facilities in Cambridge and met with Dr. Jhoti and Astex's senior management as part of SuperGen's due diligence efforts.

        On May 15, 2010, Dr. Manuso traveled to London, U.K. to present at several healthcare and biotechnology conferences and to meet with pharmaceutical companies and European investment funds. During this week, Dr. Manuso met with Dr. Jhoti, Astex's CEO and Dr. Bunting in London, U.K. to discuss various organizational, strategic and due diligence matters.

        On May 19, 2010, Dr. Manuso discussed with our board the meetings of the past week, including reports from SuperGen senior management about the May 13 and 14, 2010 meetings. As part of these discussions, Dr. Manuso indicated that the senior management and board members of Astex supported moving forward with the proposed business combination, and the board discussed the various possible deal terms under consideration, including the amount of stock that might be paid to Astex securityholders and how the combined entity's board might be structured.

        On June 3 and 4, 2010, Astex's senior management visited SuperGen's Dublin, CA and Salt Lake City, UT facilities and met with SuperGen's senior management and other key personnel.

        On June 4, 2010, our board discussed various issues related to potential timing issues related to the proposed business combination, including if stockholder approval were required.

        On June 6, 2010, Dr. Jhoti forwarded comments to the latest draft of the letter of intent, which document was renamed as term sheet, and side letter to the confidentiality agreement that set forth terms of confidential treatment of proprietary informatin. The board reviewed the revised agreements in preparation for discussing at the June 10 board meeting.

        On June 10, 2010, our board held a regularly scheduled meeting, which was also attended by Mr. Molkentin and representatives from Wilson Sonsini Goodrich & Rosati, at which the board discussed the status of discussions with Astex regarding the proposed strategic transaction. The board discussion included updates on the status of research and development issues and governance matters. The board had a full discussion regarding issues relating to the proposed strategic transaction and specifically discussed the revised term sheet and side letter.

        On June 14, 2010, senior management from SuperGen and Astex held a telephonic conference call during which Astex's management presented an overview of Astex's: (1) internal discovery programs; (2) partnered discovery programs; (3) internally funded development pipeline; and (4) trials being externally funded on Astex compounds.

        On June 15, 2010, SuperGen delivered a revised draft term sheet and side letter to Astex, and our board discussed various matters relating to these draft agreements, including the prospective status of Astex's existing business relationships after the proposed strategic transaction and the composition of the board of directors of the combined entity.

        During the week of June 21, 2010, Dr. Manuso and Mr. Molkentin met with Dr. Jhoti and other members of Astex's senior management in London to discuss various issues related to the proposed business transaction. Mr. Molkentin met with Astex's Vice President of Finance and Administration to prepare a multi-year financial forecast. On June 24, 2010, Dr. Manuso updated our board about these meetings.

        On June 29, 2010, Dr. Manuso communicated with Dr. Jhoti and Dr. Bunting, as representatives of Astex, outlining the background and rationale for the terms of consideration that SuperGen had proposed in the preliminary term sheet, and Dr. Manuso and Dr. Jhoti continued communicating about

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various issues regarding the proposed strategic transaction, including the use of issued and outstanding equity or fully diluted equity, corporate governance and potential cost savings.

        On July 2, 2010, Dr. Jhoti sent Dr. Manuso a revised term sheet and side letter to the confidentiality agreement, which Dr. Manuso circulated to the board. Discussions between senior management of both companies continued through July regarding specific issues set forth in the draft term sheet.

        On July 23, 2010, our board received copies of the most recent draft of the revised term sheet and side letter to the confidentiality agreement. The board discussed the proposed terms and reviewed the results of diligence, financial models and input from senior management.

        On July 26, 2010, our board participated in a special telephonic meeting, during which our board discussed the advantages and disadvantages of the current terms of the proposed strategic transaction and determined that the terms were not in the best interests of the company. The board of directors rejected the terms of the proposed strategic transaction as then presented and authorized Dr. Manuso to communicate this to Astex and also to communicate that our board was open to considering a revised proposal from Astex.

        On July 30, 2010, Dr. Manuso communicated to Dr. Jhoti and Dr. Bunting that there were challenges regarding the current terms of the proposed business combination but expressed that the SuperGen board of directors remained interested in pursuing the proposed business combination under revised terms and that he and SuperGen's senior management team were still planning to present the case for the proposed business combination with revised terms to Astex's board of directors on August 17, 2010.

        At the Astex meeting of its board of directors on August 17, 2010, Dr. Manuso, Mr. Molkentin and Dr. Mohammad Azab, our Chief Medical Officer, made a presentation as to the expected synergies of a combined SuperGen and Astex company. Members of SuperGen and Astex's senior management agreed to re-initiate discussions understanding that the terms previously considered would need to be revised. Dr. Manuso kept the board apprised of the developments through regular communications to the board.

        On August 24, 2010, Dr. Manuso sent Dr. Jhoti a revised term sheet and side letter, which reflected recent negotiations pertaining to consideration structure and timing, handling of options and the composition of the board of directors of the combined entity. Dr. Jhoti and Dr. Manuso signed the term sheet and side letter dated August 26, 2010.

        On August 31 and September 1, 2010, members of SuperGen's and Astex's management teams coordinated each company's working groups and commenced with the legal due diligence process.

        Between September 7 and 15, 2010, Dr. Manuso and Dr. Jhoti exchanged several communications to share the current hiring activities at SuperGen and Astex and to express ongoing progress regarding the proposed business combination.

        On September 16, 2010, our board held a regularly scheduled meeting, which was also attended by Mr. Molkentin, Dr. Azab, and representatives from Wilson Sonsini Goodrich & Rosati. Our board discussed various aspects of the proposed business combination, including the status of due diligence, Astex management, the proposed valuation of Astex and Astex's operations and drug pipeline. Our board directed management to continue the due diligence investigation of Astex, including undertaking a detailed valuation analysis.

        On September 20, 2010, Dr. Manuso notified our board that in connection with SuperGen's review of the proposed business combination, he had met with Houlihan Lokey. Dr. Manuso discussed with our board of directors Houlihan Lokey's costs and experience as well as the process of obtaining a preliminary valuation analysis.

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        On September 27, 2010, Dr. Manuso and a representative of Houlihan Lokey had a meeting and follow up discussions later that day to discuss Houlihan Lokey's role and processes for providing a preliminary valuation analysis. Dr. Manuso described the history of the negotiations and described several key characteristics of SuperGen's business and Astex's business.

        In early October 2010, SuperGen's in-house legal counsel, several members of senior management and Mr. Molkentin spent a week at Astex's facilities in Cambridge conducting additional due diligence. Throughout the fall, key members of management from SuperGen and Astex had regular discussions regarding diligence and integration issues.

        On December 9, 2010, our board held a regularly scheduled meeting, which was also attended by Mr. Molkentin and representatives of Wilson Sonsini Goodrich & Rosati. Our board discussed the status of discussions with Astex and various aspects of the proposed business combination. Dr. Manuso noted that he would have additional discussions with Astex in London during the following week. On December 12, 2010, Dr. Manuso met with Dr. Jhoti and several Astex board members to discuss revising the term sheet that would be acceptable to our board and fair for SuperGen stockholders.

        On December 14, 2010, Houlihan Lokey delivered a preliminary valuation analysis.

        On December 17, 2010, Dr. Manuso followed up with Dr. Jhoti regarding Dr. Manuso's meeting with Astex the week prior to communicate that pursuant to discussions at those meetings, SuperGen was proposing the following terms: (1) Astex shareholders initially would own 35% of the issued and outstanding equity of the combined entity, (2) SuperGen would pay $25 million in cash to Astex shareholders on the closing, and (3) the combined entity would pay $30 million of milestone payments in cash or stock, at the combined entity's discretion, to former Astex shareholders. Dr. Manuso would remain Chairman and CEO, Dr. Jhoti would be appointed President, and seats on the board of directors were expected to be offered to Dr. Jhoti and three other persons to represent Astex. On December 18, 2010, Dr. Jhoti provided an outline of Astex's proposal for milestone payments of deferred consideration.

        On December 22, 2010 our board held a special meeting via telephonic conference call to review the revised terms of the proposed business combination and undertook a thorough discussion of the terms. Our board decided to generate a term sheet to reflect the revised terms. Subsequently, various drafts of the term sheet reflecting revised terms were circulated for review and comment by our board.

        Throughout January 2011, Dr. Manuso and senior management of SuperGen continued discussion of specific terms of the proposed business combination, which were memorialized in a nonbinding term sheet, and continued conducting detailed due diligence of Astex.

        On February 2, 2011, Dr. Manuso updated our board on the progress of the Transaction. Dr. Manuso attached the latest term sheet, and he indicated that the working groups were moving ahead with final due diligence on Astex and planning for the Transaction.

        On February 2, 2011, Dr. Manuso also forwarded our board biographic information of the four proposed Astex nominees to the board of directors of the combined entity as well as of several members of management of Astex who were being considered as senior managerial appointments to the combined entity.

        On February 14 and 15, 2011, Dr. Manuso met with Dr. Jhoti and several Astex board members in London, and then Dr. Manuso, Dr. McCullar and Tim Enns, SuperGen's Senior Vice President of Corporate Communications and Business Development, met with Dr. Jhoti and other members of Astex's senior management at Astex's facilities in Cambridge to discuss issues relating to the Transaction, including, among other things, integration, operations, communications and marketing. On February 16, 2011, Dr. McCullar provided a summary of the meeting to SuperGen's senior management, including an update on the status of the Transaction, Astex's clinical and discovery updates and Astex's responses to compliance issues raised by SuperGen.

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        During the remainder of February 2011, members of senior management from both companies continued to dialogue about integration and diligence issues on a regular basis. Dr. Manuso provided periodic updates to our board on the status of these discussions as well as the Implementation Agreement and related documents being drafted to document the Transaction.

        During the week of February 28, 2011, Mr. Molkentin and Dr. Buckland met with our respective legal teams in New York, NY to negotiate definitive terms of the legal agreements, which negotiations continued through April 6, 2011. Also during this week, a member of SuperGen's in-house legal team visited Astex's facilities in Cambridge to update legal diligence review.

        On March 7, 2011, Dr. Jhoti provided updated and corrected financial information to Dr. Manuso, including information relating to Astex's product developments, milestones, and certain financial assumptions.

        On March 10, 2011, our board held a special meeting by telephonic conference call, which was also attended by Mr. Molkentin, representatives from Wilson Sonsini Goodrich & Rosati and by representatives of Houlihan Lokey. Representatives of Houlihan Lokey discussed further financial analyses to be undertaken as requested by our board, after which the representatives of Houlihan Lokey left the meeting. Our board discussed various matters related to the Transaction including a detailed discussion with its counsel of the legal and financial terms of the Transaction. SuperGen's counsel discussed with our board its legal and fiduciary duties with respect to the Transaction.

        On March 17, 2011, our board held a regularly scheduled meeting, which was also attended by Mr. Molkentin and representatives from Wilson Sonsini Goodrich & Rosati. Our board discussed the status of the Transaction and reviewed the term sheet in detail. Mr. Enns and Dr. Jhoti also participated for a portion of the meeting to discuss the status of certain aspects of the Transaction.

        On March 30, 2011, our board held a special meeting by telephonic conference call, which was also attended by Mr. Molkentin and representatives from Wilson Sonsini Goodrich & Rosati. Representatives of Houlihan Lokey were present for a portion of the meeting to discuss their preliminary financial analysis with our board.

        During the period of March 30, 2011 through April 6, 2011, members of Astex's and Supergen's management and legal teams continued the negotation of the Implementation Agreement and the exhibits and schedules to the Implementation Agreement.

        On April 6, 2011, our board held a special meeting by telephonic conference call to review the final documents memorializing the terms of the Transaction. Representatives of Houlihan Lokey delivered an oral opinion (subsequently confirmed in writing) as of April 6, 2010, and based upon and subject to the factors, limitations, qualifications and assumptions set forth in its written opinion, as to the fairness, from a financial point of view, of the consideration of 35% of the post transaction shares of SuperGen common stock and $25 million in cash to be paid at closing and $30 million in cash or common stock to be paid within 30 months after closing, taken in the aggregate, for all of the outstanding shares of Astex. Discussion followed regarding the details of the Transaction as set forth in the final documents including the Implementation Agreement and all schedules and exhibits, and after careful consideration, our board determined that it was advisable, fair and in the best interests of SuperGen and its stockholders for our board to approve the issuance of shares to Astex shareholders, approve the Transaction with Astex and enter into the Implementation Agreement, as subsequently finalized by certain authorized officers of SuperGen. Our board then, among other things, unanimously approved the issuance of shares to Astex shareholders, the Implementation Agreement and the Transaction pursuant to the terms of the Implementation Agreement, and the related actions, including the name change of SuperGen to Astex Pharmaceuticals, Inc. following the closing of the Transaction, and unanimously resolved to recommend that our stockholders vote in favor of the issuance of SuperGen common stock pursuant to the Transaction, in each case, subject to the receipt of the written

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opinion from Houlihan Lokey and resolution of all final issues on the Implementation Agreement and related documentation.

        On the afternoon of April 6, 2011, SuperGen and Astex and their representatives finalized the Implementation Agreement and the exhibits and schedules to the Implementation Agreement, and the parties executed the Implementation Agreement dated as of April 6, 2011. Also, each of our directors as well as those of Astex, and certain large shareholders of Astex executed their respective voting agreements and lock-up agreements dated as of April 6, 2011.

        On April 6, 2011, SuperGen and Astex finalized their press announcements, filings and communications materials and the proposed Transaction was announced by press release on the evening of April 6, 2011 after the close of market trading.

Recommendation of our Board of Directors

        Reasons for the Transaction.     In the course of reaching its decision to approve the share issuance to Astex shareholders, approve the Implementation Agreement and otherwise approve and enter into the Transaction, our board of directors consulted with our senior management, outside legal counsel and our financial advisor, and reviewed a significant amount of information and considered a number of factors, including, among others, the following:

•

the possible alternatives to the Transaction, including the possibility of continuing to operate as an independent entity and the perceived risks thereof, and that we conducted an extensive market check by contacting potential strategic partners over a period of several years, as described in the section entitled "The Transaction—Background to the Transaction" beginning on page     •    ;



•

the current and prospective environment in which we operate, including our drug discovery and development capabilities, the cost and time commitment required to independently undertake drug discovery and development, our reliance on Dacogen for future revenue streams, national and local economic conditions, the competitive environment, and the likely effect of these factors on our potential growth, development, productivity, profitability and strategic options;



•

historical financial information concerning our business, management, financial performance and conditions, technology, operations, prospects and competitive position;



•

the size of Astex and related economies of scale, and that the diversification of our drug development capabilities beyond the level that may be reasonably achievable on an independent basis was becoming increasingly important to continued success in our industry;



•

the likelihood that the Transaction will be completed, including the likelihood that the regulatory and stockholder approvals needed to complete the Transaction will be obtained;



•

current financial market conditions and historical market prices, volatility and trading information with respect to our common stock; and



•

the consideration to be paid by SuperGen to former Astex shareholders in the Transaction, including the form of such consideration.

        Our board of directors also specifically identified and considered a number of other positive factors supporting its decision to approve the Transaction, including, but not limited to:

•

discussions with our management team regarding our business, financial performance and condition, technology, operations, competitive position, business strategy, strategic objectives and options and prospects, as well as risks involved in achieving these prospects; the nature of our business and the industry in which we compete; and current industry, economic and global market conditions, both on a historical and on a prospective basis, all of which led our board of

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directors to conclude that the Transaction presented an opportunity for our stockholders to realize greater value than the value likely to be realized by stockholders in the event we remained independent;

•

a review of the possible alternatives to the acquisition of Astex, including remaining independent and growing the business organically, pursuing a strategy of growth through acquisitions or pursuing corporate alliances; the value to our stockholders of such alternatives; the timing and likelihood of actually achieving additional value from these alternatives; and the assessment of the board of directors that none of these alternatives was reasonably likely to result in value for our stockholders greater than the value we believed would result to our stockholders as a result of the acquisition of Astex;



•

the belief by management that the Transaction would allow for enhanced products and opportunities for our partners and to expand our partnership relationships;



•

the value of the consideration to be paid in connection with the Transaction as analyzed through various valuation methodologies, including the value of comparable publicly traded companies, prices paid in comparable transactions involving similar companies, premiums paid in selected transactions and future projected share price analysis; and



•

the belief that the terms of the Implementation Agreement, including the parties' mutual representations, warranties and covenants, and closing conditions, as described in the section entitled "The Implementation Agreement" beginning on page     •    , are reasonable and that the prospects for successful consummation of the transaction are high.

        Our board of directors has identified and considered a variety of risks and other countervailing factors in its deliberations concerning whether to approve the Transaction and enter into the Implementation Agreement, including, but not limited to:

•

the possibility that the Transaction might not be completed and the potential effects of the public announcement and pendency of the Transaction on management attention, our ability to retain employees, our relationship with customers and suppliers, and our sales, operating results and stock price and our ability to attract and retain key research and development, management and sales, marketing and technical personnel;



•

the restrictions the Implementation Agreement imposes on our ability to be acquired before closing and the fact that we may be obligated to pay to Astex a $6 million termination fee under specified circumstances, as described in the sections entitled "Implementation Agreement—Termination Fees";



•

the restrictions the Implementation Agreement imposes on our operations during the period between the signing of the Implementation Agreement and the completion of the Transaction and the fact that, should the Transaction not occur, such restrictions could have had an adverse effect on our operations during such time;



•

the fact that certain of our directors and executive officers may have conflicts of interest in connection with the Transaction, as they may receive certain benefits that are different from, and in addition to, those of our stockholders, as described in the section entitled "The Transaction—Interests of our Directors and Executive Officers in the Transaction" beginning on page     •    ;



•

that, while the Transaction is expected to be completed, there can be no assurance that all conditions to the parties' obligations to complete the Transaction will be satisfied, and as a result, it is possible that the Transaction may not be completed, even if the Implementation Agreement is adopted by our stockholders, as described in the section entitled "Implementation Agreement—Conditions to the Transaction" beginning on page [    •    ]; and

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•

the risks that even if the Transaction is completed, the potential benefits sought in the Transaction may not be fully realized, including, without limitation, Astex's drug-discovery platform may not produce viable clinical candidates for SuperGen to monetize, and some or all of the existing partnerships with large pharmaceutical companies might not continue; the risk associated with the substantial charges to be incurred in connection with the Transaction, including costs of integrating the businesses and transaction expenses arising from the Transaction; the risk that the stock price of SuperGen will be negatively impacted by the dilution caused by the Acquisition; the limitations, as a result of the consummation of the Transaction, on SuperGen's use of its net operating losses; and the risk that despite the efforts of the combined company, key employees might not remain employed by the combined company.

        The preceding discussion is not meant to be an exhaustive description of the information and factors considered by our board of directors, but is believed to address the material information and factors considered. In view of the wide variety of factors considered in connection with its evaluation of the Transaction and the complexity of these matters, our board of directors did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination. In considering the factors described above, individual members of the board may have given different weight to different factors.

         Board of Directors Recommendation. After careful consideration, and taking into account all of the factors outlined above, our board of directors unanimously recommends that are stockholders vote "FOR" Proposal One regarding the issuance of shares in connection with the Transaction. Our board of directors also recommends that our stockholders vote "FOR" any proposal by our board of directors to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of issuing the shares in connection with the Transaction.

Opinion of Houlihan Lokey Financial Advisors, Inc.

        On April 6, 2011, Houlihan Lokey rendered an oral opinion to our board of directors (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated April 6, 2011), to the effect that, as of April 6, 2011, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, the consideration to be paid by us, taken in the aggregate, for all of the outstanding share capital of Astex in the Transaction pursuant to the Implementation Agreement was fair, from a financial point of view, to us.

         Houlihan Lokey's opinion was directed to our board of directors and only addressed the fairness from a financial point of view of the consideration to be paid by SuperGen, taken in the aggregate, for all of the share capital of Astex in the Transaction pursuant to the Implementation Agreement and does not address any other aspect or implication of the Transaction. The summary of Houlihan Lokey's opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Appendix E to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute advice or a recommendation to our board of directors or any stockholder as to how to act or vote with respect to the Transaction or related matters.

        In arriving at its opinion, Houlihan Lokey, among other things:

1.

reviewed the draft dated March 30, 2011 of the Implementation Agreement;



2.

reviewed certain publicly available business and financial information relating to Astex, us, and certain of our drugs, in each case that Houlihan Lokey deemed to be relevant, including

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certain publicly available research analyst estimates with respect to our future financial performance;

3.

reviewed certain information relating to the historical, current and future operations, financial condition and prospects of Astex and us made available to Houlihan Lokey by Astex and us, including (a) financial projections prepared by or discussed with our management relating to our operations for the fiscal years ending 2011 through 2015, and (b) financial projections prepared by or discussed with our management relating to Astex for the fiscal years ending 2011 through 2018;



4.

spoke with certain members of the managements of Astex and us and certain of our representatives and advisors regarding the respective businesses, operations, financial condition and prospects of Astex and us, the Transaction and related matters;



5.

compared the financial and operating performance of Astex and SuperGen with that of other public companies that Houlihan Lokey deemed to be relevant;



6.

considered the publicly available financial terms of certain transactions that Houlihan Lokey deemed to be relevant;



7.

reviewed the current and historical market prices and trading volume for certain of our publicly traded securities, and the current and historical market prices and trading volume of the publicly traded securities of certain other companies that Houlihan Lokey deemed to be relevant;



8.

compared the relative contributions of Astex and us to certain financial statistics of the combined company on a pro forma basis;



9.

reviewed a certificate addressed to Houlihan Lokey from our senior management which contains, among other things, representations regarding the accuracy of the information, data and other materials (financial or otherwise) provided to, or discussed with, Houlihan Lokey by or on behalf of Astex and SuperGen; and



10.

conducted certain other financial studies, analyses and inquiries and considered certain other information and factors as Houlihan Lokey deemed appropriate.

        Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and did not assume any responsibility with respect to that data, material and other information. In addition, our management advised Houlihan Lokey, and Houlihan Lokey assumed, that the financial projections reviewed by Houlihan Lokey had been reasonably prepared in good faith, reflecting the best then currently available estimates and judgments of our management as to the future financial results and condition of Astex and us, and Houlihan Lokey expressed no opinion with respect to those projections or the assumptions on which they were based. With respect to the publicly available research analyst estimates for SuperGen referred to above, Houlihan Lokey reviewed and discussed those estimates with our management and our management advised Houlihan Lokey, and Houlihan Lokey assumed, that those estimates represented reasonable estimates and judgments of the future financial results and condition of us, and Houlihan Lokey expressed no opinion with respect to those estimates or the assumptions on which they were based. Houlihan Lokey relied upon and assumed, without independent verification, that there had been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Astex or us since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to Houlihan Lokey's analyses or Houlihan Lokey's opinion, and that there was no information or any facts that would have made any of the information reviewed by Houlihan Lokey incomplete or misleading. Houlihan Lokey also relied upon, without independent verification, the

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assessment of our management of: (i) the existing technology platform and products of Astex and us; and (ii) the validity of, and risks associated with, the existing and future technology platforms, products and intellectual property of Astex and us. Houlihan Lokey relied, at our direction, on the assessments of our management as to the products and product candidates of each of Astex and us, respectively, including, without limitation, the probability of successful testing and development, and approval by appropriate governmental authorities, of those products and product candidates.

        Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the Implementation Agreement and all other related documents and instruments that are referred to therein were true and correct, (b) each party to the Implementation Agreement and other related documents and instruments would fully and timely perform all of the covenants and agreements required to be performed by the relevant party, (c) all conditions to the consummation of the Transaction would be satisfied without waiver thereof, and (d) the Transaction would be consummated in a timely manner in accordance with the terms described in the Implementation Agreement and other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also relied upon and assumed, without independent verification, that (i) the Transaction would be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Transaction would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would result in the disposition of any assets of Astex or us, or otherwise have an effect on Astex or us or any expected benefits of the Transaction that would be material to Houlihan Lokey's analyses or Houlihan Lokey's opinion. Houlihan Lokey also assumed, at our direction, that the deferred consideration would be paid in cash and not in shares of our common stock. In addition, Houlihan Lokey relied upon and assumed, without independent verification, that the final form of the Implementation Agreement would not differ in any respect from the March 30, 2011 draft of the Implementation Agreement identified above.

        Furthermore, in connection with Houlihan Lokey's opinion, Houlihan Lokey had not been requested to make, and had not made, any independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of Astex, us or any other party, nor was Houlihan Lokey provided with any appraisal or evaluation. Houlihan Lokey had undertaken no independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which Astex or us was or may be a party or was or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which Astex or SuperGen was or may be a party or was or may be subject.

        Houlihan Lokey had not been requested to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications of interest from, third parties with respect to the Transaction, the securities, assets, businesses or operations of Astex or any other party, or any alternatives to the Transaction, (b) negotiate the terms of the Transaction, or (c) advise our board of directors or any other party with respect to alternatives to the Transaction. Houlihan Lokey's opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, the date of its opinion. Houlihan Lokey had not undertaken, and was under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey's attention after the date of its opinion. Houlihan Lokey did not express any opinion as to what the value of the combined entity's common stock actually would be when issued pursuant to the Transaction or the price or range of prices at which our common stock may be purchased or sold at any time. Houlihan Lokey assumed that the new shares of our common stock to be issued in the Transaction to the shareholders of Astex would be listed on the NASDAQ Global Select Market.

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        Houlihan Lokey's opinion was furnished for the use of our board of directors (solely in its capacity as our board of directors) in connection with its evaluation of the Transaction and may not be used for any other purpose without Houlihan Lokey's prior written consent. Houlihan Lokey's opinion should not be construed as having created any fiduciary duty on Houlihan Lokey's part to any party. Houlihan Lokey's opinion was not intended to be, and did not constitute, a recommendation to our board of directors, any security holder or any other person as to how to act or vote with respect to any matter relating to the Transaction.

        Houlihan Lokey had not been requested to opine as to, and Houlihan Lokey's opinion did not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of our Company, our security holders or any other party to proceed with or effect the Transaction, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Transaction or otherwise (other than the Consideration to the extent expressly specified therein), (iii) the fairness of any portion or aspect of the Transaction to the holders of any class of securities, creditors or other constituencies of our Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of Houlihan Lokey's opinion, (iv) the relative merits of the Transaction as compared to any alternative business strategies that might exist for Astex, our Company or any other party or the effect of any other transaction in which Astex, our Company or any other party might engage, (v) the fairness of any portion or aspect of the Transaction to any one class or group of our Company's or any other party's security holders vis-à-vis any other class or group of our Company's or any other party's security holders (including, without limitation, the allocation of any consideration amongst or within those classes or groups of security holders), (vi) whether or not Astex, our Company, their respective security holders or any other party was receiving or paying reasonably equivalent value in the Transaction, (vii) the solvency, creditworthiness or fair value of Astex, our Company or any other participant in the Transaction, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Transaction, any class of those persons or any other party, relative to the Consideration or otherwise, or (ix) the combined entity's determination that the Deferred Consideration would be paid in cash and not in the combined entity's common stock. Furthermore, no opinion, counsel or interpretation was intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It was assumed that those opinions, counsel or interpretations had been or would be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with our consent, on the assessments by Astex, our Company and their respective advisors, as to all legal, regulatory, accounting, insurance and tax matters with respect to Astex, our Company and the Transaction.

        In preparing its opinion to our board of directors, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey's analyses is not a complete description of the analyses underlying Houlihan Lokey's opinion. The preparation of a fairness opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither a fairness opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors or focusing on information presented in tabular format, without considering all analyses, methodologies and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Houlihan Lokey's analyses and opinion. Each analytical

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technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques.

        In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of the opinion. Houlihan Lokey's analyses involved judgments and assumptions with regard to industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are beyond the control of SuperGen, such as the impact of competition on our business and on the industry generally, industry growth and the absence of any material change in our financial condition and prospects or those of the industry or in the markets generally. No company, transaction or business used in Houlihan Lokey's analyses for comparative purposes is identical to us or to the proposed Transaction and an evaluation of the results of those analyses is not entirely mathematical. Houlihan Lokey believes that mathematical derivations (such as determining average and median) of financial data are not by themselves meaningful and should be considered together with qualities, judgments and informed assumptions. The estimates contained in our analyses and the implied reference range values indicated by Houlihan Lokey's analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond our control. Much of the information used in, and accordingly the results of, Houlihan Lokey's analyses are inherently subject to substantial uncertainty. Houlihan Lokey's opinion was provided to our board of directors in connection with its evaluation of the proposed Transaction and was only one of many factors considered by our board of directors in evaluating the proposed Transaction. Neither Houlihan Lokey's opinion nor its analyses were determinative of the consideration or of the views of our board of directors or management with respect to the Transaction or the consideration. The type and amount of consideration payable in the Transaction were determined through negotiation between our management and Astex, and the decision to enter into the Transaction was solely that of our board of directors.

        The following is a summary of the material analyses reviewed by Houlihan Lokey with our board of directors in connection with Houlihan Lokey's opinion rendered on April 6, 2011. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey's analyses.

        For purposes of its analyses, Houlihan Lokey reviewed enterprise value calculated as the value of the relevant company's outstanding equity securities (taking into account its outstanding warrants and other convertible securities) based on the relevant company's closing stock price, or equity value, plus net debt (calculated as outstanding indebtedness, preferred stock and capital lease obligations less the amount of cash on its balance sheet), as of a specified date.

Analysis of Astex

        Unless the context indicates otherwise, enterprise values and equity values derived from the selected companies analysis described below were calculated using the closing price of the common stock of the selected clinical stage pharmaceutical companies listed below as of April 5, 2011, and transaction values for the target companies derived from the selected transactions analysis described below were calculated as of the announcement date (with the exception of transactions involving Cequent Pharmaceuticals, Inc., Millennium Pharmaceuticals, Inc., MGI PHARMA, Inc., Pharmion

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Corp. and Bioenvision, Inc. as the targets, which were calculated as of a date subsequent to the announcement due to lack of information available at the announcement or significant changes to the transaction terms between the announcement and close) of the relevant transaction based on the estimated purchase prices paid in the selected transactions. Accordingly, this information may not reflect current or future market conditions. Estimates for Astex were based on estimates provided by our management. Estimates for the selected clinical stage pharmaceutical companies listed below were based on certain publicly available consensus research analyst estimates for those clinical stage pharmaceutical companies.

        Selected Companies Analysis.     Houlihan Lokey calculated multiples of enterprise value based on certain financial data for us and the following selected Phase II clinical stage pharmaceutical companies currently involved in partnerships with large pharmaceutical companies:

•

Micromet, Inc.

•

Array BioPharma, Inc.

•

Idera Pharmaceuticals,  Inc.

•

Cyclacel Pharmaceuticals, Inc.

•

Curis Inc.

•

Oxford BioMedica PLC

•

Transgene SA

•

Geron Corporation

•

Marina Biotech Inc.

•

Lpath Inc.

        This selected companies' analysis resulted in a mean and a median enterprise value of approximately $176 million and $136 million, respectively, and indicated an implied reference range for Astex of approximately $145 million to $175 million.

        Selected Transactions Analysis.     Houlihan Lokey calculated multiples of enterprise value based on the estimated purchase prices paid in the following selected publicly-announced pharmaceutical transactions in which the target was a Phase II clinical stage-company involved in partnerships with large pharmaceutical companies:

        This selected transactions analysis resulted in a mean and a median for upfront payments of approximately $238 million and $290 million, respectively, a mean and a median for contingent payments of approximately $54 million and $0, respectively, and indicated an implied reference range for Astex of approximately $160 million to $190 million.

Sum-of-Parts Analysis

        Houlihan Lokey performed a sum-of-parts analysis for Astex, consisting of the projected net-cash at closing as provided by our management, a discounted cash flow analysis of its partnered programs, a discounted cash flow analysis of its unencumbered development programs and a valuation of its platform.

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        Partnered Programs:     Houlihan Lokey calculated the estimated present value of the standalone, probability weighted after-tax free cash flows that Astex could generate for its partnered programs over the remaining nine-months of fiscal year 2011, and fiscal years 2012 through 2034, based on estimates of the future financial performance of its partnered programs provided by our management. The estimated after-tax free cash flows were then discounted using a mid-year convention to the present value using discount rates ranging from 13.0% to 15.0%, based on a weighted average cost of capital analysis for selected clinical stage pharmaceutical companies.

        Unencumbered Development Programs:     Houlihan Lokey calculated the estimated present value of the standalone, probability weighted after-tax free cash flows that Astex could generate for its unencumbered development programs over the remaining nine months of fiscal year 2011, and fiscal years 2012 through 2028, based on estimates of the future financial performance of its unencumbered development programs provided by our management. The estimated after-tax free cash flows were then discounted using a mid-year convention to the present value using discount rates ranging from 13.0% to 17.0%, based on a weighted average cost of capital analysis for selected clinical stage pharmaceutical companies.

        Platform:     To estimate the collective value of Astex's platform, Houlihan Lokey evaluated the following publicly announced platform transactions:

        The sum-of-parts analysis indicated an implied enterprise value reference range for Astex as of March 28, 2011 of approximately $157 million to $238 million.

Analysis of our Company

        Unless the context indicates otherwise, enterprise values and equity values derived from the selected companies analysis described below were calculated using the closing price of our common stock and the common stock of the selected marketed stage pharmaceutical companies listed below as of April 5, 2011, and transaction values for the target companies derived from the selected transactions analysis described below were calculated as of the announcement date of the relevant transaction based on the estimated purchase prices paid in the selected transactions. Accordingly, this information may not reflect current or future market conditions. Estimates for us were based on estimates provided by our management. Estimates for the selected marketed stage pharmaceutical companies listed below were based on certain publicly available consensus research analyst estimates for those marketed stage pharmaceutical companies.

        Selected Companies Analysis.     Houlihan Lokey calculated multiples of enterprise value based on certain financial data for us and the following selected marketed stage pharmaceutical companies:

•

Allos Therapeutics, Inc.

•

Dyax Corp.

•

Spectrum Pharmaceuticals

•

GTX Inc.

•

Access Pharmaceuticals Inc.

•

EpiCept Corporation

•

Vernalis plc

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•

Sucampo Pharmaceuticals, Inc.

•

Dendreon Corp.

The calculated multiples included:

•

Enterprise value as a multiple of revenue for the latest twelve month, referred to as LTM;



•

Enterprise value as a multiple of estimated next fiscal year revenue, referred to NFY; and



•

Enterprise value as a multiple of estimated revenue for the fiscal year after the next fiscal year, referred to as NFY+1.

The selected companies analysis resulted in the following:

The selected companies analysis indicated an implied reference range for SuperGen of approximately $211 million to $237 million.

        Selected Transactions Analysis.     Houlihan Lokey calculated multiples of enterprise value and per share equity value based on the estimated purchase prices paid in the following selected publicly-announced marketed stage pharmaceutical transactions:

        The calculated multiples included:

•

Equity value as a multiple of LTM revenue;



•

Equity value as a multiple of NFY revenue; and



•

Equity value as a multiple of NFY+1 revenue.

The selected transactions analysis resulted in the following:

The selected transactions analysis indicated an implied reference range for SuperGen of approximately $237 million to $263 million.

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Sum-of-Parts Analysis

        Houlihan Lokey performed a sum-of-parts analysis for us, consisting of the projected net-cash at closing as provided by our management, a discounted cash flow analysis of Dacogen, a discounted cash flow analysis of our unencumbered programs and a valuation of our platform.

        Dacogen:     Houlihan Lokey calculated the estimated present value of the standalone, probability weighted after-tax free cash flows that we could generate for Dacogen through 2024, based on estimates of the future financial performance of Dacogen provided by our management. The estimated after-tax free cash flows were then discounted using a mid-year convention to the present value using discount rates ranging from 9.5% to 11.5%, based on a weighted average cost of capital analysis for selected pharmaceutical companies with marketed products and royalty streams.

        Unencumbered Programs:     Houlihan Lokey calculated the estimated present value of the standalone, probability weighted after-tax free cash flows that we could generate for our unencumbered programs over the remaining nine-months of fiscal year 2011, and fiscal years 2012 through 2028, based on estimates of the future financial performance of our unencumbered programs provided by our management. The estimated after-tax free cash flows were then discounted using a mid-year convention to the present value using discount rates ranging from 14.0% to 18.0%, based on a weighted average cost of capital analysis for selected clinical stage pharmaceutical companies.

        Platform:     To estimate the collective value of our platform, Houlihan Lokey evaluated the following publicly announced platform transactions:

        The sum-of-parts analysis indicated an implied enterprise value reference range for SuperGen of approximately $231 million to $259 million.

Other Matters

        Houlihan Lokey was engaged by us to provide an opinion to our board of directors regarding the fairness from a financial point of view of the consideration to be paid by us, taken in the aggregate, for all of the outstanding share capital of Astex in the Transaction pursuant to the Implementation Agreement. We engaged Houlihan Lokey based on Houlihan Lokey's experience and reputation. Houlihan Lokey is regularly engaged to render financial opinions in connection with mergers, acquisitions, divestitures, leveraged buyouts, recapitalizations, and for other purposes. Pursuant to the engagement letter, we paid Houlihan Lokey a customary fee for its services, a portion of which became payable upon the execution of Houlihan Lokey's engagement letter and the balance of which became payable upon the delivery of Houlihan Lokey's opinion, regardless of the conclusion reached therein. No portion of Houlihan Lokey's fee is contingent upon the successful completion of the Transaction. We have also agreed to reimburse Houlihan Lokey for certain expenses and to indemnify Houlihan Lokey, its affiliates and certain related parties against certain liabilities and expenses, including certain liabilities under the federal securities laws arising out of or relating to Houlihan Lokey's engagement.

        In the ordinary course of Houlihan Lokey's business, certain of Houlihan Lokey's affiliates, as well as investment funds in which they may have financial interests, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, Astex, us, or any other party

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that may be involved in the Transaction and their respective affiliates or any currency or commodity that may be involved in the Transaction.

        Houlihan Lokey has in the past provided us with certain financial advisory services regarding Astex, for which Houlihan Lokey has received compensation. Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and other financial services to us, other participants in the Transaction or certain of their respective affiliates in the future, for which Houlihan Lokey and those affiliates may receive compensation.

Transaction Financing

        The consummation of the Transaction is not subject to financing contingency. SuperGen expects to finance the Transaction with (1) SuperGen's cash and cash equivalents and (2) Astex's cash and cash equivalents immediately after the closing, including any milestone payments received as a result of the partnered projects.

Support Agreement

        In connection with the Implementation Agreement, each of the members of our board of directors, in their capacities as stockholders (or future stockholders) of SuperGen, have entered into Support Agreements, which require them to vote in favor of the issuance of the shares and otherwise support the Transaction. As a group, these SuperGen stockholders represent approximately 1.0% of our outstanding stock. See the section entitled "Certain Additional Agreements Related to the Transaction—Support Agreement" beginning on page     •    , as well as the form of Support Agreement attached as Appendix B .

Irrevocable Undertakings and Lock-Up Agreements (see page     •    )

        In connection with the Implementation Agreement, certain officers, directors and other Astex affiliates have entered into Irrevocable Undertakings that require these shareholders to vote their shares of Astex capital stock in support of the Transaction. As a group, these Astex shareholders represent approximately 54% of the outstanding Astex capital stock. These shareholders also entered into Lock-Up Agreements, pursuant to which they agreed to certain restrictions regarding a lock up of their ability to trade shares of SuperGen received in connection with the Transaction. See the section entitled "Certain Additional Agreements Related to the Transaction—Irrevocable Undertakings" beginning on page     •    , as well as the forms of Irrevocable Undertakings attached as Appendix C and the form of Lock-Up Agreement attached as Appendix D .

Interests of our Directors and Executive Officers in the Transaction

        When you consider the recommendation of our board of directors to vote in favor of the proposals presented in this proxy statement, you should be aware that some of our executive officers and directors have interests in the Transaction that may be different from, or in addition to, the interests of other SuperGen stockholders. These interests could create a potential conflict of interest and may be perceived to have affected their decision to support or approve the Transaction. Our board of directors was aware of these potential conflicts of interest during its deliberations on the merits of the Transaction and in making its decisions in approving the Implementation Agreement and the Transaction.

        Our board of directors currently consists of six members. Of these six, Messrs. Casamento, Girardi, Goldberg, Lack and Manuso would continue as directors of the combined entity after the closing.

        We also expect that several members of our existing management team would continue to serve in executive positions with SuperGen following the closing, including Dr. Manuso as Chairman and Chief

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Executive Officer, Mr. Molkentin as Chief Financial Officer and Dr. Azab as our Chief Medical Officer.

No Appraisal or Dissenters' Rights

        Under applicable Delaware law, SuperGen stockholders are not entitled to dissenters' or appraisal rights with respect to the approval of the share issuance to Astex or the other proposals described in this proxy statement

Impact of the Transaction on Existing SuperGen Stockholders

        Before voting, each SuperGen stockholder should consider that, if the share issuance to Astex shareholders were to be approved by SuperGen stockholders, SuperGen would issue at the closing to certain former Astex securityholders shares representing 35% of the total outstanding shares of SuperGen common stock on the closing date after giving effect to the share issuance, or approximately 32,505,536 shares of SuperGen common stock (assuming an aggregate of 60,367,424 shares of SuperGen common stock issued and outstanding on the last trading day before the closing date. As a result, the closing of the Transaction would cause the percentage ownership of current SuperGen stockholders to decline materially. The SuperGen shares issued to the former Astex securityholders would increase materially the number of outstanding shares of SuperGen common stock. This means that the existing pre-closing SuperGen stockholders would own a smaller interest in SuperGen as a result of the share issuance to the former Astex securityholders. For purposes of example only, a hypothetical SuperGen stockholder who before this Transaction owned approximately 5% of our voting stock would own approximately 3.25% of our voting stock outstanding immediately after the closing. The ownership percentage of existing SuperGen stockholders would decrease further if any of the $30 million of deferred consideration were to be paid in shares of SuperGen common stock. Additionally, because we are assuming certain outstanding options of Astex in the Transaction, if these options (as converted) were to be exercised, our existing stockholders would suffer additional dilution.

Material United States Federal Income Tax Consequences

        The following is a summary of the anticipated material United States federal income tax consequences to SuperGen stockholders of the consummation of the Transaction. This summary is based upon existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect. This summary does not discuss all aspects of United States federal income taxation which may be important to particular SuperGen stockholders in light of their individual investment circumstances, such as stockholders subject to special tax rules ( e.g. , financial institutions, insurance companies, broker-dealers, partnerships and their partners, tax-exempt organizations (including private foundations), and non-United States stockholders) or to persons that will hold SuperGen stock as part of a straddle, hedge, conversion, constructive sale, or other integrated security transaction for United States federal income tax purposes, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not discuss any tax considerations related to state, local or non-United States tax laws. Each SuperGen stockholder is urged to consult its tax advisor regarding the United States federal, state, local, and non-United States income tax considerations of the adoption of the proposed amendments and the consummation of the proposed Transaction.

        SuperGen stockholders will not recognize any gain or loss for United States Federal income tax purposes as a result of the consummation of the Transaction.

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U.S. Federal or State and Foreign Regulatory Matters

        The Transaction is not subject to review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or the HSR Act (pursuant to which a filing was not required). The Transaction is subject to and conditional upon completion of Astex's procedures in compliance with Part 26 of the Companies Act 2006 and receipt of orders of the Court (1) sanctioning the scheme under section 899 of the Companies Act 2006 and (2) confirming the associated reduction of the entire issued share capital of Astex under section 641 of the Companies Act 2006.

Accounting Treatment

        The Transaction will be accounted for as an acquisition of Astex by SuperGen using the acquisition method of accounting under U.S. generally accepted accounting principles. Under the acquisition method of accounting, assets and liabilities of Astex will be, as of completion of the merger, recorded at their respective fair values and added to those of SuperGen, including an amount for goodwill representing the difference between the purchase price and the fair value of the identifiable net assets. Financial statements of SuperGen issued after the merger will include the operations of Astex beginning with the date the merger closes, but will not be restated retroactively to include the historical financial position or results of operations of Astex for the periods prior to the closing of the merger.

        Following the completion of the merger, the earnings of the combined company will reflect acquisition accounting adjustments, for example, amortization of identified intangible assets and additional stock compensation expense. Goodwill and acquired in-process research and development assets resulting from the acquisition will not be amortized but instead will be tested for impairment at least annually (more frequently if certain indicators are present). The final allocation of the purchase price will be determined after the merger closes and after completion of an analysis to determine the fair values of Astex assets and liabilities. Accordingly, the final allocation of purchase price may be materially different from the amounts reflected in the unaudited pro forma condensed combined financial statements contained in this proxy.

NASDAQ Shareholder Approval Requirements

        SuperGen is submitting the proposal to approve the share issuances to the former Astex securityholders to its stockholders for approval pursuant to Rule 5635 of the NASDAQ Marketplace Rules, or NASDAQ Rule 5635, which contains the qualitative listing requirements applicable to NASDAQ listed companies, such as SuperGen. Among other items, NASDAQ Rule 5635 requires stockholder approval prior to the issuance of securities in the following circumstances:

•

in connection with the acquisition of the stock or assets of another company if 20% of more of the common stock of the issuer outstanding before such issuance would be issued in connection with such acquisition; and



•

in connection with a transaction other than a public offering involving the sale or issuance by the issuer of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for less than the greater of book or market value of the stock.

        In addition, Rule 5635(b) requires stockholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the company.

        The holdings of the former Astex securityholders are expected to represent approximately 35% of the issued and outstanding shares of SuperGen's common stock as of immediately after the closing Additionally, because some or all of the deferred consideration may be payable by us in shares of our common stock, it is possible that the former Astex securityholders could hold significantly more than 35% of our outstanding capital stock post-closing of the Transaction. Also, because we are assuming the

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outstanding Astex options in connection with the Transaction, exercise of those options following the closing of the Transaction would result in the issuance of additional shares of our common stock. Accordingly, in order to ensure compliance with NASDAQ Marketplace Rule 5635, SuperGen must obtain the approval of the SuperGen stockholders for the issuances of the SuperGen common stock to the former Astex securityholders in the Transaction.

Listing on the NASDAQ Global Select Market of SuperGen Shares Issued Pursuant to the Transaction

        SuperGen has agreed to cause the shares to be issued to the former Astex shareholders pursuant to the Implementation Agreement to be approved for listing on the NASDAQ Global Select Market before the closing date, subject to notice of issuance.

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IMPLEMENTATION AGREEMENT

         The following discussion summarizes material provisions of the Implementation Agreement, a copy of which is attached as Appendix A to this proxy statement and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the Implementation Agreement and not by this summary. This summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the Implementation Agreement. We urge you to read the Implementation Agreement carefully in its entirety, as well as this proxy statement, before making any decisions regarding the Transaction.

         The representations and warranties described below and included in the Implementation Agreement were made by SuperGen, on the one hand, and Astex on the other hand, to each other as of specific dates. The assertions embodied in those representations and warranties were made for purposes of the Implementation Agreement and may be subject to important qualifications and limitations agreed to by SuperGen and Astex in connection with negotiating the terms of the Implementation Agreement. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to stockholders, or may have been used for the purpose of allocating risk between SuperGen and Astex rather than establishing matters as facts. The Implementation Agreement is described in this proxy statement and included as Appendix A only to provide you with information regarding the terms and conditions of the Transaction, and not to provide any other factual information regarding SuperGen, Astex or their respective businesses. Accordingly, you should not rely on the representations and warranties in the Implementation Agreement as characterizations of the actual state of facts about SuperGen or Astex, and you should read the information provided elsewhere in this proxy statement and in the documents that we incorporate by reference into this proxy statement for information regarding SuperGen and Astex and their respective businesses. See "Where You Can Find More Information" beginning on page     •    of this proxy statement.

Structure of the Transaction

        Subject to the terms and conditions of the Implementation Agreement and in accordance with a "scheme of arrangement" under the laws of the United Kingdom, the entire share capital of Astex, would be transferred to SuperGen, with the end result that all outstanding Astex shares of capital stock would be cancelled and Astex would become a wholly owned subsidiary of SuperGen. Shortly after the closing of the Transaction, SuperGen intends to change its corporate name to Astex Pharmaceuticals, Inc. The scheme of arrangement is a court process under the laws of the U.K., involving a series of hearings before the High Court in London, England. In exchange for the existing Astex shares, SuperGen would pay to the shareholders of Astex both initial consideration (consisting of cash and stock) and deferred consideration (consisting of cash, stock or a combination of cash and stock).

Closing of the Transaction

        The Transaction is subject to a number of closing conditions that must be either satisfied or waived before the Transaction can be completed. These closing conditions include (1) the requirement that we obtain the requisite vote of SuperGen stockholders in favor of the share issuance at our annual meeting, (2) the approval of the scheme of arrangement by a majority in number of each class of Astex's shareholders representing seventy-five percent (75%) or more in value of the Astex shares of that class voted by those Astex shareholders and (3) the resolutions required to implement the scheme of arrangement and set out in the notice of the Astex General Meeting being duly passed by the requisite majority at the Astex General Meeting. Additionally, once all closing conditions have been either satisfied or waived, the Transaction is subject to and conditional upon the receipt of orders of the High Court in London (1) sanctioning the scheme under section 899 of the Companies Act 2006 and (2) confirming the associated reduction of the entire issued share capital of Astex under

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section 641 of the Companies Act 2006. At that point, the Closing will take place on the date that is the later of (1) the date on which Astex delivers the Scheme Court Order to the Registrar of Companies, or (2) the date of registration by the Registrar of Companies of the Reduction Court Order, or (3) such later date as Astex and SuperGen mutually agree and to which the Court agrees.

Consideration in the Transaction

        Upon the closing, we will provide the following forms of initial consideration to our paying agent for distribution to the former Astex shareholders in accordance with the allocations provided by Astex:

        Initial Cash Amount.     $25 million in cash, as converted into U.K. Sterling at the applicable exchange rate on the business day immediately prior to the closing date of the Transaction. The applicable "exchange rate" to be used in converting the cash from U.S. dollars to U.K. Sterling is the spot rate of exchange for the purchase of U.K. Sterling in exchange for U.S. Dollars shown in the London edition of the Financial Times on the relevant business day (absent manifest error) or if no such rate is published on any day, the last such published rate, or if foreign exchange rates cease to be published by the Financial Times, the spot rate of exchange for U.K. Sterling on the relevant business day as determined from such publicly available source as we may reasonably select.

•

Initial Share Amount.   A number of new shares of SuperGen common stock calculated in accordance with the following formula:

X = (Y/Z) - Y,

Where X is the aggregate number of shares of SuperGen Common Stock to be issued at the closing to the former Astex shareholders,

Y = the number of existing shares of SuperGen common stock issued and outstanding as of the last trading day immediately prior to the closing of the Transaction, and

Z = 0.65.

        By way of illustration only, if SuperGen were to have 65 million shares outstanding on the day prior to the closing of the Transaction, we would be required to pay certain former Astex securityholders 35 million shares of our common stock on the closing, such that following the closing of the Transaction, the SuperGen pre-closing stockholders would hold 65% or 65 million of the 100 million post-closing SuperGen shares and the former Astex securityholders would hold 35% or 35 million of the 100 million post-closing SuperGen shares.

        Deferred Consideration.     Following the closing of the Transaction, we would pay $30 million in deferred consideration to our paying agent for distribution to the former Astex securityholders in accordance with the payment schedule provided by Astex. The timing and form of deferred consideration payments is variable. Although all $30 million in deferred consideration must be paid by the 30-month anniversary of the closing, the payment of the full amount may be accelerated under the terms and conditions described in greater detail below. Additionally, although the maximum amount of deferred consideration would be equal to $30 million, our audit committee may elect to pay that amount in cash, shares of SuperGen common stock or a combination of cash and stock.

•

Deferred Consideration Terms.   The following concepts are critical to an understanding of how and when the deferred consideration would be payable:



•

the deferred consideration period is the period of time commencing on January 1, 2011 and ending on (and including) the day immediately preceding the 30-month anniversary of the closing date of the Transaction;

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•

milestone payments are the gross payments actually received by Astex or SuperGen in connection with the achievement of performance milestones under partnered projects during the deferred consideration period;



•

partnered projects are certain specified contractual arrangements of Astex in effect as of January 1, 2011;



•

a payment period is a period of six months, with the first payment period commencing on the Closing Date and each successive payment period commencing on the day after the end of the previous payment period until the last payment period which will end on the last day of the deferred consideration period;



•

Sellers' Representative will be Abingworth Management Limited or such other representative appointed by the former shareholders of Astex from time to time; and



•

the share cap is the maximum number of new shares of SuperGen common stock issuable in the Transaction, which is equal to 52.5 million shares (subject to adjustment).



•

Timing of Payment of Deferred Consideration.   The former Astex securityholders will be entitled to receive the full $30 million in deferred consideration by no later than the 30-month anniversary of the closing. However, payment of the deferred consideration may be accelerated if either SuperGen or Astex receives milestone payments during the deferred consideration period. As milestone payments are received, one hundred percent (100%) of the first £5 million of milestone payments (if any) actually received by Astex or SuperGen will be allocated to payment of the deferred consideration. After we have paid out the first £5 million of milestone payments, then the amount we are required to pay with respect to each U.K. Sterling or U.S. Dollar of subsequent milestone payments will be reduced to 50% of the next milestone payments received. Accordingly, if Astex or SuperGen were to receive £50 million in milestone payments during the first payment period, then on the six-month anniversary of the closing, we would pay out all $30 million in deferred consideration. If, however, only £1 million in milestone payments were received during the first payment period, then on the six-month anniversary of the closing, we would pay out only £1 million in deferred consideration and the balance of deferred consideration would be paid in subsequent payment periods depending on the amount of milestones received. Even if no milestone payments are received, however, we would nevertheless pay $15 million of the deferred consideration at the end of the third payment period (that is, on the 18-month anniversary of the closing) and the balance of any remaining unpaid portion of the $30 million of deferred consideration at the end of the fifth payment period (that is, on the 30-month anniversary of the closing).



•

Limits on Payments of Deferred Consideration.   Because the first payment period includes a period of time before the Implementation Agreement was signed, any milestone payments received by Astex during that time would be eligible to be paid out at the end of the first payment period. However, in order to avoid paying those funds out more than once, the $30 million in aggregate deferred consideration will be reduced by the amount of any funds that have been, prior to the closing, (1) actually paid out as dividends or otherwise distributed to shareholders of Astex, (2) actually expended by Astex between the execution date of the Implementation Agreement and the Closing in violation of the negative covenants of the Implementation Agreement or (3) actually expended by Astex between January 1, 2011 and the date of the execution of the Implementation Agreement if such payments would have been in violation of the negative covenants of the Implementation Agreement had such expenditures occurred between the execution date of the Implementation Agreement and the Closing.



•

Form of Payment of Deferred Consideration.   Prior to each payment date, the audit committee of the board of directors of the combined company will elect to make any deferred consideration

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payments for the applicable payment period in the form of either cash, shares of SuperGen common stock or a mix of cash and stock. SuperGen will provide instructions for the payment of the applicable amount in the elected form to its paying agent based on allocations set forth in payment schedule provided by Astex. Subject to receipt by the paying agent of all required documentation and no objections from the Sellers' Representative to the calculation of the milestone payments, the paying agent will then pay out the applicable portion of the deferred consideration to the former Astex securityholders. If some or all of the deferred consideration is to be paid in shares of SuperGen common stock, the number of shares will be determined by dividing the dollar value of the deferred consideration to be paid in shares on any given payment date by the closing price of one share of SuperGen common stock on the last trading day of the applicable payment period. If some or all of the deferred consideration is to be paid in cash, the amount of milestone payments received will be converted from U.K. Sterling into U.S. Dollars at the exchange rate on the last business day before the date of the Implementation Agreement.

•

Payment.   On each payment date following the end of each payment period, we will cause our paying agent to distribute cash and, if applicable, a gross number of shares of our common stock equal to the portion of the deferred consideration payable in that period to the appropriate former Astex securityholders in accordance with the payment schedule provided by Astex. Our paying agent will not pay any portion of the deferred consideration until it has received a properly completed and executed original Form W-9 for U.S. residents or Form W-8 BEN for non-U.S. residents.



•

Sellers' Representative Expense Reimbursement Amount.   The paying agent will pay out of the first amounts of deferred consideration otherwise payable an amount in cash equal to $100,000 to the Sellers' Representative to be held by the Sellers' Representative in trust for the benefit of the former Astex shareholders. This amount will be deducted on a pro rata basis from each applicable former Astex shareholder's portion of the deferred consideration otherwise payable. This amount will be solely for the payment of out-of-pocket expenses incurred by the Sellers' Representative in connection with the performance of the Sellers' Representative's duties and obligations.



•

Warrant Consideration.   Any portion of either the initial consideration payable at closing or the deferred consideration that would have been paid to holders of Astex warrants had they exercised those warrants for Astex's preferred C shares prior to the closing would be withheld and retained for distribution to those warrant holders in the event that they exercise their warrants after the closing of the Transaction. If those warrant holders do not exercise their warrants prior to the expiration of the warrants, the withheld consideration will be forfeited to SuperGen.

Post-Signing Permitted Bonuses

        Following the Transaction closing but not later than two business days prior to the time the Share Incentive Plan (the "SIP") Participants are obligated to remit tax payments arising from the cancellation of the ordinary Astex shares held under the SIP, SuperGen is obligated to pay the participants in the SIP certain cash bonuses, in an amount of approximately £196,000 or $317,000 using the conversion exchange rate from OANDA on April 6, 2011 of $1.6195 per pound sterling, in order to cover the tax liability resulting from the cancellation of the ordinary Astex shares, grossed up for any tax liabilities incurred as a result of the bonus payment.

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Implementation of the Scheme

        Pursuant to the Implementation Agreement, the parties have agreed, subject to certain terms and conditions, to implement the scheme in accordance with, so far as reasonably practicable, the timetable established by the parties, with the overall intention that the scheme becomes effective on or before the August 31, 2011, but in any event, as reasonably practicable. Accordingly, the parties have agreed to each work diligently with a view to finalizing the scheme document and the options communications, as soon as reasonably practicable following the execution of the Implementation Agreement. Astex has agreed that it will not post the Scheme Document to its shareholders without the prior written consent of SuperGen.

        Astex has also agreed that it will take, or cause to be taken, all steps necessary to implement the scheme in accordance with, so far as reasonably practicable, the timetable established by the parties, and SuperGen will take, or cause to be taken, all steps requested by Astex and necessary to assist Astex in implementing the scheme in accordance with, so far as is reasonably practicable, the timetable established by the parties.

Timeline .

•

Astex will make all necessary applications to the High Court of Justice in England and Wales (the "Court") in connection with the implementation of the scheme in order to seek the Court's permission to convene the required Court meetings;



•

Astex will, as promptly as practicable following the order being made, publish the requisite documents, including the scheme document and the options communications, and thereafter, publish and/or post such other documents and information as the Court may approve or require in connection with the implementation of the scheme;



•

Astex will convene the required Court meetings and the general meeting of its shareholders to consider and, if thought fit, approve the scheme and other general meeting resolutions;



•

Astex will keep SuperGen informed on a regular basis of the number of proxy votes received in respect of the general meeting resolutions to be proposed at the Astex general meeting and the identity of the relevant shareholders;



•

following the court meetings and the general meeting, and assuming the Astex resolutions have been approved by the requisite votes of the Astex shareholders, Astex will, following receipt of the requisite SuperGen stockholder approval of the share issuance, seek the sanction of the Court to the scheme and take all other action necessary to make the scheme effective;



•

as soon as practicable after the sanction by the Court of the scheme, and in any event within one business day following the Court's sanctioning of the scheme, Astex will file a copy of the Court Orders with the Registrar in the United Kingdom; and



•

subject only to Astex's right to terminate the Implementation Agreement and pay the $6 million termination fee to SuperGen in the event of a superior offer, Astex's obligation to call, give notice of, convene and hold the Court meetings and to seek the requisite Astex shareholder approvals will not be limited to or otherwise affected by the commencement, disclosure, announcement or submission to Astex of any acquisition proposal or by any change in the recommendation of the Astex board of directors.

        Additional Obligations related to the Scheme.     According to the provisions of the Implementation Agreement, Astex will also:

•

procure the publication of the advertisements required by the Court;

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•

prior to the court meetings and the general meeting, keep SuperGen informed in writing of the number of proxy votes received in respect of the Astex's proposed resolutions;



•

promptly provide SuperGen with a copy of the Court Orders once obtained; and



•

take all reasonable steps to preserve the availability of the exemption from registration provided by Section 3(a)(10) of the Securities Act, including:



•

conducting a hearing on the fairness of the scheme to the Astex shareholders;



•

advising the Court before the hearing on the fairness of the scheme that, if the terms and conditions of the scheme are approved, its sanctioning of the scheme will constitute the basis for the shares of SuperGen common stock offered pursuant to the scheme to be issued without registration under the Securities Act in reliance on the exemption from registration provided by Section 3(a)(10); and



•

providing adequate notice of the hearing and an opportunity to attend the hearing and be heard to all persons to whom shares of SuperGen common stock are proposed to be issued pursuant to the scheme.

Representations and Warranties; Indemnification

        The implementation agreement contains customary representations and warranties made by Astex to SuperGen relating to, among other things:

•

organization; standing; charter documents; subsidiaries;

•

books and register;

•

capital structure;

•

subsidiaries;

•

authority; non-contravention; necessary consents;

•

financial statements;

•

internal controls;

•

no undisclosed liabilities;

•

bank accounts;

•

absence of certain changes or events;

•

taxes;

•

restrictions on business activities;

•

title to properties; absence of liens

•

compliance;

•

agreements; material contracts; commitments

•

transactions with affiliates;

•

environmental matters;

•

brokers' and finders' fees;

•

employee benefit plans and labor matters;

•

intellectual property; and

•

litigation.

        The implementation agreement also contains customary representations and warranties made by SuperGen to Astex, relating to, among other things:

•

organization; standing; power;

•

capital structure;

•

subsidiaries;

•

authority; non-contravention; necessary consents;

•

SEC filings;

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•

Internal controls;

•

absence of certain changes or events;

•

tax matters;

•

restrictions on business activities;

•

compliance;

•

material contracts;

•

environmental matters;

•

brokers' and finders' fees;

•

insurance;

•

intellectual property;

•

issuance of SuperGen common stock;

•

employee benefit plans and labor matters;

•

requisite vote;

•

opinion of financial advisor; and

•

litigation.

        There is no indemnification obligation in the Implementatin Agreement in the event of a breach of the representations or warranties.

Recommendation and Responsibilities of the Parties

•

Under the Implementation Agreement, Astex has agreed to ensure that (1) the scheme document it is required to distribute to its shareholders will incorporate an unqualified recommendation of the Astex board of directors to its shareholders to vote in favor of the proposed resolutions and (2) this recommendation shall not be withdrawn or qualified save (in the case of both (1) and (2)) to the extent that the Astex board of directors has determined to change its recommendation in accordance with the terms and conditions of the Implementation Agreement; and



•

Under the Implementation Agreement, SuperGen has agreed to ensure that (1) this proxy statement incorporates the recommendation of our board of directors to stockholders of SuperGen to vote in favor of SuperGen's proposed resolutions; and (2) this recommendation will not be withdrawn or qualified save (in the case of both (1) and (2)) to the extent that the SuperGen board of directors has determined to change its recommendation in accordance with the terms and conditions of the Implementation Agreement. We may, however, disclose to our stockholders a position, or any information, with respect to an acquisition proposal by a third party to the extent required under applicable law (including Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act) or stock exchange regulation.

Financial Statements

        Astex's audited balance sheets as of December 31, 2010 and 2009 and the related income statements, statements of comprehensive income, statements of changes in equity and cash flow statements, prepared in accordance with International Financial Reporting Standards (IFRS), for each of the three years in the period ended December 31, 2010 are included in this proxy under "Information about Astex".

        In addition, Astex will deliver to SuperGen its unaudited balance sheet dated as of not less than 3 business days prior to the closing date, and the related unaudited income statements of changes in equity and cash flow statement statements of income, cash flow and changes in equity for the period from January 1, 2011 to the date of the closing balance sheet, in each case prepared in accordance with IFRS (except that unaudited financial statements may not have notes thereto and other presentation items that may be required by IFRS and are subject to normal and recurring year-end adjustments that

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are not reasonably expected to be material in amount) applied on a consistent basis throughout the relevant periods

Governance Matters

        Prior to the closing of the Transaction, SuperGen will increase the size of the board of directors from six directors to nine directors effective as of immediately following the closing. The four newly created directorships will be filled by four nominees designated by Astex. The selection of the Astex-nominated directors is subject to the determination by the Nominating and Governance Committee of SuperGen's board of directors that (1) each of the nominated representatives meets the qualifications of SuperGen for service on SuperGen's board or directors and (2) that the addition of the Astex designees to the SuperGen board of directors would not cause fewer than a majority of the resulting SuperGen board members to qualify as "independent" under the rules and regulations of the SEC and NASDAQ. If the Nominating and Governance Committee determines that one or more of the Astex nominated representatives is not qualified to serve on the SuperGen board, then the Nominating and Governance Committee must notify Astex of the reasons for its conclusion prior to the closing and Astex will have the right to nominate replacement representatives to serve on the SuperGen board of directors.

        As of the date of this proxy statement, the Astex nominees are Harren Jhoti, Peter Fellner, Ismail Kola and Timothy Haines. Following the closing of the Transaction, the nine-member SuperGen board of directors would establish the corporate governance structure for the combined company, which would include the appointment of Peter Fellner as the Vice Chairman of the board of directors and the appointment of Harren Jhoti as President. In addition, the SuperGen board of directors would initially reconstitute its standing committees as follows: (1) the Audit Committee would be made up of Charles Casamento (as Chairman), Thomas Girardi and Walter Lack; (2) the Compensation Committee would be made up of Walter Lack (as Chairman), Thomas Girardi and Timothy Haines; and (3) the Governance and Nominating Committee would be made up of Charles Casamento, Peter Fellner, Thomas Girardi, Allan Goldberg, Timothy Haines, Ismail Kola and Walter Lack (as Chairman). The current Pharmaceutical Sub-Committee of the board of directors would be disbanded.

No Solicitation

        Both SuperGen and Astex (as well as their respective representatives) are not permitted to take any of the following actions until either the Transaction closes or the Implementation Agreement in properly terminated:

•

solicit, seek, knowingly encourage or initiate any inquiry, negotiations or discussions, or enter into any agreement, with respect to any acquisition proposal;



•

disclose any information not customarily disclosed concerning its (or any of its subsidiary's) business, technologies or properties, or afford to any person access to their respective properties, technologies, books or records, not customarily afforded such access; and



•

assist or cooperate with any third party to make any acquisition proposal.

        If either party receives any offer, proposal, or request concerning an acquisition proposal, or any request for disclosure or access, that party must promptly notify the other party and provide the other party with the identity of the third party making the offer or proposal and the specific terms of the offer or proposal. In order to enforce the "no shop" provision of the Implementation Agreement, each party is entitled to an immediate injunction, without proving the inadequacy of money damages as a remedy and without posting any bond or other security, in the event of a breach by the other party.

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Directors' and Officers' Indemnification and Insurance

        For a period of six years following the closing of the Transaction, SuperGen will honor the obligations of Astex under (1) each indemnification agreement between Astex and certain of its officers and directors, and (2) any indemnification, expense advancement and exculpation provision contained in Astex's organizational documents.

        In addition, the Implementation Agreement allows Astex to obtain a prepaid "tail" that would provide the indemnified persons with directors' and officers' liability insurance for a period ending no earlier than the sixth anniversary of the Transaction closing.

Purchaser Name Change

        Following the Transaction closing, SuperGen will use its commercially reasonable efforts to change its corporate name from "SuperGen, Inc." to "Astex Pharmaceuticals, Inc." through a short-form merger under Delaware law. Prior to the Transaction closing, Astex has agreed to take all actions necessary to facilitate the proposed name change, including, without limitation, reserving the name "Astex Pharmaceuticals, Inc." in the states of Delaware and California, reserving the ticker symbol "ASTX" with NASDAQ and preparing for the transfer, as necessary, of the name and ticker symbol.

Interim Conduct of Business

        Both SuperGen and Astex have agreed that, during the period between the signing of the Implementation Agreement and the earlier of the termination of the Implementation Agreement or the closing of the Transaction, each company will: (a) carry on its business in the usual, regular and ordinary course in substantially the same manner as conducted prior to the date of the Implementation Agreement and (b) use its commercially reasonable efforts to stay current on payment of its debts and taxes and to otherwise preserve intact its present business, with the goal of preserving unimpaired the good will of its businesses.

        Additionally, both SuperGen and Astex agreed not to engage in certain types of conduct without the express written consent of the other party (consent not to be unreasonably withheld), including the following:

•

purchase or redeem shares of its capital stock or that of a subsidiary or otherwise reduce its authorized or issued share capital, except in the event of repurchasing shares upon the termination of an employee;



•

declare dividends or make any other distributions of capital stock or split, combine or reclassify any capital stock;



•

transfer or license any intellectual property except in the ordinary course of business;



•

enter into any contract except in the ordinary course of business that materially limits its ability to conduct or compete in its business, or that provides unlimited indemnification;



•

sell, lease, encumber or otherwise dispose of any tangible assets except sales of inventory in the ordinary course of business;



•

make a loan, advance on investment in a third party or forgive or discharge any loans, except in the ordinary course of business;



•

grant, pay or enter into any agreement or amendment to grant or pay severance or termination pay or the acceleration of vesting or other benefits except pursuant to written agreements already in place;

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•

hire any officers or employees (except for consultants or contractors retained for no more than six months and for no more than $25,000 of obligations during that time) or terminate any employee except for cause or take any action that would allow an employee to claim a constructive termination for good reason;



•

acquire any other business or participate in a joint venture;



•

amend the party's certificate of incorporation or other charter documents, except as contemplated by the Implementation Agreement; and



•

permit any insurance policies to expire without renewing or replacing them on comparable terms.

Restrictions on Newly Issued or Issuable SuperGen Shares.

        U.S. Securities Law.     All of the shares of SuperGen common stock to be issued in the Transaction will be issued without registration under the Securities Act in reliance on an exemption from registration provided by Section 3(a)(10) of the Securities Act. Accordingly, if the scheme of arrangement is approved by the High Court, all of the newly issued or issuable shares of SuperGen common stock would be freely tradable under the Securities Act, subject only to any lock-up agreements and any restrictions under Rule 144 or Rule 145 under the Securities Act that are applicable to the former Astex shareholders who become affiliates of SuperGen following the Transaction.

        Execution of Lock-Up Agreements.     The Sellers' Representative will be authorized and directed to enter into the Lock-Up Agreements on behalf of certain former Astex shareholders (including officers, directors and certain large shareholders of Astex) under power of attorney conferred by operation of the scheme. In the event that the Sellers' Representative is unable to or for any reason does not execute a Lock-Up Agreement, then an authorized officer of SuperGen will be authorized to enter into the Lock-Up Agreement on behalf of the same group of former Astex shareholders.

        Coordinated Selling Agreement.     Several significant shareholders in Astex may enter into a Coordinated Selling Agreement whereby they would agree to coordinate the sale of their shares of SuperGen common stock, in addition to the sale restrictions imposed by the Lock-Up Agreement more fully described in this proxy statement on page     •    . The Coordinated Selling Agreement does not go into effect until the closing of the Transaction and, prior to that time, any one of the subject shareholders may elect to eliminate the requirement for the Coordinated Selling Agreement. Even if the Coordinated Selling Agreement does not go into effect, the Lock-Up Agreements between certain former Astex shareholders and SuperGen would remain in effect for a period of eight months following the closing of the Transaction.

Rights Attaching to SuperGen Shares

        The shares of SuperGen common stock issuable in the Transaction would be issued on identical terms to the existing shares of SuperGen common stock, including the right to vote and to receive and retain all dividends and other distributions declared, paid or made on SuperGen shares after the closing date.

Sellers' Representative

        Abingworth Management Limited will be the first Sellers' Representative. The former Astex shareholders will indemnify and hold Abingworth and its directors, officers, agents and employees harmless against any losses, claims, damages or liabilities to any person arising out of or in connection with Abingworth's role as Sellers' Representative. Following the closing, the former Astex shareholders who hold 75% or more of the shares of SuperGen common stock issuable at the closing will have the

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ability to replace Abingworth or any other Sellers' Representative from time to time and appoint another person in their place upon at least 10 days' written notice to the Sellers' Representative and to SuperGen.

Conditions to Closing of the Transaction

        The Transaction will not close until the scheme has become unconditional and become effective not later than August 31, 2011, or a later date if Astex and SuperGen jointly agree and, if required, as the Court may allow.

        The scheme is conditional upon:

•

receiving the approval of the scheme by a majority in number of each class of the Astex shareholders, who are on the register of members of Astex at 6:00 p.m. on the day two days before the Court meetings and who are present and voting either in person or by proxy, at the Court meetings and who represent seventy-five percent (75%) or more in value of the shares of that class voted by those shareholders;



•

receiving the resolution(s) required to implement the scheme and set out in the notice of the Astex general meeting being passed by the requisite majority at the Astex general meeting;



•

the U.K. Court's sanction of the scheme and copies of the Court Orders being delivered to the Registrar of Companies;



•

receipt of the requisite vote of the SuperGen stockholders requested in this proxy statement;



•

the Implementation Agreement not having been terminated or having been terminated in accordance with its terms prior to the scheme Court hearing; and



•

the conditions to closing enumerated in the Implementation Agreement having been satisfied or waived.

Conditions to Closing Included in the Implementation Agreement:

        Neither SuperGen nor Astex is required to close the Transaction unless the following conditions have been satisfied as of immediately prior to the commencement of the Court hearing to approve the scheme:

•

both the required Astex shareholder approvals and the required SuperGen stockholder approvals have been obtained.



•

none of the parties is subject to any order or injunction of a court of competent jurisdiction that prohibits the consummation of the transactions contemplated by the Implementation Agreement.



•

no statute, rule, regulation or order shall have been enacted, entered, enforced or deemed applicable to the Transaction by a governmental entity that makes the Transaction or the scheme illegal.



•

other than the filing of the Court Orders with the Registrar, all other authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any governmental entity in connection with the Transaction, shall have been filed, been obtained or occurred on terms and conditions which could not reasonably be likely to have either a material adverse effect on SuperGen or a material adverse effect on Astex.

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        Astex is not required to close the Transaction unless the following conditions have been satisfied or waived by Astex immediately prior to the commencement of the Court hearing to approve the scheme:

•

Representations and Warranties.   Certain of SuperGen's representations and warranties must be accurate both as of the date of the Implementation Agreement and as of the date immediately prior to the commencement of the Court hearing to approve the scheme. The remainder of SuperGen's representations and warranties must be (1) accurate as of the date of the Implementation Agreement unless the inaccuracies would not be material to SuperGen's business, operations or financial condition and (2) accurate as of the date immediately prior to the commencement of the Court hearing to approve the scheme unless the inaccuracies would not have a material adverse effect upon SuperGen.



•

Agreements and Consents.   SuperGen must have performed or complied in all material respects with all agreements and covenants required to be performed by it at or prior to the date immediately prior to the commencement of the Court hearing to approve the scheme.



•

No Astex Material Adverse Effect.   No material adverse effect on SuperGen shall have occurred since the date of the Implementation Agreement and be continuing.



•

NASDAQ Listing.   SuperGen must have approved for listing on NASDAQ, subject to official notice of issuance, the shares of SuperGen common stock to be issued in the Transaction.

        SuperGen is not required to close the Transaction unless the following conditions have been satisfied or waived by SuperGen:

•

Representations and Warranties.   Certain of Astex's representations and warranties must be accurate both as of the date of the Implementation Agreement and as of the date immediately prior to the commencement of the Court hearing to approve the scheme. The remainder of Astex's representations and warranties must be (1) accurate as of the date of the Implementation Agreement unless the inaccuracies would not be material to Astex's business, operations or financial condition and (2) accurate as of the date immediately prior to the commencement of the Court hearing to approve the scheme unless the inaccuracies would not have a material adverse effect upon Astex.



•

Agreements and Consents.   Astex must have performed or complied in all material respects with all agreements and covenants required to be performed by it at or prior to the date immediately prior to the commencement of the Court hearing to approve the scheme.



•

No Purchaser Material Adverse Effect.   No material adverse effect on Astex shall have occurred since the date of the Implementation Agreement and be continuing.



•

Employees.   Each of the Astex employees designated on a schedule by SuperGen and at least 4 of the Astex employees designated by SuperGen on a separate schedule must continue to be employees of Astex as of the date immediately prior to the commencement of the Court hearing to approve the scheme.



•

Payment Schedule.   Astex must have delivered to SuperGen the consideration allocation schedule.

        A "material adverse effect" generally means any event, circumstance, change or effect that is, or is reasonably likely to be, material adverse to the business, assets (whether tangible or intangible) and liabilities taken together, operations or financial condition of the relevant party and its subsidiaries taken as a whole(including any adverse effect resulting from the loss of employees), but does not include a variety of specifically negotiated potential adverse effects, including, without limitation, (1) adverse effects primarily attributable to changes or conditions generally affecting the industry in which the relevant party operates so long as the adverse effect does not have a disproportionately adverse effect on the relevant party as compared to companies operating in the same industry,

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(2) adverse effects primarily resulting from compliance with the terms and condition of the Implementation Agreement, including the public announcement of the Transaction, (3) adverse effects arising directly or indirectly from or relating to general economic, business, financial, market or political conditions so long as the adverse effect does not have a disproportionately adverse effect on the relevant party as compared to companies operating in the same industry, (4) any adverse effects arising directly or indirectly from or relating to fluctuations in the value of the U.S. Dollar or the Great British Pound Sterling, (5) any adverse effects arising directly or indirectly from or otherwise relating to any act of terrorism, war, calamity or other similar event and (6) any legal proceedings made or brought by any current or former stockholders of the relevant party against that party or the members of the board of directors of that party relating to, arising out of, or in any way in connection with the Implementation Agreement, the scheme of arrangement or the Transaction.

         Termination Payments.     Astex will pay SuperGen the $6 million termination fee if the agreement is terminated:

•

by Astex if (1) it has received an unsolicited acquisition proposal to acquire Astex, (2) its board of directors determines that the third party acquisition proposal is a "superior offer" to SuperGen's offer and (3) Astex has provided SuperGen with adequate notice of the third party offer and provided SuperGen with an opportunity to top the third party offer, or



•

by either SuperGen or Astex if (1) (a) for any reason the Transaction has not closed by August 31, 2011 or (b) Astex has not obtained its required stockholder approval, and (2) within six months following the termination of the Implementation Agreement, Astex enters into a definitive agreement or executes a letter of intent, memorandum of understanding, heads of terms or equivalent document with respect to an acquisition proposal and (3) Astex subsequently consummates a transaction contemplated by the acquisition proposal; or



•

by SuperGen if the Astex board of directors (1) changes its recommendation, (2) approves, endorses, recommends or authorizes Astex to enter into a definitive agreement with respect to any superior offer, or (3) passes a resolution to do any of these actions.

SuperGen will pay Astex the $6 million termination fee if the agreement is terminated:

•

by SuperGen if (1) it has received an unsolicited acquisition proposal and (2) the SuperGen board of directors determines that the third party acquisition proposal is a superior offer, or



•

by either SuperGen or Astex if (1) (a) for any reason the Transaction has not closed by August 31, 2011 or (b) SuperGen has not obtained its required stockholder approval, and (2) within six months following the termination of the Implementation Agreement, SuperGen enters into a definitive agreement or executes a letter of intent, memorandum of understanding, heads of terms or equivalent document with respect to an acquisition proposal and (3) SuperGen subsequently consummates a transaction contemplated by the acquisition proposal; or



•

by Astex if the SuperGen board of directors (1) changes its recommendation, (2) approves, endorses, recommends or authorizes SuperGen to enter into a definitive agreement with respect to any superior offer, or (3) passes a resolution to do any of these actions.

        A "superior offer" is an acquisition proposal made by a third party to acquire, directly or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business combination, all or substantially all of the assets of, or more than 50% of the total outstanding voting securities of the Astex or SuperGen, as the case may be, which board of directors of Astex or SuperGen, as applicable, has in good faith concluded (following consultation with its outside legal counsel), taking into account, among other things, the legal, financial, regulatory and other aspects of the offer and the third party making the offer, would, if timely consummated in accordance with its

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terms, be more favorable to the stockholders of Astex or SuperGen, as applicable, from a financial point of view than the Transaction.

Acquisition Proposals

        If either Astex or SuperGen receives any acquisition proposal, or any material modification of or material amendment to any acquisition proposal or any request for non-public information or inquiry which could reasonably be expected to lead to an acquisition proposal, the receiving party must provide the other party with written notice of the material terms and conditions of the acquisition proposal, request or inquiry, and the identity of the third party making any the acquisition proposal, request or inquiry and a copy of all written and electronic materials provided in connection with the acquisition proposal, request or inquiry.

        The recipient party must keep the other party informed in all material respects of the status and details (including all amendments or proposed amendments) of any acquisition proposal, request or inquiry and shall promptly provide the other party with a copy of all written and electronic materials subsequently provided in connection with the acquisition proposal, request or inquiry.

        If the board of directors of the recipient party in good faith concludes (following consultation with its outside legal counsel) that the unsolicited acquisition proposal is, or is reasonably likely to lead to, a superior offer, it may then take any or all of the following actions if it is otherwise in compliance with its obligations and it has not already received its shareholder approval:

•

furnish non-public information to the third party making the acquisition proposal (after giving proper notice to the other party and requiring the third party to execute a confidentiality agreement at least as restrictive as the one with the other party);



•

engage in negotiations with the third party with respect to the acquisition proposal after providing notice to the other party; and



•

in the case of SuperGen, provided that our board of directors has in good faith concluded (following consultation with its outside legal counsel) that taking such action is required in order for our board of directors to comply with its fiduciary duties to our stockholders, we may enter into a binding written agreement concerning a transaction that constitutes a superior offer and terminate the Implementation Agreement.

        An "acquisition proposal" means any bona fide written offer or proposal to acquire, directly or indirectly, fifteen percent or more of (1) the consolidated assets of either (a) Astex and its subsidiaries (taken as a whole) or (b) SuperGen and its subsidiaries (taken as a whole), or (2) the equity or other voting power of either Astex or SuperGen, in each case, whether by merger, consolidation, purchase of assets, tender offer, license or otherwise, or effect any such transaction (it being understood and agreed that, in the case of SuperGen, open market acquisition of SuperGen common stock by any third party are not to be deemed to be acquisition proposals).

Changes in Board Recommendations

        Before the Astex board of directors may change its recommendation, it must comply with the following procedures. First, if, prior to Astex obtaining the requisite shareholder approval, its board of directors determines that an acquisition proposal received without violating any no solicitation provisions constitutes a superior offer, it must promptly deliver notice in writing to SuperGen of the superior offer which notice must include the material terms and conditions of the superior offer. Second, at SuperGen's written request, Astex must negotiate in good faith with SuperGen for a period of five business days following SuperGen's receipt of Astex notice of the superior offer. Third, if, prior to the end of this period, SuperGen delivers a written revised offer to Astex that amends the terms of the Transaction, then the Astex board of directors must hold a meeting to consider the revised offer

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from SuperGen and invite representatives of SuperGen to present the revised offer. Fourth, following the meeting, if the Astex board of directors has in good faith concluded (following consultation with its outside legal counsel) that (1) the acquisition proposal from the third party remains a superior offer when compared to the revised offer from SuperGen, and (2) taking such action is required in order for Astex board to comply with its fiduciary duties to the shareholders of Astex, Astex may then take any or all of the following actions following delivery of written notice to SuperGen that Astex intends to take such action:

•

to enter into a binding written agreement concerning a transaction that constitutes a superior offer and terminate the Implementation Agreement with SuperGen; and



•

withdraw the scheme of arrangement or change the Astex board recommendation.

        The Astex board may withdraw, modify or amend its recommendation only if the change is in response to an unsolicited acquisition proposal made to Astex which is a superior offer that has not been withdrawn, and the change in recommendation may not be made until either (1) the 5 day period lapses without SuperGen making any revised offer or (2) the Astex board of directors has complied with all the procedures outlined above and delivered written notice to SuperGen advising it of its determination.

        The SuperGen board of directors is permitted to withdraw, modify or amend adversely or qualify its recommendation only if the change is in response to an unsolicited acquisition proposal made to SuperGen which it determines to be a superior offer, and the SuperGen board of directors has in good faith concluded (following consultation with its outside legal counsel) that taking such action is required in order for it to comply with its fiduciary duties to the stockholders of SuperGen. Such a change in the recommendation by the SuperGen board of directors may not be made until the fifth business day following Astex's receipt of written notice from SuperGen advising Astex that the SuperGen's board of directors intends to take such action and specifying the reasons therefor, including the terms and conditions of any superior offer that is the basis for the proposed action by SuperGen's board of directors.

Termination

        The Implementation Agreement provides that the agreement may be terminated in the following circumstances:

•

as agreed in writing between Astex and SuperGen at any time prior to the closing of the Transaction;



•

by either Astex or SuperGen at any time prior to the closing of the Transaction:



•

if the closing has not occurred by August 30, 2011, subject to certain exceptions;



•

if the Transaction has been enjoined or declared illegal;



•

if SuperGen does not obtain the requisite approval of its stockholders; or



•

if Astex does not obtain the requisite approvals of its shareholders;



•

upon a non-curable or non-cured breach of any covenant or agreement on the part of the other party;



•

in the event of a material adverse effect on the other party;



•

if the other party's board of directors changes its recommendation or takes certain other prohibited actions; or

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•

if the other party receives an unsolicited acquisition proposal, determines that the acquisition proposal is a superior offer, otherwise complies in full with its obligations and pays the applicable termination fee.

Costs

        In general, each party is obligated to pay its own costs and expenses.

Miscellaneous

        Specific Performance.     Astex and SuperGen agree that damages may not be an adequate remedy for any breach or threatened breach by it or its representatives of the Implementation Agreement and that the party who is not in breach will be entitled without proof of special damage to injunctive relief and other equitable remedy (including specific performance).

        Governing Law.     The approval of the scheme by the shareholders is subject to the laws of England and Wales. The Implementation Agreement will be governed by, and will be determined under, the internal laws of the State of Delaware applicable to contracts between residents of the State of Delaware to be performed solely in the State of Delaware, i.e ., without regard to choice of law principles.

        Survival of Representations and Warranties.     The Implementation Agreement provides that none of the representations and warranties of Astex or SuperGen as set forth in the Implementation Agreement will survive the closing of the Transaction.

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CERTAIN ADDITIONAL AGREEMENTS RELATED TO THE TRANSACTION

         Pursuant to the Implementation Agreement, certain SuperGen and Astex officers, directors and shareholders will execute and deliver the Support Agreements or the Irrevocable Undertakings, as the case may be. The following discussion summarizes some of the material provisions of the Support Agreement, included with this proxy statement as Appendix B , and the material provisions of the Irrevocable Undertakings, included with this proxy statement as Appendix C and the Lock-Up Agreement, included with the proxy statement as Appendix D . The rights and obligations of the parties to these agreements are governed by the express terms and conditions of the agreements and not by this summary. This summary may not contain all of the information about the agreements that is of importance to you and is qualified in its entirety by reference to the complete text of the agreements. We encourage you to read the Support Agreement, Irrevocable Undertakings and Lock-Up Agreement in their entirety for a more complete understanding of the Agreements.

Lock-Up Agreement

        Under the terms of the scheme of arrangement, if the Court approves the scheme, it will authorize the Sellers' Representative (on behalf of certain the former Astex shareholders) to enter into Lock-Up Agreements with SuperGen following the closing of the Transaction that will limit the ability of those former Astex shareholders to sell 25% of their stock until two months after the closing of the Transaction, another 25% until four months after the closing, another 25% until six months after the closing and the remaining 25% until eight months after the closing. Shareholders subject to the Lock-Up Agreement may transfer subject shares to a family member or trust as long as the transferee agrees to be bound by the terms of the Lock-Up Agreement. Nothing in the Lock-Up Agreement prohibits shareholders from selling or disposing of shares in connection with an acquisition, merger or reorganization approved by our board of directors, or a tender or exchange offer for SuperGen stock.

        Additionally, certain Astex shareholders may enter into a Coordinated Selling Agreement with one another that would allow for a coordinated sale of any SuperGen shares that members of that group intend to sell during the 12 month anniversary following the closing of the Transaction. SuperGen is not a party to the Coordinated Selling Agreement and, as a result, the Coordinated Selling Agreement will only become effective if finalized and agreed upon among certain of the Astex shareholders.

Support Agreement

        Each of the directors of SuperGen (including directors who are stockholders and directors who hold only options for SuperGen stock) entered into Support Agreements with Astex solely in their capacities as stockholders or potential stockholders of SuperGen. These Support Agreements require each director to agree to vote in favor of all proposals to approve the Transaction, and any related matters. The Support Agreements provide that any proxy submitted in connection with the Support Agreement cannot be revoked by the director. Additionally, if the director should exercise any stock options of SuperGen, prior to the closing date of the Transaction, the Support Agreements require that all of the shares that the director receives upon exercise of the stock option must be voted in favor of all proposals to approve the Transaction and any related matters.

        Non-Dealing Provisions and Covenants.     The Support Agreements contain the following non-dealing provisions and covenants.

        Each director has agreed that he will not, and will make sure (so far as he is able), that any registered holder of shares subject to the Support Agreement will not, directly or indirectly:

•

sell, transfer, charge, encumber, grant any options over or otherwise dispose of, or permit the sale, transfer, charging, encumbering or granting of any option over or other disposal of, all or any of the shares to the Support Agreement or of any interest therein provided, except pursuant

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to the Transaction. However, the director may complete a sale or transfer of subject shares to any member of the director's immediate family, or to a trust for the benefit of the director or any member of the director's immediate family, or upon the death of the director provided that the transferee agrees in writing to be bound by all of the terms of the Support Agreement; nor

•

accept, encourage or agree to accept any other offer for all or any of the shares subject to the Support Agreement or any other shares in the capital stock of SuperGen whether conditional or unconditional; nor



•

without the written consent of Astex, purchase or otherwise acquire (other than by exercise of existing stock options), directly or indirectly, any other securities in SuperGen; nor



•

convene any meeting of the stockholders of SuperGen in any capacity as a stockholder, nor exercise or permit the exercise of the voting rights attaching to the shares subject to the Support Agreement in any manner which the director knows would be likely to frustrate the Transaction or prevent the Implementation Agreement becoming effective; nor



•

enter into any agreement, arrangement or obligation or permit any agreement, arrangement or obligation to be entered into in relation to the shares subject to the Support Agreement with any person whether conditional or unconditional to do all or any of the acts enumerated above.

        Termination.     The terms of each Support Agreement will terminate on the earliest of (1) the closing date of the Transaction, (2) the date (if any) on which the scheme of arrangement lapses or is withdrawn, and (3) the date (if any) on which the Implementation Agreement terminates or is terminated. Upon the earliest of (1), (2), or (3) the Support Agreement will be deemed void and have no further force or effect, except in relation to any rights which may have accrued following any breaches of the terms of the Support Agreement which occurred prior to the termination.

        Failure to Comply.     Pursuant to the terms of the Support Agreements, each director has agreed that if the director fails to comply with his obligations under the Support Agreement, money damages may not be an adequate remedy and therefore the director will agree that, in the event of any breach or threatened breach by the director of any covenant or obligation contained in the Support Agreement, Astex will be entitled (in addition to any other remedy that may be available to it) to seek to obtain: (1) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation; and (2) an injunction restraining such breach or threatened breach.

        Power of attorney.     Under the terms of each Support Agreement, each director has irrevocably appointed, Astex and any director of Astex as his attorney to execute and deliver all such documents and do all such acts and things as may be necessary for, or incidental to, the voting of the shares subject to the Support Agreements and/or the performance of his obligations under the Support Agreements.

Irrecovable Undertakings

        Similar to the Support Agreements signed by directors of SuperGen with Astex, certain officers, directors and shareholders of Astex (each of whom holds shares in Astex) entered into one of two forms of "Irrevocable Undertakings" with SuperGen. The terms of the Irrevocable Undertakings require these Astex shareholders to agree to do the following:

•

exercise, or procure the exercise of, all voting rights attaching to the shares subject to the Irrevocable Undertaking to vote in favor of all resolutions to approve the scheme of arrangement, and any related matters proposed at any general or class meeting (and the court convened meetings of Astex to be convened and held in connection with the scheme of arrangement, or at any adjournment of any such meeting);

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•

execute, or procure the execution of, any forms of proxy in respect of the shares subject to the Irrevocable Undertaking required by SuperGen appointing any person nominated by SuperGen to attend and vote at any General Meeting or Court Meeting in favor of the resolutions to approve the scheme of arrangement, and any related matters, and will ensure that any such executed forms of proxy are received by Astex not later than 3.00 p.m.;



•

not revoke, or cause the revocation of, the terms of any proxy submitted in accordance the Irrevocable Undertaking other than by attendance at any General Meeting or Court Meeting where they vote in favor of the scheme of Arrangement in accordance with the Irrevocable Undertaking;



•

if the director or shareholder holds share options he, she or it agrees that if the share options become exercisable in accordance with the rules of the share schemes as a result of the Transaction, he, she or it will either:



•

accept the option proposals; or



•

exercise in full the relevant option and vote in favor of all resolutions to approve the scheme of arrangement.

        Non-dealing and Covenants.     Unless and until the scheme of arrangement lapses or is withdrawn, or the Implementation Agreement is terminated, each Astex shareholder subject to an Irrevocable Undertaking will not, directly or indirectly:

•

sell, transfer, charge, encumber, grant any options over or otherwise dispose of, or permit the sale, transfer, charging, encumbering or granting of any option over or other disposal of, all or any of the shares subject to the Irrevocable Undertaking, subject to certain limited exceptions; nor



•

accept, encourage or agree to accept any other offer for all or any of the shares subject to the Irrevocable Undertaking or any other shares in the capital stock of Astex whether conditional or unconditional; nor



•

vote in favor of any of the following to the extent that Astex is prohibited from taking any such action by the Implementation Agreement:



•

any resolution to approve any scheme of arrangement in relation to Astex which is proposed in competition with the Transaction;



•

any sale, lease, sublease, license, sublicense or transfer of a material portion of the rights or other assets of Astex;



•

any reorganization, recapitalization, dissolution or liquidation of Astex;



•

except as may be required in connection with the scheme of arrangement, any amendment to the Astex articles of association;



•

except as may be required in connection with the scheme of arrangement, any material change in the capitalization of Astex or in Astex's corporate structure; or



•

any other action which is intended, or would reasonably be expected to impede, interfere with, materially delay or adversely affect the Transaction or any of the other transactions contemplated by the Implementation Agreement; nor



•

without the written consent of SuperGen, purchase or otherwise acquire (other than by exercise of existing share options) directly or indirectly any other securities in Astex; nor



•

convene any meeting of the members of Astex in any capacity as a shareholder, nor exercise or permit the exercise of the voting rights attaching to the shares subject to the Irrevocable

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Undertaking in any manner likely to frustrate the Transaction or prevent the scheme of arrangement from becoming effective; nor

•

enter into any agreement, arrangement or obligation or permit any agreement, arrangement or obligation to be entered into in relation to the shares subject to the Irrevocable Undertaking with any person whether conditional or unconditional to do all or any of the acts enumerated above ; nor



•

during the pre-closing period, take any action that Astex is prohibited from taking under the "no shop" provision of the Implementation Agreement.

        Termination.     The terms of the Irrevocable Undertakings will terminate on the earliest of (1) the closing of the Transaction, (2) the date (if any) on which the scheme of arrangement lapses or is withdrawn and (3) the date (if any) on which the Implementation Agreement terminates or is terminated, and upon and following any such termination, the Irrevocable Undertakings will be deemed void and have no further force or effect, except with respect to those rights which accrued following any breaches of the Irrevocable Undertaking which occurred prior to such date.

        Failure to Comply.     Each Astex shareholder subject to an Irrevocable Undertaking agrees that in the event of their failure to comply with the obligations under the Irrevocable Undertaking, money damages may not be an adequate remedy and that, in the event of any breach or threatened breach by them of any covenant or obligation contained in the Irrevocable Undertaking, SuperGen will be entitled (in addition to any other remedy that may be available to it) to seek to obtain: (1) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation; and (2) an injunction restraining such breach or threatened breach.

        Power of attorney.     Each Astex shareholder subject to an Irrevocable Undertaking irrevocably appoints SuperGen and any director of SuperGen as his/her/its attorney to execute and deliver all documents and do all such other acts and things as may be necessary for, or incidental to, the voting of the shares subject to the Irrevocable Undertaking.

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BOARD AND MANAGEMENT FOLLOWING THE CLOSING

        This section describes the material board and management arrangements that will apply if the Transaction successfully closes.

Board of Directors

        After the closing of the Transaction, the SuperGen board of directors will consist of nine directors. The SuperGen board will initially include four Astex designees and five existing SuperGen directors, including our Chief Executive Officer. The Astex designees will be designated pursuant to the terms of the Implementation Agreement, and are currently expected to be Harren Jhoti, Peter Fellner, Ismail Kola and Timothy Haines. Appointment of each of the Astex designees to our board of directors and their respective committee assignments is subject to review and approval by SuperGen's Nominating and Governance Committee.

        We currently anticipate that the composition of the board of directors following the closing of the Transaction will be as set forth below:

---

(1)

Member of the Audit Committee

(2)

Member of the Compensation Committee

(3)

Member of the Governance and Nominating Committee

         James S.J. Manuso, Ph.D., has served as SuperGen's President and CEO since January 1, 2004, as our chief executive officer-elect from September 2003 to December 2003 and as a director since February 2001. Dr. Manuso is co-founder and immediate past president and chief executive officer of Galenica Pharmaceuticals, Inc. Dr. Manuso co-founded and was general partner of PrimeTech Partners, a biotechnology venture management partnership, from 1998 to 2002, and co-founder and managing general partner of The Channel Group LLC, an international life sciences corporate advisory firm. He was also president of Manuso, Alexander & Associates, Inc., management consultants and financial advisors to pharmaceutical and biotechnology companies. Dr. Manuso was a vice president and director of Health Care Planning and Development for The Equitable Companies (now Group Axa), where he also served as acting medical director. He currently serves on the boards of Novelos Therapeutics, Inc. (NVLT:OB) and privately-held KineMed, Inc. Previously, he served on the boards of Merrion Pharmaceuticals Ltd. (MERR:IEX; Dublin, Ireland), Inflazyme Pharmaceuticals, Inc., Symbiontics, Inc., Quark Biotech, Inc., Galenica Pharmaceuticals, Inc., and Supratek Pharma, Inc. Dr. Manuso earned a B.A. with Honors in Economics and Chemistry from New York University, a Ph.D. in Experimental Psychophysiology from the Graduate Faculty of The New School University, a Certificate in Health Systems Management from Harvard Business School, and an Executive M.B.A. from Columbia Business School. Dr. Manuso is the author of over 30 chapters, articles and books on topics including

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health care cost containment and biotechnology company management. He has taught and lectured at Columbia, New York University, Georgetown, Polytechnic University, and Waseda University (Japan). He has delivered invited addresses at meetings of the American Management Association, the American Medical Association, the Securities Industry Association, the Biotechnology Industry Organization, and many other professional associations. Dr. Manuso previously served as vice president and a member of the Board of Trustees of the Greater San Francisco Bay Area Leukemia & Lymphoma Society.

         Harren Jhoti co-founded Astex in 1999 and was Chief Scientific Officer until November 2007 when he was appointed Chief Executive. Dr. Jhoti was recently named by the Royal Society of Chemistry as 'Chemistry World Entrepreneur of the Year' for 2007. He has published widely including in leading journals such as Nature and Science and has also featured in TIME magazine after being named by the World Economic Forum a Technology Pioneer in 2005. Dr. Jhoti was also a non-executive director of Iconix Inc. Before setting up Astex in 1999, he was Head of Structural Biology and Bioinformatics at GlaxoWellcome in the U.K. (1991-1999). Prior to Glaxo, Dr. Jhoti was a post-doctoral scientist at Oxford University and received his BSc (Hons) in Biochemistry in 1985, and PhD in Protein Crystallography from the University of London in 1989.

         Charles J. Casamento has served as a director of SuperGen since September 2002. Mr. Casamento is currently Executive Director and Principal of The Sage Group, a healthcare advisory group specializing in Transactions, acquisitions, and partnerships between biotechnology companies and pharmaceutical companies. Mr. Casamento was the president and CEO of Osteologix, Inc., a public biopharmaceutical company developing products for treating osteoporosis, from 2004 through 2007. From 1999 through 2004, he served as chairman of the board, president and CEO of Questcor Pharmaceuticals, Inc. Mr. Casamento formerly served as RiboGene, Inc.'s president, CEO and chairman of the board from 1993 through 1999 until it merged with Cypros to form Questcor. He was co-founder, president and CEO of Interneuron Pharmaceuticals, Inc., a biopharmaceutical company, from 1989 until 1993. Mr. Casamento has also held senior management positions at Genzyme Corporation, where he was senior vice president, pharmaceuticals and biochemicals; American Hospital Supply, where he was vice president of business development and strategic planning for the Critical Care Division; Johnson & Johnson, Hoffmann-LaRoche, Inc. and Sandoz Inc. Mr. Casamento also serves on the boards of directors of CORTEX Pharmaceuticals and VIVUS, Inc. He holds a bachelor's degree in Pharmacy from Fordham University and an M.B.A. from Iona College and is a licensed pharmacist in the states of New York and New Jersey.

         Peter Fellner was appointed as Chairman of Astex in 2002. He is also Executive Chairman of Vernalis, a non-executive director of two European biotechnology companies, UCB SA and Evotec AG, and a non-executive director of QinetiQ Holdings plc, one of Europe's largest technology-based companies, and of Bespak. He is also a member of the Medical Research Council. Mr. Fellner was previously Chairman of Celltech Group plc, one of Europe's largest biotechnology companies until its acquisition in 2004, having served as its CEO from 1990 to 2003. Before joining Celltech, Dr. Fellner served as CEO of Roche U.K., from 1986 to 1990. From 1984 to 1986 he was Director of the Roche U.K. Research Centre.

         Thomas V. Girardi has served as a director since May 2000. Mr. Girardi is senior partner of Girardi & Keese, a law firm specializing in major business litigation, where he has worked since 1964. Mr. Girardi has served as national president and Los Angeles chapter president of the American Board of Trial Advocates, has also served as president of the International Academy of Trial Lawyers, an organization limited to 500 trial lawyers in America, from 2005 to 2006 and is a member of the Inner Circle of Advocates, American Board of Professional Liability Lawyers, International Society of Barristers, and American Trial Lawyers Association. Mr. Girardi is also a member of the board of directors of Boyd Gaming, Inc. He received his B.S. from Loyola Marymount University, his J.D. from Loyola Law School and an L.L.M. from New York University.

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         Allan R. Goldberg, Ph.D.  has served as a director of SuperGen since March 2005. Dr. Goldberg is a co-founder and currently serves as a managing partner of The Channel Group LLC (TCG), a global life sciences venture management and strategic advisory organization with expertise in business, financial, and commercial development. Prior to his affiliation with TCG, Dr. Goldberg co-founded PrimeTech Partners, a venture management partnership whose purpose was to create, finance and develop biomedical companies. From 1989 to 1997, Dr. Goldberg held various senior management positions including chief scientific officer, chairman and chief executive officer at Innovir Laboratories, Inc., a NASDAQ-listed biotechnology company he co-founded. He currently is a director and co-founder of ZyStor Therapeutics, Inc., a Milwaukee-based biotechnology company. In addition, he also is on the board of directors of LCT BioPharma Inc., the U.S. subsidiary of Living Cell Technologies Limited (ASX:LCT), and of Lesanne Life Sciences, LLC. Prior to Innovir, Dr. Goldberg was a professor of virology and a Richard King Mellon Foundation Fellow at The Rockefeller University from 1971 to 1989. Dr. Goldberg has served as a consultant to several large pharmaceutical companies as well as numerous private and public academic institutions. He earned a B.A. in English and Mathematics from Cornell University and a Ph.D. in Biochemistry/Biology from Princeton University, and was a postdoctoral fellow at Albert Einstein College of Medicine.

         Timothy Haines has been a partner at Abingworth Management Limited, a life science and healthcare private investment firm, since 2005. Prior to this, Mr. Haines was Chief Executive of Astex. Mr. Haines was with Astex for more than five years. Previously, he was Chief Executive of two divisions of the publicly-listed medical technology company, Datascope Corp. Prior to Datascope, he held a number of other senior management positions in the U.S. and Europe. Current and past board positions include Astex Therapeutics, Fovea, IMI, KSpine, PowderMed, Stanmore Implants and XCounter. Mr. Haines has a BSc from Exeter University and an MBA from INSEAD. He is a former Director of the Biotechnology Industry Association and currently sits on the Venture Committee of the BVCA.

         Ismail Kola is Executive Vice President and President, New Medicines at UCB S.A. Dr. Kola joined UCB from Schering Plough Corporation where he was Senior Vice President, Discovery Research and Early Clinical Research & Experimental Medicine at Schering-Plough Research Institute and Chief Scientific Officer, Schering Plough Corporation. Prior to Schering-Plough, Dr. Kola held senior positions at Merck, as Senior Vice President and Site Head, Basic Research and at Pharmacia Corporation where he was Vice President, Research and Global Head, Genomics Science and Biotechnology with Pharmacia Corporation, and served as a consultant to SmithKline Beecham Pharmaceuticals and as a member of their Genomics Advisory Board. Dr. Kola holds Adjunct Professorships of Medicine at Washington University and at Monash University Medical School; a Foreign Adjunct Professorship at The Karolinska Institute; and is a William Pitt Fellow at Pembroke College, Cambridge University, U.K. Dr. Kola has a Ph.D. in Medicine from the University of Cape Town, South Africa.

         Walter J. Lack has served as a director of SuperGen since February 2000. Mr. Lack is managing partner of Engstrom, Lipscomb & Lack, a Los Angeles, California law firm that he founded in 1974. Mr. Lack has acted as a special arbitrator for the Superior Court of the State of California since 1976 and for the American Arbitration Association since 1979. He is a member of the International Academy of Trial Lawyers and an Advocate of the American Board of Trial Advocates. He received his B.A. from Loyola Marymount University where he is a long standing member of the Board of Regents. He received his J.D. from Loyola Law School in Los Angeles.

Executive Management

        SuperGen and Astex have agreed that, upon the closing of the Transaction, Dr. Manuso would remain Chief Executive Officer, Mr. Molkentin would remain Chief Financial Officer, and Dr. Azab would remain Chief Medical Officer. Dr. Jhoti, currently the Chief Executive Officer of Astex, would

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become President and Martin Buckland, currently the Chief Business Officer of Astex, would become Chief Business Officer of the combined entity after closing of the Transaction. Other members of the SuperGen management team are expected to remain with SuperGen following the closing of the Transaction. The biographical information about each member of the SuperGen management team is set forth in Item 1 of our Form 10-K filed on March 9, 2011. Information about their employment agreements and any agreements pursuant to which compensation may be payable to any of them upon a change in control of SuperGen is set forth in "Executive Compensation" beginning on page     •    . The other members of the SuperGen management team from Astex would be named following the closing.

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INFORMATION ABOUT ASTEX

Description of Astex

        Astex is using an innovative, fragment-chemistry based drug discovery platform, Pyramid, to identify and develop new medicines, primarily for the treatment of cancer and infectious diseases. Astex has established a clinical stage pipeline of novel oncology drug candidates, including seven proprietary and partnered products, three of which are in or about to enter Phase II clinical trials, two partnered products in Phase I clinical trials, and a further two products being prepared for the start of clinical trials.

        Pyramid defines a process by which a range of high throughput biophysical and computational techniques are used to experimentally characterize the interactions of very low molecular weight compounds (fragments) with their target proteins. Although there are many advantages of a fragment-based approach to drug discovery, there are significant technical challenges to overcome before the approach can be used effectively. The fundamental challenge is one of detection. Because fragments are so small, they will have fewer interactions with target proteins than larger, more complex compounds. This means they will bind to their targets with very low affinity. Conventional screening systems based on bioassays are designed to detect binding that occurs at higher affinities than is typically observed with fragments. As such, fragments cannot be detected using conventional screening methods. Accordingly, a fundamental challenge in establishing a fragment-based drug discovery capability is the development of efficient screening systems that can detect the binding of fragments. Astex's Pyramid drug discovery platform addresses limitations in conventional high throughput screening and other forms of fragment-based screening by combining high throughput X-ray crystallography, NMR spectroscopy, calorimetry and other biophysical methods with advanced computational techniques and structure-based design to enable Astex's chemists to design, synthesize and test novel fragment-derived drug molecules in a seamlessly integrated process.

        The productivity of Pyramid has allowed Astex to generate a robust pipeline including novel "first-in-class" drug compounds and potential "best-in-class" drug candidates which the company is advancing independently and through valuable strategic partnerships with industry leaders such as AstraZeneca, GlaxoSmithKline, Janssen Pharmaceutica (a Johnson & Johnson company) and Novartis.

Management's Discussion and Analysis of Financial Condition and Results of Operations of Astex

Overview

        Astex is a biotechnology company that has established its integrated, fragment chemistry-based drug discovery approach called Pyramid, an industry-leading platform that delivers tailored, high-quality small molecule drug leads with enhanced therapeutic potential.

        The productivity of Pyramid has allowed Astex to generate a robust pipeline including novel "first-in-class" drug compounds and potential "best-in-class" drug candidates which Astex is advancing independently and through strategic partnerships with industry leaders such as GlaxoSmithKline (GSK), Janssen Pharmaceutica (a Johnson & Johnson company), Novartis and AstraZeneca.

Proprietary Pipeline

         AT7519 is a small molecule targeted inhibitor of several cyclin-dependent kinases that regulate two important disease processes: the cell replication cycle and gene expression. A Phase II study of AT7519 in combination with bortezomib in patients with multiple myeloma has commenced at multiple centers in the US with funding support from the Multiple Myeloma Research Foundation. In addition, two Phase II trials of AT7519 to treat patients with chronic lymphocytic leukaemia and mantle cell lymphoma are planned and will be sponsored by the National Cancer Institute of Canada (NCIC)

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Clinical Trials Group in Canada. Novartis has an option to license worldwide development and commercialization rights to AT7519 under our December 2005 collaboration and license agreement.

         AT9283 is a small molecule inhibitor of kinases including aurora A and B, and JAK2. Initial clinical trials have demonstrated early signals of efficacy in patients with haematological malignancies. AT9283 is being investigated in a Phase II clinical trial in a chemotherapy refractory, multiple myeloma patient population in a trial being sponsored by the NCIC Clinical Trials Group in Canada and in a Phase I trial in paediatric patients with advanced solid tumours under the sponsorship of Cancer Research U.K. An additional paediatric leukaemia trial being sponsored by Cancer Research U.K. is due to begin during 2011. Astex retains all commercial rights in this compound.

         AT13387 is a small molecule inhibitor of Hsp90, a so called "heat shock" protein believed to be responsible for supporting many tumour cells becoming cancerous. Hsp90 acts as a "molecular chaperone" stabilising and preventing the breakdown of key cancer forming (oncogenic) proteins. AT13387 is currently completing a Phase I study designed to assess the safety and tolerability of the drug in patients with advanced refractory tumours. This study, which is investigating two different dosing schedules, is being conducted at multiple clinical sites in the U.S. The study is also intended to provide early evidence of clinical efficacy. Based upon the initial results of this Phase I study, Astex has initiated a Phase II study in patients with refractory gastro-intestinal stromal tumours.

        In November 2009, we entered into a Cooperative Research and Development Award with the US National Cancer Institute (NCI) to support the further clinical development of AT13387 over the next 5 years with a number of single agent and combination Phase I/II and Phase II studies planned. Astex retains all commercial rights in this compound.

         AT13148 is an orally active multi-targeted small molecule inhibitor of Protein Kinase B, or PKB, PKB/Akt, a key enzyme in an important tumour cell survival pathway. More than 50 per cent of all tumours have an abnormality in this pathway.

        In September 2008 Astex announced a partnership with Cancer Research U.K. and Cancer Research Technology Limited to take AT13148 into development under the organization's Clinical Development Partnerships program. Under the terms of this agreement, Cancer Research U.K.'s Drug Development Office will carry out further development work on the agent, some of which will be undertaken by The Institute of Cancer Research (ICR) and, if successful, AT13148 will be taken into Phase I clinical trials. Astex retains all commercial rights in the compound.

Internal Discovery Programs

        HCV NS3 Inhibitors —Astex has a project focused on the discovery of small molecule inhibitors of hepatitis C virus (HCV) NS3—a key protein involved in viral replication. The compounds act as allosteric modulators of the NS3 protein resulting in inhibition of the enzyme activities of both protease and helicase in wild type and in drug resistant variants of HCV that have arisen in the clinic during treatment with active site inhibitors. As such, the compounds offer the potential to be differentiated from existing HCV protease inhibitors. Astex retains all commercial rights to the resulting drug candidates from this program. The project is currently in the lead optimization stage.

        IAP Inhibitors —Astex has a project focused on identifying and developing novel, small molecule, non-peptidomimetic modulators of inhibitors of apoptosis proteins (IAP) for development as anti-cancer agents. Astex has identified two chemically distinct lead series, with a range of selectivity profiles. Current optimization has now identified examples of selective and pan-selective agents that are active in vivo and which Astex believes have potential both in a combination setting and for use as a single agent. Astex retains all commercial rights to the resulting drug candidates from this program. The project is currently in the lead optimization phase.

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Partnered Pipeline

         LEE011 is a selective inhibitor of the key cell cycle enzymes cyclin-dependent kinase 4 and cyclin-dependent kinase 6, and derives from the collaboration and licence agreement with Novartis announced in December 2005, aimed at developing novel cancer therapies targeting the cell cycle. LEE011 entered Phase I human clinical trials in January 2011. Novartis has worldwide development and commercialization rights to this compound.

         AZD5363 is an orally bioavailable PKB/Akt inhibitor, and derives from the collaboration and licence agreement with AstraZeneca announced in July 2005, aimed at developing novel cancer therapies targeting a key tumour cell survival pathway. AZD5363 entered Phase I human clinical trials in April 2011. AstraZeneca has worldwide development and commercialization rights to this compound.

        AZDyyyy.     In October 2010 we announced that AstraZeneca had selected a candidate drug from the collaboration and licence agreement announced in March 2003 aimed at identifying novel, small molecule inhibitors of beta-secretase—a key enzyme implicated in the progression of Alzheimer's disease. Inhibitors to block the action of this enzyme could prevent the build-up of beta-amyloid which may help slow the progression of, or stop, the disease. AstraZeneca has worldwide development and commercialization rights to this compound.

        FGFR Inhibitors —In June 2008, Astex entered into a collaboration and licence agreement with Janssen which granted them a worldwide exclusive license to develop and commercialize compounds arising from Astex's novel FGFR inhibitor program, and the parties also established a new drug discovery alliance focused on the identification of novel inhibitors against two additional cancer drug targets. Astex continues to conduct research work under the collaboration.

Collaboration and License Agreements

        In November 2009 Astex entered into a multi-target collaboration and licence agreement with GSK. Pursuant to the terms of the agreement, Astex will apply its fragment-based drug discovery platform, Pyramid, to multiple targets identified by GSK, with the objective of identifying and developing new candidate drugs. The targets have been selected from multiple therapeutic areas within GSK. In connection with the agreement, Astex received a £12.5 million upfront payment and in addition, GSK purchased £7.5 million of our Preferred C shares at a price of £4.82 per share. GSK is obligated to make certain payments to Astex if and when the projects reach defined research, development and regulatory milestones. The agreement further provides that, if the compounds derived from the joint research program become commercial products, GSK will pay Astex tiered royalties on annual net sales of such products. The royalties will be paid on a country-by-country and product-by-product basis. Total potential research, development and regulatory milestones payable to Astex could exceed £300 million.

        In June 2008 Astex entered into a collaboration and licence agreement focused on the research, development and commercialization of novel drugs for the treatment of cancer with Janssen. The agreement grants Janssen a worldwide exclusive license to develop and commercialize compounds arising from our novel FGFR inhibitor program, and Astex also established a new drug discovery alliance focused on the identification of novel inhibitors against two additional cancer drug targets. The collaborative program with Janssen on FGFR inhibitors is currently in preclinical development. In connection with the transaction, Astex received a £5 million upfront payment and in addition, Johnson and Johnson Development Corporation, or JJDC, purchased £7.5 million of our Preferred C shares at a price of £4.82 per share. Janssen has paid for a defined number of our employees working on the projects on the basis of full time equivalents (FTEs). Reimbursements for FTEs are included in deferred revenue and recognized as the services are rendered. The agreement provides for Janssen to select compounds for further development and commercialization at the end of the research phase. Janssen is obligated to make certain payments to Astex if and when the projects reach defined

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discovery, development and regulatory milestones. The agreement further provides that, if the compounds derived from the joint research program become commercial products, Janssen will pay Astex tiered royalties on sales of FGFR inhibitors and additional royalties on new products developed under the other research programs. The royalties will be paid on a country-by-country and product-by-product basis. Total potential research payments, development and regulatory milestones payable to Astex could exceed £270 million.

        Astex has completed the research phase of a collaboration and licence agreement with Novartis signed in December 2005 which is focussed on the research, development and commercialization of novel cell cycle control drugs for the treatment of cancer and other human diseases. Further activities continue at Novartis under this agreement with the clinical candidate LEE011 entering human clinical trials in January 2011. In addition, Novartis has an option to purchase a worldwide license to develop and commercialize our compound AT7519, currently in Phase II clinical development. In connection with the agreement Astex received a $10 million upfront payment and in addition Novartis purchased £8.7 million of our Preferred C shares at a price of £4.82 per share in April 2007. Novartis is obligated to make certain payments to Astex if and when the projects reach defined development and regulatory milestones. The agreement further provides that, if the compounds derived from the joint research program become products, Novartis will pay Astex royalties on annual net sales of such products. The royalties will be paid on a country-by-country and product-by-product basis. Total potential research payments, development and regulatory milestones payable to Astex could exceed £180 million.

        Astex has completed the research phase of a collaboration and license agreement signed in July 2005 with AstraZeneca relating to the discovery of novel drugs against PKB. Further activities continue at AstraZeneca under this agreement with the clinical candidate AZ5363 entering human clinical trials in early 2011. In connection with the AstraZeneca agreement Astex received a £2.75 million upfront payment. AstraZeneca is obliged to make certain payments to Astex if and when the projects reach defined development and regulatory milestones. The agreement further provides that, if the compounds derived from the joint research program become commercial products, AstraZeneca will pay Astex sales milestone payments as well as royalties on annual net sales of such products. The royalties will be paid on a country-by-country and product-by-product basis. In addition, Astex may receive tiered royalties payable on net sales of resulting products. Total potential research, development and sales milestones payable to Astex could exceed £150 million.

        Astex has completed the research phase of a collaboration and licence agreement signed in February 2003 with AstraZeneca relating to the discovery of novel drugs against a key protein target, beta-secretase implicated in the onset of Alzheimer's disease. Further activities continue at AstraZeneca under this agreement with the selection of a clinical candidate by AstraZeneca announced in October 2010. In connection with the 2003 agreement, AstraZeneca is obligated to make certain payments to Astex if and when the projects reach defined development and regulatory milestones. The agreement further provides that, if the compounds derived from the joint research program become products, AstraZeneca will pay Astex sales milestone payments as well as royalties on annual net sales of such products. The royalties will be paid on a country-by-country and product-by-product basis. Total potential research, development and sales milestones payable to Astex could exceed $40 million.

        All of Astex's current products are in the discovery, pre-clinical or clinical trial stage, and will require substantial additional investments in research and development, clinical trials, regulatory and sales and marketing activities to commercialize these product candidates. Conducting clinical trials is a lengthy, time-consuming and expensive process involving inherent uncertainties and risks, and our studies may be insufficient to demonstrate safety and efficacy to support Food and Drug Administration (FDA), or other regulatory body approval of any of our product candidates. Products being developed as part of the partnered pipeline do not require our funding; all such development, regulatory and commercialization expenses are borne by the partner. However, Astex has no control

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over the progress of such activities conducted by Astex's partners, and consequently, over their outcome.

Historical Losses from Operations

        As a result of our substantial research and development expenditures and lower collaboration revenues, Astex has incurred cumulative losses of £71.0 million through December 31, 2010 and has not consistently generated sufficient funds through operations to support its business. Astex expects to continue to incur losses over the next several years and may never achieve sustained profitability.

        Ultimately, Astex's ability to sustain profitability will depend upon a variety of factors, including regulatory approvals of its products, the timing of the introduction and market acceptance of its products and competing products, the success of joint development programs with GSK, Janssen, Novartis and AstraZeneca, the launch of new products, and Astex's ability to control our ongoing costs and operating expenses. If Astex's drug discovery and research efforts are not successful, or if the results from our clinical trials are not positive, Astex may not be able to get sufficient funding to continue trials or conduct new trials, and Astex would be forced to scale down or cease business operations. Moreover, if Astex's products are not approved or commercially accepted, Astex will remain unprofitable for longer than currently anticipated. Additionally, Astex may be forced to substantially scale down operations or sell certain assets.

Critical Accounting Policies

        Astex's management discussion and analysis of its financial condition and results of operations is based upon Astex's financial statements, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (IASB). The preparation of these financial statements requires Astex to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and reported disclosures. On an on-going basis, Astex evaluates its estimates, including those related to revenue recognition and stock-based compensation. Astex bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

        Astex's significant accounting policies are more fully disclosed in Note 4 to its financial statements. However, some of Astex's accounting policies are particularly important to the portrayal of its financial position and results of operations and require the application of significant judgment by management. Astex believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its financial statements.

Revenue recognition

        Revenue principally consists of income received in the normal course of business from license fees, technical milestones, clinical and developmental milestones, upfront payments, and fees for research and development services. These are stated net of trade discounts, value added tax and other sales related taxes. A description of the various elements of revenue and their accounting policies are as follows:

        License fees:     License fees are deferred and recognized over the period of the license term or the period of the associated research and development agreement (where relevant). In circumstances where no such defined period exists, the license fee is recognized immediately.

        Technical milestones:     During certain research and development programs, Astex receives non-refundable milestone payments when it achieves certain defined technical criteria. Such milestone

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payments are only recognized on completion of the relevant technical milestone and formal agreement of completion by the corporate collaboration partner.

        Clinical and developmental milestones:     Astex receives non-refundable clinical and development milestone payments when a licensee or the corporate partner achieves key stages in development. Such payments are only recognized as revenue on completion of the relevant milestone and formal agreement of completion by the licensee or corporate partner.

        Upfront payments:     Upfront payments are recognized over the contract term as services are being perfomed.

        Research and development services:     Astex provides research and development services to certain corporate collaborators, usually in the form of a defined number of its employees working with the collaborator to further the collaborator's research and development effort. Such contracts are made on the basis of FTE's, and are charged at a specified rate per FTE. Revenues from FTE services are recognized as the services are rendered. Revenue also includes reimbursement of third party costs incurred in the provision of research and development services.

Share-Based Compensation

        Astex uses the fair value method of accounting for share-based payment transactions in which it receives employee services in exchange for our equity instruments (Options). Astex estimates share-based compensation for Options at the grant date based on each Option's fair value as calculated by the Black-Scholes-Merton option-pricing model, or the BSM model.

        Option valuation.     The fair value of each Option is estimated on the date of grant using the BSM model. The BSM model requires the use of highly subjective and complex assumptions to determine the fair value of share-based awards, including the expected term of the grant, the expected volatility, the risk-free interest rate and the expected dividends. The BSM model also requires the fair value of the underlying ordinary shares. These inputs are subjective and generally require significant judgment. The expected life of Astex's share options is based on management's judgment as to the period of time the share options are expected to be outstanding. Astex's expected volatility is determined using a range of comparable public companies volatility. Astex's risk-free interest rate is the Bank of England Base Rate in effect at the time of the grant with remaining term equivalent to the expected term of the grants. Astex's expected dividends are estimated to be zero since Astex has not historically paid any cash dividends on outstanding share capital and does not presently plan to pay cash dividends in the foreseeable future.

        Astex is using the accelerated attribution method to recognise stock-based compensation expense. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. Ultimately, the actual expense recognized over the vesting period will only be for those shares that vest.

Results of Operations

        Revenues include ratable recognition of upfront payments and performance milestone payments received in connection with our collaboration and license agreements and reimbursed research and development expenses. The amount of revenue depends, in part, upon the estimated recognition period of the upfront payments, the achievement of future milestones, the continuation of existing collaborations, the amount of reimbursed research and development work, and the signing of new

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collaborations. Astex's development and license revenue relates to collaboration and licence agreements entered into with various collaborators as follows (in thousands):

        Astex entered into a collaboration and license agreement with GSK in November 2009. Under this agreement, Astex received an upfront payment of £12.5 million that is being recognized over the expected performance period of 48 months as Astex's services are being performed. Astex also receives non-refundable milestone payments when Astex achieves certain defined technical criteria. Such milestone payments are only recognized on completion of the relevant technical milestone and formal agreement of completion by GSK. Revenues under this agreement included milestone payments of £3.1 million during the year ended December 31, 2010.

        Astex entered into a collaboration and license agreement with Janssen in June 2008. In connection with this agreement, Astex received an upfront payment of £5 million that was recognized straight-line over the initial expected performance period of 24 months. In the agreement with Janssen Astex provides research and development services in the form of a defined number of employees working with Janssen to further the collaborator's research and development effort. Payments under the contract are made on the basis of FTE employees which are charged at a specified rate per FTE. Payments in advance for FTE services to be performed are included in deferred revenue and recognized as the services are rendered. Under the agreement with Janssen, Astex receives non-refundable milestone payments when Astex achieves certain defined technical criteria. Such milestone payments are only recognized on completion of the relevant technical milestone and formal agreement of completion by Janssen. Revenues under this agreement included milestone payments of £1.1 million, nil and £0.8 million during the years ended December 31, 2010, 2009 and 2008, respectively.

        Astex entered into two collaboration and license agreements with AstraZeneca in which the research phase of the agreements had been completed by the end of 2006. Astex receives non-refundable clinical and development milestone payments when AstraZeneca achieves key stages in their development. Such payments are only recognized as revenue on completion of the relevant milestone and formal agreement of completion by AstraZeneca.

        Astex entered into a collaboration and license agreement with Novartis and received an upfront payment of $10 million in 2005. The upfront payment was fully recognized by 2008 upon completion of the research phase of the agreement. Astex receives non-refundable clinical and development milestone payments when Novartis achieves key stages in development. Such payments are only recognized as revenue on completion of the relevant milestone and formal agreement of completion by Novartis.

Operating Expenses

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