DURATA THERAPEUTICS, INC. (DRTX) IPO

We estimate that the net proceeds from our issuance and sale of 7,500,000 
shares of our common stock in this offering will be approximately $62.3 
million, after deducting underwriting discounts and commissions and estimated 
offering expenses payable by us. If the underwriters exercise their option to 
purchase additional shares in full, we estimate that the net proceeds from this
offering will be approximately $71.8 million. 

As of March 31, 2012, we had cash and cash equivalents of approximately $25.3 
million. We currently estimate that we will use the net proceeds from this
offering, together with our cash and cash equivalents, as follows: 

   •   approximately $13 million to complete the clinical development of and 
       seek marketing approval in the United States and the European Union for 
       dalbavancin for the treatment of patients with abSSSI; 

   •   approximately $20 million to fund commercial activities for dalbavancin 
       in the United States and Western Europe, if it is approved for the 
       treatment of patients with abSSSI; 

   •   approximately $15 million to fund the scale up of the manufacturing of 
       dalbavancin in preparation for commercial launch; 

   •   approximately $10 million to pursue the development of dalbavancin in 
       additional indications; and 

   •   the remainder for working capital and other general corporate purposes, 
       which may include the in-licensing or acquisition of other products or 
       technologies. 
 
This expected use of the net proceeds from this offering and our existing cash 
and cash equivalents represents our intentions based upon our current plans and
business conditions. The amounts and timing of our actual expenditures may vary
significantly depending on numerous factors, including the progress of our 
development and commercialization efforts, the status of and results from 
clinical trials, as well as any collaborations that we may enter into with 
third parties for our product candidates, and any unforeseen cash needs. As a 
result, our management will retain broad discretion over the allocation of the 
net proceeds from this offering. We have no current understandings, agreements 
or commitments for any material acquisitions or licenses of any products, 
businesses or technologies. 

Based on our planned use of the net proceeds from this offering and our 
existing cash and cash equivalents, we estimate that such funds will be 
sufficient to enable us to complete the clinical development of, to seek 
marketing approval in the United States and the European Union for, and, if 
approved for the treatment of patients with abSSSI, to commercially launch 
dalbavancin in the United States and Western Europe. We have based this 
estimate on assumptions that may prove to be wrong, and we could use our 
available capital resources sooner than we currently expect. This estimate 
assumes, among other things, that, at our sole discretion pursuant to the terms
of our agreement with Pfizer, we elect to defer for a period of up to five 
years payment of the $25 million milestone that we will become obligated to pay
upon the first commercial sale of dalbavancin by delivering to Pfizer a 
promissory note for such amount. Interest on the outstanding principal amount 
of the promissory note will accrue at a rate of 10% per annum, compounded 
annually. 

Pending our use of the net proceeds from this offering, we intend to invest 
the net proceeds in a variety of capital preservation investments, including 
short-term, investment-grade, interest-bearing instruments and U.S. government 
securities.

The biotechnology and pharmaceutical industries are characterized by rapidly 
advancing technologies, intense competition and a strong emphasis on 
proprietary products. While we believe that our clinical experience and 
scientific knowledge provide us with competitive advantages, we face potential 
competition from many different sources, including major pharmaceutical, 
specialty pharmaceutical and biotechnology companies, academic institutions and
governmental agencies and public and private research institutions. Any product
candidates that we successfully develop and commercialize will compete with 
existing therapies and new therapies that may become available in the future. 

Many of our competitors have significantly greater financial resources and 
expertise in research and development, manufacturing, preclinical testing, 
conducting clinical trials, obtaining regulatory approvals and marketing 
approved products than we do. Mergers and acquisitions in the pharmaceutical, 
biotechnology and diagnostic industries may result in even more resources being
concentrated among a smaller number of our competitors. These competitors also 
compete with us in recruiting and retaining qualified scientific and management
personnel and establishing clinical trial sites and patient registration for 
clinical trials, as well as in acquiring technologies complementary to, or 
necessary for, our programs. Smaller or early stage companies may also prove to
be significant competitors, particularly through collaborative arrangements 
with large and established companies. 

The key competitive factors affecting the success of dalbavancin, if approved, 
are likely to be its efficacy, safety, convenience, price, use in out-patient 
settings, the level of generic competition and the availability of 
reimbursement from government and other third party payors. 

Our commercial opportunity could be reduced or eliminated if our competitors 
develop and commercialize products that are safer, more effective, have fewer 
or less severe side effects, are more convenient or are less expensive than any
products that we may develop. Our competitors also may obtain FDA or other 
regulatory approval for their products more rapidly than we may obtain approval
for ours. In addition, our ability to compete may be affected because in many 
cases insurers or other third party payors seek to encourage the use of generic
products. Our industry is highly competitive and is currently dominated by 
generic vancomycin, which generated sales of approximately $189 million in the 
United States in 2011 and represented a majority of courses prescribed. 
Additional products are expected to become available on a generic basis over 
the coming years. If dalbavancin is approved, we expect that it will be priced 
at a significant premium over competitive generic products. 

Our potential competitors include large pharmaceutical and biotechnology 
companies, and specialty pharmaceutical and generic drug companies, including 
Pfizer, which markets Zyvox (linezolid) and Tygacil (tigecycline), Cubist 
Pharmaceuticals, Inc., which markets Cubicin (daptomycin), Theravance, Inc., 
which markets Vibativ (telavancin), Forest Laboratories, Inc., which markets 
Teflaro (ceftaroline), Sanofi-Aventis Ltd., which markets Targocid 
(teicoplanin), and various producers of generic vancomycin. Further, we expect 
that product candidates currently in late stage development, or that could 
enter late stage clinical development in the near future, may represent 
significant competition if approved. These include oritavancin (under 
development by The Medicines Company for administration in a single dose with a
three-hour infusion time), tedizolid phosphate (under development by Trius 
Therapeutics, Inc.), fusidic acid (under development by Cempra, Inc.), 
delafloxin (under development by Rib-X Pharmaceuticals, Inc.), PTK 0796 (under 
development by Paratek Pharmaceuticals, Inc.), BC-3781 (under development by 
Nabriva Therapeutics AG), TP-434 (under development by Tetraphase 
Pharmaceuticals, Inc.) and JNJ-Q2 (under development by Furiex Pharmaceuticals,
Inc.). Many of these companies may have significantly greater resources than we
have. If approved, we believe that dalbavancin’s features, including its 
convenient dosing, compliance and efficacy with respect to MRSA, will 
differentiate it from existing products currently marketed for the treatment 
of abSSSI.